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erastovalidia [21]
3 years ago
10

Arlington Company is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures wer

e $6,400,000 on March 1, $5,280,000 on June 1, and $8,000,000 on December 31. Arlington Company borrowed $3,200,000 on January 1 on a 5-year, 12% note to help finance construction of the building. In addition, the company had outstanding all year a 10%, 3-year, $6,400,000 note payable and an 11%, 4-year, $12,000,000 note payable.
A) What is the weighted-average interest rate used for interest capitalization purposes?
B) What is the avoidable interest for Arlington Company?
C) What is the actual interest for Arlington Company?
D) What amount of interest should be charged to expense?

Business
1 answer:
AlladinOne [14]3 years ago
3 0

Answer

The answer and procedures of the exercise are attached in a microsoft excel document.  

Explanation  

Please consider the data provided by the exercise. If you have any question please write me back. All the exercises are solved in a single sheet with the formulas indications.  

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Answer:

Bart Inc.

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= $114,240.

Explanation:

a) Data and Calculations:

Date of purchase of machine from Fell Corp. = December 31, 2016

Annual payments for a non-interest-bearing note = $20,000

Appropriate present value of the annuity due = 5.712

PV of the annual payments for 8 years = $114,240 ($20,000 * 5.712)

First payment date = December 31, 2016

Period of payments = 8 years

Prevailing interest rate for this type of note = 11%

Check from an online financial calculator:

N (# of periods)  8

I/Y (Interest per year)  11

PMT (Periodic Payment)  20000

FV (Future Value)  0

Results

PV = $114,243.93

Sum of all periodic payments = $160,000.00

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Answer:

REDISTRIBUTION                      

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Redistribution of assets and income can be defined as social mechanism like taxes, education, healthcare, government services, political reform, fiscal policy, confiscation, separation or tort rule is the redistribution of wealth and income from some persons to others.

The phrase's meanings differ, based on private experiences, political philosophies and limited statistical usage. In politics, it is often said, probably referring to supposed transfers of wealth from those with more to those who have less.

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3 years ago
Accumulated Depreciation and Depreciation Expense are classified, respectively, as _____. (A) asset, contra liability (B) expens
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Answer:

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Explanation:

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brutus co. exists in a world with taxes, but otherwise, capital markets are perfect. brutus co's debt cost of capital is 6%, its
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<h3>What leverage ratio?</h3>
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5 0
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Suppose a perfectly competitive firm produces 40 units of output per-period (e.g., daily) and sells all units for the market pri
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The correct answer for the question that is being presented above is this one: "F. i and iii" Then the firm is maximizing total profit by producing and selling 40 units of output and <span>earns a per-period total profit of $240 </span>

Here are the choices:
A. i
B. ii
C. iii
D. iv
E. i and ii
F. i and iii
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3 years ago
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