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Neko [114]
3 years ago
5

"A tenant offers to sign a lease paying a rent of $1,000 per month, in advance (i.e., the rent will be paid at the beginning of

each month), for five years. At 10% nominal annual interest compounded monthly, what is the present value of this lease
Business
1 answer:
belka [17]3 years ago
3 0

Answer:

$47,500

Explanation:

Since the payment is made monthly in advance for the period of 5 years, therefore the present value of annuity formula shall be used for the purpose of calculating the Present value of lease, which is given as follow:

Present value of annuity=R+R[(1-(1+i)^-n)/i]

In the given question

R=Rent per month paid in advance=$1,000

i=interest compounded monthly=10%/12=0.83%

n=number of payments involved=(12*5)-1=59

Present value of annuity=1,000+1,000[(1-(1+0.83%)^-59)/0.83%]

                                        =$47,500

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kvasek [131]

A company had net income of $40,000, net sales of $300,000, and average total assets of $200,000. The profit margin and total asset turnover ratio are 13.3% each. 1.5.

There are two methods that can be used to calculate return on assets. The first method is to divide the company's net income by its average total assets. The second method is to multiply the company's net profit margin by sales.

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4 0
1 year ago
At the start of its fiscal year, a company anticipated producing 300,000 units throughout the year. The annual budgeted manufact
scoray [572]

Answer:

The correct answer to the following question is $36,000.

Explanation:

Given information  -

Units anticipated to be produced - 300,000 units

Variable cost - $150,000

Fixed cost - $600,000

Beginning inventory - 5000 units

Ending inventory  - 7000 units

Income under absorption costing - $40,000

Now under the absorption costing, rate of fixed overhead cost per unit -

Fixed cost / Number of units produced

= $600,000 / 300,000

= $2

In April ( under absorption costing ), the amount of fixed manufacturing overhead cost that was still embedded in ending inventory but were not expense -  

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6 0
3 years ago
You have an investment that will pay you 1.18 percent per month. a. How much will you have per dollar invested in one year? (Do
fiasKO [112]

Answer:

The correct answer for option (a) is $1.15 and for option (b) is $1.33.

Explanation:

According to the scenario, the given data are as follows:

Present value (PV) = $1

Rate of interest (R) = 1.18% per month

Time period (for option a) (t1)= 12 months

Time period ( for option b) (t2)= 24 months

So, we can calculate the future value by using following formula:

FV = PV × ( 1 + R )^t

(a). By putting value in the formula:

FV = $1 ( 1 + 0.0118)^12

= $1 × 1.1511610877

= $1.15

FV = PV × ( 1 + R )^t

(b). By putting value in the formula:

FV = $1 ( 1 + 0.0118)^24

= $1 × 1.32517184983

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This is a funny question!
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3 years ago
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