Answer:
4.76%
Explanation:
The requirement in this question is determining the discount rate which gives the same present value in both cases since discount rates discount future cash flows to present value terms.
PV of a pertuity=annual cash flow/discount rate
PV of a pertuity=$17,000/r
PV of ordinary annuity=annual cash flow*(1-(1+r)^-n/r
PV of ordinary annuity=$30,000*(1-(1+r)^-18/r
$17,000/r=$30,000*(1-(1+r)^-18/r
multiply boths side by r
17000=30,000*(1-(1+r)^-18
divide both sides by 30000
17000/30000=1-(1+r)^-18
0.566666667=1-(1+r)^-18
by rearraging the equation we have the below
(1+r)^-18=1-0.566666667
(1+r)^-18=0.433333333
divide indices on both sides by -18
1+r=(0.433333333)^(1/-18)
1+r=1.047554315
r=1.047554315-1
r=4.76%
Answer:
On the job
Explanation:
Paul has experienced ‘On the job’ training; the employees can gain proficiency with the skills that are required to be performed in the real work conditions and furthermore gets familiar with the workplace. Likewise, the organisation does not have to pay extra cost of setting up a study hall arrangement for granting preparing to the workers; they acquire training on the job.
Answer and Explanation:
The amortization schedule is presented below:
Date Cash Interest expense Amortization Balance
A B C = (A - B)
January 1, Year 1 $58,998
D
End of Year 1 $3,944 $3,717 $227 $58,771
E = D - C
End of Year 2 $3,944 $3,702.573 $241 $58,530
End of Year 3 $3,944 $3,687.39 $257 $58,273
End of Year 4 $3,944 $3,671 $273 $58,000
Working notes:
For computing the missing amount first we have to find out the interest expense rate which is
= $3,717 ÷ $58,998
= 6.30%
For year 2,
The interest expense is
= $58,771 × 6.30%
= $3,702.573
For year 3,
The interest expense is
= $58,530 × 6.30%
= $3,687.39
Fixed deposit account. Savings account.
<span>The government must control the money payment.</span>
