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klio [65]
3 years ago
9

​(Related to Checkpoint​ 5.2) ​(Future value) ​(Simple and compound​ interest) If you deposit ​$1 comma 000 today into an accoun

t earning an annual rate of return of 8 ​percent, in the third year how much interest would be​ earned? How much of the total is simple interest and how much results from compounding of​ interest?
Business
1 answer:
Anna35 [415]3 years ago
6 0

Part A

Answer and its explanation:

Interest earned in the third year can be found from following two steps

Step 1 Use compounding formula for first two years, which is as under:

Future value = Present Value * (1+r)^n

Here n is the number of years the amount would be deposited for, which is 2 years duration. And r is the rate of return which is 8% here. So the future value in the year 2 will be:

Future value = $1000 * (1 + 0.08)^2 = $1166.4

Now the interest earned in the third year is:

Interest earned in the third year = $1166.4 * 8% = $93.312

Part B

Answer and its explanation:

The simple interest is the interest arising from the principal investment made in the year zero to date and this can be calculated as under:

Simple interest = Principal investment * rate of interest * number of years

Simple Interest = $1000 * 8% * 3years = $240

And the interest arising from the compounding of interest can be found by the difference of the Future value of the investment for three years and simple interest.

So,

Interest arising through compounding of interest = FV of investment in three years time - (Simple Interest + Principal investment)

Interest arising through compounding of interest = $1000*(1+0.08)^3 -$1240

= $19.712

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Ice Cream Corporation uses the weighted-average method in its process costing system. Data concerning the first processing depar
Svetllana [295]

Answer:

Ice Cream Corporation

The cost per equivalent unit for materials for the month in the first processing department is closest to: __________

=  $17.97.

Explanation:

a) Data and Calculations:

                                                                Units    Materials   Conversion

Beginning work in process inventory     900     $13,000        $5,100

Degree of completion                                               75%              20%

 Units started into production              9,600

Total units in production                    10,500

Units completed and transferred       8,500         100%            100%

Ending work in process inventory     2,000           90%              30%

                                                                Units    Materials   Conversion

Beginning work in process inventory     900     $13,000         $5,100

Costs added during the month                         $172,100      $242,100

Total production costs for the month               $185,100    $247,200

Equivalent units of production:

                                                             Units    Materials           Conversion

Units completed and transferred       8,500    8,500 (100%)   8,500 (100%)

Ending work in process inventory     2,000     1,800 (90%)        600 (30%)

Total equivalent units                                      10,300                9,100

Cost per equivalent unit:

                                                           Materials           Conversion

Total production costs                      $185,100           $247,200

Total equivalent units                           10,300                  9,100

Cost per equivalent unit                       $17.97                $27.16

6 0
2 years ago
Howard Schultz of Starbucks, spotted the opportunity to ___
erma4kov [3.2K]

Answer:

Import

Explanation:

importing goods and services

4 0
2 years ago
Whispering Winds Manufacturing has an annual capacity of 81,000 units per year. Currently, the company is making and selling 78,
svetoff [14.1K]

Answer:

Net loss from accepting the order  $(56,200 )

Explanation:

Note that Whispering Winds Manufacturing currently has excess capacity

Excess capacity = 81,000 - 78,200 = 2800  units

The relevant cash flows associated with this special order are as follows:

  1. The increase in contribution from meeting part of the offer from the excess capacity
  2. Opportunity cost associated with meeting the part of the special order from existing sales.

Note that the special order would be met as follows

2800 from the excess capacity

<u>2600 </u> from existing sales

<u>5400</u>

                                                                                       $

<em>Total contribution from special order:</em>

(70-65) × 5400                                                              27000

<em>Contribution lost from selling 2,600</em>

<em>at a reduced price:</em>

(102-70)  × 2,600                                                       <u>  (83,200) </u>

Net loss from accepting the order                             (<u>56,200</u> )

                                             

7 0
3 years ago
You plan to invest in one of two home delivery pizza companies, High and Low, that were recently founded and are about to commen
ch4aika [34]

Answer:

$0.60

Explanation:

Computation of Firm High's EPS

Profit before Tax (PBT) = EBIT - Interest on debt

= 500,000 - (12% * (70% * 3,000,000)) (Firm High's use of debt is 70%)

= 500,000 - (12%*2,100,000)

= 248,000

Earnings = PBT - tax = 248,000 - (35% * 248,000)

= 161,200

Given 90,000 shares, the EPS = 161,200/90,000 = $1.79.

Computation of Firm Low's EPS

Profit before Tax (PBT) = EBIT - Interest on debt

= 500,000 - (10% * (20% * 3,000,000)) (Firm Low's use of debt is 20%)

= 500,000 - (10%*600,000)

= 440,000

Earnings = PBT - tax = 440,000 - (35% * 440,000)

= 286,000

Given 240,000 shares, the EPS = 286,000/240,000 = $1.19.

Therefore, EPSHigh - EPSLow = 1.79 - 1.19 = $0.60.

4 0
3 years ago
Increased interest in cultural diversity can be attributed to all of the following except __________. A. personal travel B. adva
Ksju [112]

Answer:

C. natural selection

Explanation:

The increased interest in the diversity of the culture would be attached to the personal travel, communication advances, international trade but not with the natural selection as the cultural diversity would deals in different culture but the natural selection would not be considered of this part

So the option C is correct

5 0
3 years ago
Read 2 more answers
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