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lawyer [7]
2 years ago
12

Knottworth Gedding Consulting leased machinery from Red Inc. on July 1, 2021. The lease was recorded as a finance lease. The pre

sent value of the lease payments discounted at 10% was $40.5 million. Ten annual lease payments of $6 million are due each July 1 beginning July 1, 2021. What amount of interest expense from the lease should Knottworth Gedding report in its December 31, 2021, income statement?
Business
1 answer:
Kobotan [32]2 years ago
6 0

Answer:

The answer is: Knottworth Gedding should report $1,725,000 as interest expense in its 12/31/2021 income statement

Explanation:

The formula for calculating the amount of interest expense is:

interest expense = discount rate x (present value - yearly payment) x time

  • Discount rate = 10%
  • Present value = $40,500,000
  • Yearly  payment = $6,000,000
  • Time = 6 months / 12 months = 0.5

interest expense = 10% x ($40,500,000 - $6,000,000) x 0.5 = $1,725,000

You might be interested in
A concentration of minerals that could now be legally mined at a profit is called a.
lorasvet [3.4K]

Answer:

Reserve. resource

Explanation:

concentration of natural minerals in or on the crust of the Earth with potential to be extracted for profit.

7 0
2 years ago
If a central bank wishes to reduce inflation, it should announce its intentions and follow through with them, thereby using ____
Mice21 [21]

Answer:

C. credible

Explanation:

A credible monetary policy is the policy where the problem of inconsistency of time can be avoided also the biasness of the inflation also it keeps the inflation under a control.

Therefore in the case when the central bank wants to decrease the inflation so they are using the credible monetary policy

Hence, the correct option is C.

8 0
2 years ago
What is rent seeking in economics​
Nataly_w [17]

Answer:

Rent-seeking is the effort to increase one's share of existing wealth without creating new wealth. Rent-seeking results in reduced economic efficiency through misallocation of resources, reduced wealth-creation, lost government revenue, heightened income inequality, and potential natoinal decline

Explanation:

Rent-seeking is the effort to increase one's share of existing wealth without creating new wealth. Rent-seeking results in reduced economic efficiency through misallocation of resources, reduced wealth-creation, lost government revenue, heightened income inequality, and potential national decline

4 0
3 years ago
As Markel drives buy a local restaurant, he realizes that he hasn’t eaten all day and is famished. He stops at the restaurant, a
DochEvi [55]

Answer:

1. low- involvement decisions may sometimes enable consumers to skip steps in the consumer decision making process.

Explanation:

Consumer decision making process includes all the steps between consumer's generation of needs/wants and final purchase of the product.

The process comprises of below mentioned 5 stages:

  1. Need recognition : whereby a need is generated
  2. Search for information so as to identify products satisfying such needs
  3. Evaluation of all available alternatives i.e assessment of all available products satisfying a need and selecting the best alternative.
  4. Purchases , the stage wherein the consumer buys the selected product.
  5. Post purchase evaluation, i.e the stage when consumer evaluates whether he made the right purchase decision.

In the given case, the consumer realized that he hadn't eaten at all during the day and thus instantly stopped at a restaurant, made a regular purchase of a burger without caring for the menu or set of other available alternatives.

Here, the investment decision related to a meal, being a low cost decision and occurring in a famished state. So consumers while making such low cost decisions may not find going through the menu and spending much time in deciding as worthwhile and in short will likely skip steps in the consumer decision making process.

3 0
3 years ago
7 reasons why businesses should be aware of the political legal environment
zmey [24]

Answer:

7 reasons why businesses should be aware of the political legal environment are as follows:

1- Businesses do not cease to be part of a much larger environment, which is the nation as a whole, with which what happens in it will affect business to a greater or lesser extent.

2- Many times, the political interests of certain sectors can favor or harm certain businesses, with which businessmen must be attentive to those interests.

3- Politicians are the ones who give confidence in the country to foreign investors, with which their policies can increase or restrict competition from local investors.

4- The generation of employment that arises from a favorable political and legal environment means that businesses have the necessary workforce to maximize their production.

5- The political and economic stability allows the reinvestment of the profits of the entrepreneurs and their businesses.

6- The existence of productive development plans and other subsidies to productive companies can be used by businesses as a government aid to maximize their production.

7- In short, the stability of the nation will make it easier for businesses to prosper, while political stability usually entails economic stability.

4 0
2 years ago
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