Answer:
At a discount rate of zero percent this investment has a net present value of 6000, but at the relevant discount rate of 17 percent the project's net present value is -5739.
Explanation:
See document attached. To get the net present value, we make a cash-flow in excel.
At moment the investment is =$-36,000
Moment 1 and 2 = $12,000 /moment 3 =$18000
We calculate the Net cash flow (that is the difference between benefits and cost).
To get net present value, we use VNA formula.
=VNA(required rate of return; Net cash flow from moment 0 to moment 3 )+Net cash flow at moment 0
Situation 1
Interest rate 0%
Net Present Value (NPV) 6000
Situation 2
Interest rate 17%
Net Present Value (NPV) -5739
Answer:
$50,100
Explanation:
Given that
Acquired value of a financial asset other than principal market = $50,000
Sale value of the identical instrument in principal market = $50,100
Transaction cost = $200
For reporting the fair value, we have to exclude the transaction cost i.e $200 and consider that cost which is to be received while exchanging i.e $50,100
This sale value would be equal to the fair value i.e $50,100 should be reported as a fair value
Answer:
short-term securities 1,000,000 debit
cash 1,000,000 credit
---to reocrd purchase---
cash 1,025,000 debit
interest revenue 25,000 credit
short-term securities 1,000,000 credit
-- to record collection---
Explanation:
<u>calculus of interest:</u>
principal x rate x time = interest
Is important to notice we must express rate and time in the same metric, so time will be express a a portion of the year instead of 90 days:
1,000,000 x 10% x 90/360 = 25,000
