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alekssr [168]
3 years ago
7

The amount of increase or decrease in cost that is expected from a particular course of action as compared with an alternative i

s:
Business
1 answer:
Vikentia [17]3 years ago
7 0

Answer:

Differential cost

Explanation:

Differential cost is defined as variance in cost that will be incurred between two courses of action. This is used to evaluate the best option of two investments under consideration.

The option that has more revenue will have less cost. So differential cost calculation is used to determine line of action that will bring least cost.

For example if one alternative action will entail use of a warehouse of $30,000, and the alternative is to use just in time inventory practice thereby requiring $10,000 in storage cost.

The best option is the just in time option

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Ellis issues 8.0%, five-year bonds dated January 1, 2018, with a $530,000 par value. The bonds pay interest on June 30 and Decem
Ket [755]

Answer:

1. Total interest rate is $166,790

2. Refer to the attached file for the straight-line amortization table for the bonds' life.

3.

To record interest rate paid in 30th June 2018:

Dr Interest expenses                            16,679

Dr Premium on bond payable             4,521

Cr Cash                                                 21,200

To record interest rate paid in 31st Dec 2018:

Dr Interest expenses                            16,679

Dr Premium on bond payable             4,521

Cr Cash                                                 21,200

Explanation:

Total interest rate as followed : Interest payment - Premium on bond payable = 530,000 x 8% /2 x 10 - (575,210 - 530,000) =166,790.

6 0
3 years ago
Match the following terms to their definition: 1. expected value 2. liquidity 3. fixed assets 4. point of sales terminals 5. sel
koban [17]

Answer:

1.A representative quantity from a probability distribution arrived at by multiplying each outcome times the associated probability and summing up the products.

2.The relative convertibility of short-term assets to cash.

3.Assets that are assumed to be long term in nature.

4. Computer terminals in retail stores that may be used for inventory control or other purposes.

5. Assets that are converted to cash within the normal operating cycle of the firm.

6.Financing provided by sellers or suppliers in the normal course of business.

7.Equal monthly production used to smooth out production schedules and employ manpower and equipment more efficiently.

Explanation:

8 0
3 years ago
Green Co. paid $28,400 in dividends and $29,571 in interest over the past year. During the year, net working capital increased f
inn [45]

If Green Co. paid $28,400 in dividends and $29,571 in interest over the past year. During the year, net working capital increased from $13,986 to $18,719.  During the year, the company issued $25,500 in new equity and paid off $21,700 in long-term debt. What the company's cash flow from assets will be is: $48,371

First step is to calculate the cash flow to creditor  

Cash flow to creditors   = $21,700 + $29,571  

Cash flow to creditors   = $51,271

 

Second step is to calculate the cash flow to Stockholders

Cash flow to Stockholders =$28,400 - $25,500  

Cash flow to Stockholders =$2,900

Now let determine the cash flow from assets using this formula

Cash flow from assets = Cash flow to creditors + Cash flow to stockholders

Let plug in the formula  

Cash flow from assets = $51,271 + $2,900  

Cash flow from assets = $48,371

Inconclusion if Green Co. paid $28,400 in dividends and $29,571 in interest over the past year. During the year, net working capital increased from $13,986 to $18,719.  During the year, the company issued $25,500 in new equity and paid off $21,700 in long-term debt. What the company's cash flow from assets will be is: $48,371

Learn more here:

brainly.com/question/11009567

6 0
2 years ago
Falcon Crest Aces (FCA), Inc., is considering the purchase of a small plane to use in its wing-walking demonstrations and aerial
Simora [160]

Answer:

Net present value at 8%=($42510)

Explanation:

Explanation- Net present value   = Present value of cash inflows – Total outflows

={(19000*6.7100) - $170000}

=$127490- $170000

= ($42510)

Annual net cash inflows = Net income+ Depreciation

= $4000+$15000

= $19000

Straight line Method:-

= Cost of asset- Salvage value of asset/No. of useful life (years)

=($170000-$20000)/10 years

=$150000/10 years = $15000

Net present value at 3%=($7926)

Explanation- Net present value   = Present value of cash inflows – Total outflows

={(19000*8.5302) - $170000}

=$162074- $170000

= ($7926)

Annual net cash inflows = Net income+ Depreciation

= $4000+$15000

= $19000

Straight line Method:-

= Cost of asset- Salvage value of asset/No. of useful life (years)

=($170000-$20000)/10 years

=$150000/10 years = $15000

7 0
3 years ago
Golden Sales has bought $135,000 in fixed assets on January 1st associated with sales equipment. The residual value of these ass
skad [1K]

Answer:

Golden Sales

a. Annual Straight-line Depreciation = $31,250

Sample Depreciation Journal Entries:

Journal Entry:

1st year, Dec. 31:

Debit Depreciation Expense $31,250

Credit Accumulated Depreciation $31,250

2nd year, Dec. 31:

Debit Depreciation Expense $31,250

Credit Accumulated Depreciation $31,250

3rd year, Dec. 31:

Debit Depreciation Expense $31,250

Credit Accumulated Depreciation $31,250

4th year, Dec. 31:

Debit Depreciation Expense $31,250

Credit Accumulated Depreciation $31,250

b. Journal Entries (Double-declining-balance method)

1st year, Dec. 31

Debit Depreciation Expense $67,500

Credit Accumulated Depreciation $67,500

2nd year, Dec. 31

Debit Depreciation Expense $33,750

Credit Accumulated Depreciation $33,750

3rd year, Dec. 31

Debit Depreciation Expense $16,875

Credit Accumulated Depreciation $16,875

4th year, Dec. 31

Debit Depreciation Expense $6,875

Credit Accumulated Depreciation $6,875

Explanation:

a) Data and Calculations:

Fixed assets bought on January 1 = $135,000

Estimated service life = 4 years

Estimated residual value = $10,000

Depreciable amount = $125,000 ($135,000 - $10,000)

Annual Straight-line Depreciation = $31,250 ($125,000/4)

b. Double-declining balance method:

Depreciation rate = 100%/4 * 2 = 50%

Year 1 Depreciation = $67,500 ($135,000 * 50%)

Year 2 Depreciation = $33,750 ($67,500 * 50%)

Year 3 Depreciation = $16,875 ($33,750 * 50%)

Year 4 Depreciation = $6,875 ($16,875 - $10,000)

5 0
3 years ago
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