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3 years ago

What is a sinking fund?

1 answer:

4 0

A fund formed by periodically setting aside money for the gradual repayment of a debt or replacement of a wasting asset.

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If a factory produces 100 TV sets per year, each TV will be quite expensive to make. However, if a factory produces 20,000 TV se

ser-zykov [4K]

Answer:

The correct answer is D: economies of scale

Explanation:

Economies of scale are the diminished cost by companies when production becomes efficient. Companies can achieve economies of scale by increasing production and lowering costs. This happens because fixed costs are spread over a larger number of goods. There are implications in variable costs as well (for example in obtaining discounts by large purchases from suppliers). In general, the larger the scale, the more cost savings.

The cost per unit depends on how much the company produces. Larger companies can produce more by spreading the cost of production over a larger amount of goods. Specialization of labor and more integrated technology boost production volumes. Lower per-unit costs can come from bulk orders from suppliers, larger advertising buys, or lower cost of capital. Spreading internal function (for ex: accounting, information technology, and marketing) costs across more units produced and sold helps to reduce costs.

5 0

3 years ago

Why should countries specialize in producing goods with which they have a comparative advantage rather than an absolute advantag

Gelneren [198K]

a country might have an absolute advantage in producing a good because it has a large population this doesn't mean that the country is more efficient than other countries If a country has a comparative advantage its opportunity cost is lower so by specializing and trading a good that a country has a comparative advantage with the country can get more out of what it produces.

8 0

3 years ago

Pontchartrain Company issues $20,000,000, 7.8%, 20-year bonds to yield 8% on January 1, 2017. Interest is paid on June 30 and De

solmaris [256]

Answer:

$1,568,498

Explanation:

First calculate the Amont of discount

Discount on the bond = Face value - Proceeds from the bond = $20,000,000 - $19,604,145 = $395,855

Now prepare the bond amortization

The Bond Amortization schedule is attached with this answer, please find it.

Now calculate the interest expense for 2017

Interest Expense 2017 = $784,165.80 + $784,332.43

Interest Expense 2017 = $1,568,498.23

Interest Expense 2017 = $1,568,498

3 0

3 years ago

Your insurance agent is trying to sell you an annuity that costs $75,000 today. By buying this annuity, your agent promises that

mixer [17]

Answer:$120,000

Explanation: multiply $500 and 12 and get 6,000 then multiply 6,000

then multiply 6000 and 20 and get 120,000

6 0

3 years ago

A company, which is currently operating at full capacity, has sales of $2,480, current assets of $820, current liabilities of $5

forsale [732]

Answer:

$61.60

Explanation:

Equity funding need = Projected assets - Projected liabilities - Current equity - Projected increase in retained earnings

Equity funding need = $2,739 - $561 - $1,980 - $136.40

Equity funding need = $61.60

Workings

Projected assets = (Current assets + Fixed assets) * 1.10 = 820+1,670 * 1.10 = $2,739

Projected liabilities = Current liabilities * 1.10 = 510 * 1.10 = $561

Current equity = Current assets + Fixed assets - Current liabilities = 820 + 1,670 - 510 = $1,980

Projected increase in retained earnings = Sales*5% * 1.10 = $2,480*5% * 1.10 = 124*1.10 = $136.40

5 0

3 years ago