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balandron [24]
2 years ago
5

bob and barbara are friends. bob takes out a $10000 loan and agrees to repay it over 12 years making annual level payments at an

effective rate of 5.62499%. at the same time barbara takes out a $10000 loan and agrees to repay it by making annual interest payments at an annual effective interest rate of i. she also agrees to make annual level deposits into a sinking fund that earns 4% annual effective interest so as to accumulate $10,000 at the end of the 12 years. bob and barbara discover they have the same total annual expenditures resulting from their loans. find the rate i.
Business
1 answer:
mamaluj [8]2 years ago
8 0

Answer:

5.0285%

Explanation:

Bob's annual payment is $1,168.37 (using a financial calculator)

Barbara's annual interest payment = $1,168.37 - annuity that will have a future value of $10,000 in 12 years

future value of annuity = payment x [(1 + r)ⁿ - 1] / r

  • r = 4%
  • future value = $10,000
  • n = 12

$10,000 = payment x [(1 + 0.04)¹² - 1] / 0.04

$10,000 = payment x 15.0258

payment = $10,000 / 15.0258

payment = $665.52

Barbara's annual interest payment = $1,168.37 - $665.52 = $502.85

Barbara's effective interest rate i = $502.85 / $10,000 = 5.0285%

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Galen Company income under variable costing is $1,050,000. Fixed production costs in ending inventory are $300,000 and $250,000
lana [24]

Answer:

Income under absorption costing = $1,100,000

Explanation:

Marginal and absorption costing are two different methods to deal with fixed production overheads and and decide whether or not they are included in valuation of inventory.

<u>Valuation of inventory</u>

Opening and closing inventory are valued at variable cost under variable costing.  Whereas in absorption costing, opening and closing inventory are valued at full production cost (including fixed production overheads).

<u>Reconciling profits reported under two different methods</u>

When inventory levels increase or decrease during a period then profits will differ under absorption and marginal costing because of fixed production cost.

Net Income under absorption costing = Income under variable costing + fixed production cost in ending inventory – fixed production cost in beginning inventory

= $1,050,000 + $300,000 - $250,000

= $1,100,000

7 0
3 years ago
Joe and Michelle have a partnership firm. Based on the income-based method of calculating GDP, what category is the income earne
tekilochka [14]

Answer: B) employee’s compensation.

The income approach to measure gross domestic product or GDP starts with the income earned (wages plus plus rents plus interest plus profits) from the production of goods and services.

Based on the income-based method of calculating GDP, income or wages earned by Joe and Michelle for being partners can be categorized under B) employee’s compensation.


3 0
2 years ago
site:coursehero.com why is it crucial to collect and analyze data when planning professional development sessions?
Neporo4naja [7]

Students are required to evaluate and analyze the data they gather in order to develop explanations for their results.

<h3>What is analyzing data?</h3>

To analyze anything is to break it down into its component parts and look at each one separately. Getting raw data and turning it into information that users can use to make decisions is the process of data analysis. In order to find answers, validate theories, or test hypotheses, data is gathered and evaluated.

Data analysis, according to statistician John Tukey, is:

"Procedures for analyzing data, techniques for understanding the findings of such procedures, methods for organizing the collection of data to make its analysis simpler, more accurate, or more precise, and all the equipment and results of (mathematical) statistics which apply to analyzing data."

To learn more about data analysis visit:

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7 0
1 year ago
Which term refers to the fluctuations of growth and decline in an economy?
slava [35]
The fluctuation of growth and decline in an economy is called BUSINESS CYCLE OR ECONOMY CYCLE.
The fluctuations in business cycle usually involves shift between period of relatively rapid economic growth and period of relative stagnation or decline. Business cycle is measured by considering the growth rate of real gross domestic product of the nation concerned.
5 0
3 years ago
Monitor Muffler sells franchise arrangements throughout the United States and Canada. Under a franchise agreement, Monitor recei
Sliva [168]

Answer:

1. $163,800

2. Dr Cash $ 89,000

Dr Notes receivable $ 671,000

Cr Deferred revenue $ 760,000

3. $ 607,120

Explanation:

1. Computation of the amount that Monitor would calculate as the stand-alone selling price

Total amount of franchise agreement $760,000

Less: stand-alone selling price of training $ (18,200)

Less: stand-alone selling price of building and equip $ (578,000)

Stand-alone selling price of five-year right $163,800

2. Preparation of journal entry that Monitor would record on July 1, 2016,

Dr Cash $ 89,000

Dr Notes receivable $ 671,000

(760,000-89,000)

Cr Deferred revenue $ 760,000

3. Calculation for the amount of revenue that Monitor would recognize in the year ended December 31, 2016,

Revenue to be recognised on:

1st Sep 2021:

Training $ 18,200

Building and Equipment sale $ 578,000

31st Dec 2021:

$163,800/60 Months*4 Months $ 10,920

Total Revenue to be recognized $ 607,120

Note that five-year will give us 60 months (5*12months and September to December will give us 4 months

6 0
2 years ago
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