Answer:
Moving averages <em>cannot be used to make future forecasts successfully because certain events like demand, supply ,quality and external factors such as competitions</em> cannot be determined with the use of Moving averages, and these factors have a huge impact on prices
Explanation:
Moving averages are generated / obtained using data from events that occurred previously hence they highlight the long-run trend of a time series, but <em>they cannot be used to make future forecasts successfully because certain events like demand, supply ,quality and external factors such as competitions</em> cannot be determined with the use of Moving averages. and these factors have a huge impact on prices
Answer:
The solution shows that a rate of return of 10% which provides an annuity factor of 4.868 generates an NPV which is equal to zero. Thus, our IRR or internal rate of return is 10%.
Explanation:
The IRR or internal rate of return is the rate at which NPV or Net Present Value of the investment becomes zero. We are provided with the initial outlay for the project and the annual cash inflows along with time period. Using the annuity factors given below, we need to find out the factor which makes the NPV zero. The NPV is calculated as follows,
NPV = Present Value of Cash Inflows - Initial Outlay
We can try out each annuity factor and see what NPV is generates.
1. 6% rate (Annuity factor = 5.582)
NPV = (30000 * 5.582) - 146040
NPV = $21420
2. 8% rate (Annuity factor = 5.206)
NPV = (30000 * 5.206) - 146040
NPV = $10140
3. 10% rate (Annuity factor = 4.868)
NPV = (30000 * 4.868) - 146040
NPV = $0
So, from the above solution we can see that a rate of return of 10% which provides an annuity factor of 4.868 generates an NPV which is equal to zero. Thus, our IRR or internal rate of return is 10%
EcoMart establishes General Journal
May 2
Dr Petty cash 1050
Cr Cash 1050
May 30
Dr Merchandise inventory 120
Dr Postage expense 359
Dr Miscellaneous expenses 240
Dr Cash short and over 9
Cr Cash728
June 1
Dr Petty cash 150
Cr Cash 150
Workings:
May 30,Merchandise inventory 120+ Postage expense 359+ Miscellaneous expenses 240+ Cash short and over 9 = $728
June 1
1050-1200= 150
