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3 years ago

Ordinary simple interest brings increased revenue to the lender. The general practice

Business

1 answer:

densk [106]3 years ago

6 0

Answer:

Exact = $34.5

Ordinary = $35

Explanation:

Given that :

Principal, P = $1500

Interest rate = 14% = 0.14

Number of days = 60

For exact :

Exact simple interest uses 365 days :

Simple interest = principal * rate * time

Simple interest = $1500 * 0.14 * 60 / 365 = 34.520547 = $34.5

For ordinary simple interest :

Simple interest = principal * rate * time

Simple interest = $1500 * 0.14 * 60 / 360 = $35

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in preparing a statement of cash flows under the indirect method, an increase in accounts payable would be reported or included

Nana76 [90]

Answer:

In preparing a statement of cash flows under the indirect method, an increase in accounts payable would be reported or included as a(n):

source of cash.

Explanation:

Accounts payable are liabilities owed to suppliers for goods or services. They are listed on the balance sheet under current liabilities and on the cash flow statement under operating activities. When preparing the statement of cash flows, an increase in accounts payable is regarded as a source of cash while a decrease is regarded as a use of cash.

7 0

3 years ago

Joanette, Inc., is considering the purchase of a machine that would cost $520,000 and would last for 7 years, at the end of whic

Dovator [93]

Answer:

Net present value = -$22,531

Explanation:

As per the data given in the question,

Computation of NPV project

Particulars Period Pv factor at 14% Amount Present value

Cash inflows:

Annual saving in costs 1-7 4.288305 $112,000 $480,290

Salvage value 7 0.399637 $52,000 $20,781

Recovery of working capital 7 0.399637 $6,000 $2,398

Present value of cash inflows $503,469

Less: Cash outflows

Cost of Machine 0 1 $520,000 $520,000

Working capital 0 1 $6,000 $6,000

Net present value -$22,531

Working Note

The present value of cash inflows is

$480,290+ $20,781+$2,398 = $503,469

And, the net present value is

= $503,469- $520,000-$6,000

= -$22,531

5 0

3 years ago

On January 1, 2021, Laramie Inc. acquired land for $9.6 million. Laramie paid $2.9 in cash and signed a 6% note requiring the co

Alexxandr [17]

Answer:

$9.6 million

Explanation:

The amount Laramie would record in its books of account in respect of the land acquisition cost is the sum of the cash paid now and the notes payable .

That effectively gives acquisition cost of $9.6 million ($2.9 million+$6.7 million).

The interest payable on the notes payable of $6.7 million would be treated as expense in the income statement of years 2021 and 2022 respectively without being added to the acquisition cost since it is a revenue expense and should not be capitalized.

6 0

3 years ago

Equipment with an estimated market value of $30,000 is offered for sale at $45,000. The equipment is acquired for $15,000 in cas

ra1l [238]

Answer:

$35,000

Explanation:

According to accounting standard IFRS 16 Property, Plant and Equipment is initially recorded at its cost. Estimated market value and offer price will not be considered to record this transaction. Cost incurred for this equipment is as follow:

Cash payment = $15,000

Note payable = $20,000

Total Cost = $15,000 + $20,000 = $35,000

6 0

3 years ago

A manager should attempt to maximize the value of the firm by changing the capital structure if and only if the value of the fir

faust18 [17]

Answer:

Option a

Explanation:

In simple words, value maximization refers to the process under which the managers of an organisation tries to make or increase the existing economic profits, that is, the money left with the organisation after paying for the obligations of all the money providers including the lat in hierarchy, the equity shareholders.

Value maximization can be performed by changing the capital structure which affects the payment obligations. The value maximization affects all the stakeholders of the organisation therefore, the decision should be made by tasking into consideration them all.

6 0

3 years ago