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antiseptic1488 [7]
2 years ago
8

Rusty Corporation purchased a rust-inhibiting machine by paying $54,500 cash on the purchase date and agreed to pay $10,900 ever

y three months during the next two years. The first payment is due three months after the purchase date. Rusty's incremental borrowing rate is 12%. The machine reported on the balance sheet as of the purchase date is closest to: (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided.)
Business
1 answer:
svetlana [45]2 years ago
8 0

Answer:

$131,014.62

Explanation:

According to the scenario, computation of the given data are as follows,

Cash Payment = $54,500

Payment to be paid every three month = $10,900

Number of payment = 4 × 2 = 8

Interest rate = 12% annual

Interest rate (3 months) = 12% × (3÷ 12) = 3%

So, Purchase price of machine = PV of future payment + Cash payment

Where, PV of Future payment = Instalment payment × (PVAF 3%, 8)

By using PVAF table, we get

PV of Future payment = $10,900 × 7.01969 = $76,514.621

Hence, By putting the value in the formula, we get

Purchase price of machine = $76,514.62 + $54,500

= $131,014.62

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Swifty Corporation is constructing a building. Construction began on January 1 and was completed on December 31. Expenditures we
daser333 [38]

Answer:

Swifty Corporation

The actual interest for Swifty Corporation is:

$2,418,300

Explanation:

a) Data and Calculations:

Expenditures were

on March 1,          $6,380,000

on June 1,            $5,270,000

on December 31 $8,350,000

Borrowings:

on January 1 on a 5-year, 12% note = $3,240,000  Interest =   $388,800

Note payable, 10%, 3-year =                $6,380,000  Interest =  $638,000

Note payable, 11%, 4-year =               $12,650,000  Interest = $1,391,500

Total interest for Swifty Corporation = $2,418,300

b) Computation of interests:

12% note = $3,240,000 * 12% = $388,800

10% note = $6,380,000 * 10% = $638,000

11% note = $12,650,000 * 11% = $1,391,500

5 0
2 years ago
By buying a ________ bond, investors may choose to exchange their bond for shares of common stock in the company.
vesna_86 [32]

The type of bond which investors would buy that they may choose to exchange their bond for shares of common stock in the company is known as convertible bonds.

<h3>What is a Bond?</h3>

This refers to the fixed income investment which is used to show that a loan is taken by either an individual or corporation.

With this in mind, if an investor wants to later exchange their bond for shares of common stock in the company, then they would have to buy convertible bonds,

Read more about convertible bonds here:
brainly.com/question/9817093

4 0
2 years ago
A manager is trying to decide whether to purchase a certain part or to have it produced internally. Internal production could us
Sergio [31]

Answer:

For both 10,000 units and 20,000 units, the best alternative is Vendor B

Explanation:

Using the information provided in the question, we can write the following:

Annual Volume of 10,000 units

Internal Alternative 1

Variable costs = 170,000 (we multiply the variable cost per unit by total units)

Fixed costs = 20,000

Total costs = 370,000

Internal Alternative 2

Variable costs = 140,000

Fixed costs = 240,000

Total costs = 380,000

Vendor A

Total cost = 200,000 (we simply multiply the price by the quantity)

Vendor B

Total cost = 180,000

Vendor C

Total cost = 190,000

The cheapest option is Vendor B

Now for the 20,000 units:

Internal Alternative 1

Variable costs = 340,000

Fixed costs = 200,000

Total costs = 540,000

Internal Alternative 2

Variable costs = 280,000

Fixed costs = 240,000

Total costs = 520,000

Vendor A

Total cost = 400,000

Vendor B

Total cost = 360,000

Vendor C

Total cost = 380,000

Therefore, Vendor B is once again, the cheapest alternative.

5 0
3 years ago
Functions of Money Jeffrey has had a busy day. Today he went to a financial manager to begin planning for his son's future. He o
Novosadov [1.4K]

Answer:

Store of value.

Explanation:

In economics or financial accounting, money can be defined as any asset used by an individual or business entity to make purchases of goods and services at a specific period of time.

Simply stated, money refers to any asset which can be used to purchase goods and services by customers.

This ultimately implies that, money is any recognized economic unit that is generally accepted as a medium of exchange for goods and services, as well as repayment of debts such as loans, taxes across the world.

The three (3) main functions of money all over the world are;

I. Medium of exchange.

II. Unit of account.

III. Store of value.

In this scenario, Jeffrey went to a financial manager to begin planning for his son's future by opening a college savings account. Thus, this is is an example of a store of value because the purchasing power was transferred from the present to the future.

In conclusion, money being a store of value makes it possible to transfer purchasing power between traders and buyers from the present to the future.

5 0
3 years ago
Owen Company makes a product that sells for $61 per unit. The company pays $37 per unit for the varlable costs of the product an
DerKrebs [107]

Answer:

25%

Explanation:

the formula for the margin of safety is as follows

margin = current sales level -breakeven point/ current sales level x 100

expected sales unit = 20,000 units

the break-even point is fixed costs/contribution margin

fixed costs= $360,000

contribution margin = sales price- variable costs

=61-37

=24

breakeven point = $360,000/ 24

=15000

the margin of safety =  20,000-15,000/20,000 x 100

=5000/20000 x 100

=25%

7 0
3 years ago
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