Answer:
d. A credit to Prepaid Insurance for $680.
Explanation:
The computation of the prepaid insurance is shown below:
Given that
Four month prepaid insurance = $2,720
For one month, the prepaid insurance is
= $2,720 ÷ 4 months
= $680
Since we have to record the prepaid expenses for 1 month, we divided the total prepaid insurance by the 4 months due to that it decreases by $680 and that's why we credited this account
The answer is 2. Highest returns
Answer:
A
Explanation:
you have a better chance with understanding the way it works and sees if it really interest you and it's something you want.
Answer:
At 6.31 % discount rate would you be indifferent between these two plans.
Explanation:
given data
plan x = $22,000
plan y = $32,000
time t = 19 year
solution
we will equate here both present value and that is express as
Present Value of Perpetuity = .................1
Present Value of Annuity = .............2
equating both equation 1 and 2
=
\frac{22000}{r} = \frac{32000}{r}(1 - (1 + r)^{-19})
(1 + r)^{-19} = 1 - \frac{22000}{32000}
solve it we get rate r
r = 0.063131
rate = 6.31 %
so at 6.31 % discount rate would you be indifferent between these two plans.