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Olin [163]
3 years ago
5

Alex withdrew $500,000 from an account that paid 5 percent annual interest and used the funds to purchase real estate. After one

year he sold the property for $550,000. Alex's economic profit on this deal was:__________
a) 25,000
b) Not enough information provided.
c) 50,000
d) 500,000
e) 120,000
Business
1 answer:
oksano4ka [1.4K]3 years ago
7 0

Answer:

a) 25,000

Explanation:

The computation of the economic profit is shown below;

Economic profit is

= Revenue - Explicit cost - Implicit cost

= $550,000 - $500,000 - $500,000 × 5%

= $550,000 - $500,000 - $25000

= $25,000

Hence, the economic profit on this deal was $25,000

Therefore the correct option is a.

We simply applied the above formula so that the correct value could come

And, the same is to be considered  

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Rita and Paul are married and both work outside the home. Paul works as a contractor, and Rita is employed by a company. Paul te
Vesna [10]
Your answer is A. Paul is correct because the government always withholds money for taxes due from all incomes.
4 0
3 years ago
Serial Problem Business Solutions LO P4 Business Solutions sells upscale modular desk units and office chairs in the ratio of 3:
stich3 [128]

Answer:

Instructions are below.

Explanation:

Giving the following information:

The selling prices are $1,310 per desk unit and $560 per chair. The variable costs are $810 per desk unit and $310 per chair. Fixed costs are $180,000.

The company sells 3 deks per 2 chairs.

Sales proportion:

Desks= 3/5= 0.6

Chairs= 2/5= 0.4

1) Selling price per composite unit= sales proportion*selling price

Selling price per composite unit= 0.6*1,310 + 0.4*560

Selling price per composite unit=  $1,010

2) Variable cost per composite unit= sales proportion*unitary variable cost

Variable cost per composite unit= 0.6*810 + 0.4*310

Variable cost per composite unit= 610

3) Break-even point (units)= Total fixed costs / Weighted average contribution margin

Break-even point (units)= 180,000/ (1,010 - 610)

Break-even point (units)= 450 units

4) Number of units for each product:

Desks= 0.6*450= 270

Chairs= 0.4*450= 180

5 0
3 years ago
If a company buys back $100 worth of stock, this increases the cash flow to the stockholders by ___.
andreyandreev [35.5K]

If a company buys back $100 worth of stock, this increases the cash flow to the stockholders by exactly $100.

This is further explained below.

<h3>What are stockholders ?</h3>

Generally, An person or a legal organization that is registered by a company as the legal owner of shares of the share capital of a public or private business is referred to as a shareholder of that corporation.\

In conclusion, When a corporation repurchases $100 worth of its own stock, the result is an increase in cash flow of precisely $100 to the firm's investors.

Read more about stockholders

brainly.com/question/18523103

#SPJ1

7 0
1 year ago
On March 1, the board of directors declared a cash dividend of $0.75 per common share to shareholders of record on March 10, pay
RideAnS [48]

Answer and Explanation:

The Journal Entry is shown below:-

Mar-01

Cash dividends Dr,  $98,250

(131,000 ×  $0.75)

      To Dividends payable Dr, $98,250

(Being declaration of dividends is recorded)

Mar-10

No entry required

Mar-31

Dividends payable Dr, $98,250  

        To Cash $98,250

(To record payment of dividends)

5 0
3 years ago
Young Co. issues $800,000 of 10% bonds dated January 1, Year 1. Interest is payable semiannually on June 30 and December 31. The
Andreyy89

Answer:

Young should report proceeds from the sale of bonds as equal to $864,884

Explanation:

The proceeds on the sale of bonds is equivalent to the present value of all the cash flows that are likely to accrue to an investor once the bond is bought. These cash-flows are the periodic coupon payments that are paid semi-annually and the par value of the bond that will be paid at the end of the 5 years.

During the 5 years, there are 10 equal periodic coupon payments that will be made. In each  year, the total coupon paid will be

$800,000*0.1=$80,000

and this payment will be split into two equal payments equal to \frac{$80,000}{2} = $40,000 . This stream of cash-flows is an ordinary annuity

The periodic market rate is equal to \frac{0.08}{2}=0.04

The  PV of the cashflows = PV of the coupon payments + PV of the par value of the bond

=$40,000*PV Annuity Factor for 10 periods at 4%+ $800,000*\frac{1}{(1+0.04)^10}

=$40,000*8.1109+$800,000*0.67556=$864,884

4 0
3 years ago
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