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drek231 [11]
2 years ago
10

Michael earns $3,950 every month after taxes and deductions for social security and insurance. He puts $900 a month into savings

. He wants to buy a $30,000 boat. He only has $11,000 saved up for this major purchase. He is willing to postpone the purchase for 2 years (24 months) in order to reach a savings goal of $30,000. Will Michael be able to afford the boat in two years if he continues to save $900 a month?
Business
1 answer:
krek1111 [17]2 years ago
6 0

Answer:

Yes, Michael will afford the boat

Explanation:

So far Michael has saved $11,000.

The boats costs $30,000 to purchase.

Michael needs to raise $19,000  ($30,000 - $11,000) in two years to buy the boat.

Michael saves $900 per month. In 24 months he will have saved

=$900 x 24

=$21,600

Michael requires $19,000 but will have save $21,600 in two years. Therefore, he should be able to purchase the boat.

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a. The machine will take a year to build which means the payoff will only start coming in next year.

First find the present value of the perpetuity:

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You then need to find the present value of the above in the current period:

= 1,400 / ( 1 + 5%)

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Below are departmental income statements for a guitar manufacturer. The manufacturer is considering eliminating its electric gui
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Answer and Explanation:

1. The preparation of the department contribution report is presented below:

                                        WHOLESALE GUITARS

           Income statement showing Departmental contribution to overhead

                           For year Ended December 31,2015

Particulars      Acoustic Dept          Electric Dept             Combined

Sales              $112,500                  $105,500                    $218,000

Less : Cost of Goods sold  

                   -$55,675                    -$66,750                    -$122,425

Gross Profit    $56,825                    $38,750                $95,575

Direct Expenses

Depreciation Expenses  - Equipment   $10,150     $9,000     $19,150

Salaries Expenses       $17,300             $13,500                       $30,800

Supplies Expenses     $2,030             $1,700                         $3,730  

Total Direct Expenses   $29,480         $24,200                     $53,680

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Advertising Expenses                                                                 $14,325  ($8,075 + $6,250)

Rent Expenses                                                                           $12,055  ($6,105 + $5,950)

Utilities Expenses                                                                       $5,595  ($3,045 + $2,550)

Total indirect Expenses                                                             $31,975

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