What information is necessary to calculate the after-tax return on investment (ROI)?

Mid-South Auto Leasing leases vehicles to consumers. The attraction to customers is that the company can offer competitive price

borishaifa [10]

Answer:

1) sales revenue 61,995.26

2) lease receivables 61,995.26 debit

sales revenue 61,995.26 credit

cost of good sold 56,000 debit

truck inventory 56,000 credit

truck 61,995.26 debit

lease payable 61,995.26 credit

3)

$\left[\begin{array}{cccccc}$Time&$Beg&$Cuota&$Interes&$Amort&$Ending\\0&61995.26&7000&&7000&54995.26\\1&54995.26&7000&1649.86&5350.14&49645.12\\2&49645.12&7000&1489.35&5510.65&44134.47\\3&44134.47&7000&1324.03&5675.97&38458.5\\4&38458.5&7000&1153.76&5846.24&32612.26\\5&32612.26&7000&978.37&6021.63&26590.63\\6&26590.63&7000&797.72&6202.28&20388.35\\7&20388.35&21000&611.65&20388.35&0\end{array}\right]$

For the lessor will be interest revenue while interest expense for the lessee

4)

cash 7,000 debit

interest revenue 1,649.86 credit

lease receivables 5,510.65 credit

--entry for the lessor--

lease payable 5,510.65 debit

interest expense 1,649.86 debit

cash 7,000 credit

--entry for the lessee--

5)

cash 21,000 debit

interest revenue 611.65 credit

lease receivables 20,388.35 credit

--entry for the lessor--

lease payable 20,388.35 debit

interest expense 611.65 debit

cash 21,000 credit

--entry for the lessee--

Explanation:

1) the sales revenue will be the present value of all the lease payments and the residual value of the asset or the bargain-option

Present Value of Annuity-due

$C \times \displaystyle \frac{1-(1+r)^{-time} }{rate}(1+rate) = PV\\$

C 7,000

time 8

rate 0.03

$7000 \times \displaystyle \frac{1-(1+0.03)^{-8} }{0.03}(1+0.03) = PV\\$

PV $50,611.9807

PRESENT VALUE OF LUMP SUM

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity 14,000.00

time 7.00

rate 0.03

$\frac{14000}{(1 + 0.03)^{7} } = PV$

PV 11,383.28

PV of the lease: 50,611.98 + 11,051.73 = 61,995.26

2) the lessor will have a lease receivable while the lessee has a lease payable.

$\left[\begin{array}{cccccc}$Time&$Beg&$Cuota&$Interes&$Amort&$Ending\\0&61995.26&7000&&7000&54995.26\\1&54995.26&7000&1649.86&5350.14&49645.12\\2&49645.12&7000&1489.35&5510.65&44134.47\\3&44134.47&7000&1324.03&5675.97&38458.5\\4&38458.5&7000&1153.76&5846.24&32612.26\\5&32612.26&7000&978.37&6021.63&26590.63\\6&26590.63&7000&797.72&6202.28&20388.35\\7&20388.35&21000&611.65&20388.35&0\end{array}\right]$

3 0

3 years ago

A materials requisition slip showed that direct materials requested were $66,000 and indirect materials requested were $9,000. T

patriot [66]

Work In Process Inventory 66,000

Manufacturing Overhead 9,000

Raw Materials Inventory 75,000

Hope this helps :)

6 0

3 years ago

Assume a purely competitive firm is selling 200 units of output at $3 each. At this output, its total fixed cost is $100 and its

raketka [301]

The correct option is: maximizing its profit, but not necessarily the maximum profit.

<h3>What is Profit Maximization in a Perfectly Competitive Market ?</h3>

The perfectly competitive firm can choose to sell any quantity of output at exactly the same price. This implies that the firm faces a perfectly elastic demand curve for its product: buyers are willing to buy any number of units of output from the firm at the market price.

When the perfectly competitive firm chooses what quantity to produce, then this quantity—along with the prices prevailing in the market for output and inputs—will determine the firm’s total revenue, total costs, and ultimately, level of profits.

A perfectly competitive firm has only one major decision to make—namely, what quantity to produce. To understand why this is so, consider the basic definition of profit:

Profit=Total revenue−Total cost

(Price) (Quantity produced)−(Average cost) (Quantity produced)

According the question scenario,

Given:

Firm is selling = 200 units

output = $3 each

fixed cost = $100

variable cost = $350

solution:

Total average cost = variable cost + fixed cost .........(1)

Total average cost = 350 + 100

Total average cost = $450

Cost per unit = average cost ÷ no of unit ...................(2)

Cost per unit = 450 ÷ 200

Cost per unit = $2.25

So here firm is incurring per units is $2.25 but here earning per unit is $3.

So that here firm is earning economic profit as here market price is greater than earning maximum profit.

Therefore, we can conclude that the correct option is : maximizing its profit, but not necessarily the maximum profit.

Learn more about Profit Maximization on:

brainly.com/question/13464288

#SPJ4

8 0

2 years ago

I was doing good until this question

IrinaVladis [17]

i believe it is all but 2

7 0

3 years ago

If you sold 17 units this week out of 153 units in inventory what percent of your inventory did you sell?

storchak [24]

Answer:

26%

Explanation:

5 0

4 years ago