Answer:
16.22%
Explanation:
3/15, net 45 means that if Newsome pays within 15 days, it will get discount of 3%, otherwise it can pay within 45 days in full.
Nominal annual percentage cost of non-free trade credit based on 365 days can be calculated using the below formula:
Discount %/(100%-Discount %)*(365/(Actual credit days – Discount days))
In this case
Discount%=2%
Actual credit days=60
Discount period=15
Cost of non- free credit=2%/(100%-2%)*(365/(60-15)
=2%/98%*(365/45)
=0.02*8.11
=16.22%
The reason that interest rate risk is greater for <u>long</u>-term bonds than for <u>short</u>-term bonds is that the change in rates has a greater effect on the present value of the <u>Par Value</u> than on the present value of the <u>Coupon</u>.
<h3>What is a Long-term Bond?</h3>
Long-term bonds are investments that span a maturity term of at least 10 years and up to 30 years.
They usually pay a higher interest rate than the short-term bonds which span between a year and three years.
See the link below for more about long-term bonds:
brainly.com/question/3521722
Answer:
25,768
Explanation:
The square root rule of inventory states that the average inventory level can be calculated by multiplying the total inventory by the square root of the number of future warehouses divided by the number of the current warehouses.It's purpose is to estimate the effect of risk pooling.
Workings
X2 =( X1)* ( N2/N1)
Inventory per warehouse = 4000
No of Warehouse = 5
To inventory = 4000*5 = 20,0000
New no of Ware house = 3
20000(√5/3)=
20000*1.29=25,768
Answer: = $2,731.14
Explanation:
First find the annual payment.
The payment will be constant so is an annuity.
Present Value of an Annuity = Payment * Present Value Interest Factor of an annuity
4,000 = Payment * PVIFA( 3 periods, 5%)
4,000 = Payment * 2.7232
Payment = 4,000 / 2.7232
Payment = $1,468.86
This annual Payment is divided into an interest component and a component going towards principal repayment.
Interest component = 5% * 4,000
= $200
Amount going to principal = 1,468.86 - 200
= $1,268.86
Amount of Principal Outstanding = 4,000 - 1,268.86
= $2,731.14
The amount at which Kitchen Supply Corporation should initially record the Factory immediately after the purchase is <u>$421,80</u><u>0</u>.
However, the Renovation Cost of $50,000 should increase the amount of the Factory to <u>$471,800</u> ($421,800 + $50,000) immediately after the renovation.
<h3>Why is renovation cost capitalized?</h3>
The cost of renovation is usually capitalized because the cost needs to be recorded as an asset on the balance sheet, instead of an expense in the income statement.
Thus, the final amount the Factory should be recorded after the renovation is <u>$471,800</u>.
Learn more about asset capitalization at brainly.com/question/25999205
