Answer:
Correct Answer:
b. Select the choice with the highest value.
Explanation:
In the rational choice decision process model, it is a series of process whereby steps are taking towards making a beneficial decision for a given business setup. <em>In a situation where </em><u><em>possible choices has been discovered,</em></u><em> the next step would be </em><u><em>to select the choice with the highest value which is going to be implemented.</em></u>
Answer:
The answer is: Montana should recognize its revenue equally throughout the year as they provide their services.
Explanation:
The accrual basis of accounting recognizes revenue when earned. This means that Montana Corporation should recognize revenue when its service has been performed, regardless of when those services were paid. That means they should recognize revenue equally throughout the year (every month) as they provide their services.
Answer:
- <u><em>1. CPI in the subsequent year: 1,135</em></u>
<u><em></em></u>
- <u><em>2. Rate of inflation: 13.5%</em></u>
<u><em></em></u>
Explanation:
<u>1. Calculate the CPI</u>
<em></em>
<em>CPI </em>is the consumer price index.
CPI is created using a basket of goods and services that are typically consumed.
In the given case the typical basket is:
- Gasoline and car maintenance
- Phone service (basic service plus 10 long-distance calls).
Then to find the CPI for a determined year you multiply each item by its price and then add up all the results.
For the base year, the expenditures per month were:
- 25 pizzas at $ 10: $10 × 25 = $250
- Gasoline and car maintenance: $100
- Phone service (basic service plus 10 long-distance calls): $50
Then, the CPI for the base year is:
- CPI = $250 + $600 + $100 + $50 = $1,000
The year following the base year, the expenditures per month are:
- 25 pizzas at $ 11 : $11 × 25 = $275
- Gasoline and car maintenance: $120
- Phone service (basic service plus 10 long-distance calls): $40
Then the CPI for the followng year is:
- CPI = $275 + $700 + $120 + $40 = $1,135
<u>2. Calculate the rate of inflation</u>
The rate of<em> inflation</em> is defined as the increase of the CPI of the given year with respect ot the base year:
The formula to calculate the rate of inflation is:
- Inflation = (CPI of the year - CPI of the base year) / (CPF of the base year) × 100
- Inflation = [ (1,135 - 1,000) / (1,000)] × 100 = 13.5%
Hence, <em>the rate of inflation for the subsequent year is 13.5%</em>
Answer:
The company paid $278,031
Explanation:
Giving the following information:
A company bought a parcel of land twenty years ago. The land is currently worth $575,000. The yearly appreciation rate has been 3.7%.
<u>To calculate the past value of the land, we need to use the following formula:</u>
PV= FV/(1+i)^n
PV= present value (20 years ago)
n= 20
FV= 575,000
i= 0.037
PV= 575,000 / (1.037^20)
PV= $278,031
Answer:
How much more earned is $21.98
Explanation:
Calculation of the amount earned when investment in paying on simple interest
Interest = Amount * Interest rate * No of years
Interest = 1320 * 4% * 5
Interest = $264
Total amount = Interest + Amount invested
Total amount = $1320 + 264
Total amount = $1,584
Therefore, the total amount earned when earning on simple interest of 4% is $1,584
Calculation of the amount earned when investment interest in paying compounded annually
Pv= 1320
n= 5
i= 4%
Fv= ?
Fv= P(1+i)^-n
Fv= 1320(1+0.04)^5
Fv= 1320(1.04)^5
Fv= 1320(1.216652)
Fv= $1605.98
Therefore, the total amount earned when earning on interest compounded annually is $1,605.98
Calculation of how much more earned
Amount earned = Amount earned as per compounded interest - Amount earned as per simple interest
Amount earned = $1,605.98 - $1,584
Amount earned = $21.98
Therefore, how much more earned is $21.98
