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jasenka [17]
3 years ago
11

On January 1, Year 1, Frost Co. entered into a 2-year lease agreement with Ananz Co. to lease a new computer. The lease term beg

ins on January 1, Year 1, and ends on December 31, Year 2. The lease agreement requires Frost to pay Ananz two annual lease payments of $8,000. The present value of the minimum lease payments is $13,000. Which of the following circumstances would require Frost to classify and account for the arrangement as a finance lease?
a. Frost does not have the option of purchasing the computers at the end of the lease term.
b. The fair value of the computers on January 1, year 1 is $14,000.
c. The economic life of the computers is three years.
d. Ownership of the computers remains with Ananz throughout the lease term and after the lease ends.
Business
1 answer:
satela [25.4K]3 years ago
5 0

Answer:

Frost (Lessee) and Ananz (Lessor)

The circumstance that would require Frost to classify and account for the arrangement as a finance lease is:

c. The economic life of the computers is three years.

Explanation:

a) Data:

Annual lease payments = $8,000

Present value of the minimum lease payments = $13,000

Fair value of the computer = $14,000

The economic life of the computers = 3 years

The lease period = 2 years

b) One of the conditions for classifying the lease arrangement as a finance lease is that the lease term of 2 years forms a significant part of the asset's useful life of 3 years.  Other conditions include:

Firstly, ownership of the asset is transferred to the lessee at the end of the lease term.  The second condition is that the lessee can purchase the asset below its fair value.

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Internal Environmental Analysis
Wittaler [7]

The analysis that you have been asked to examine is called SWOT Analysis. See the categorization below.

<h3>What is SWOT Analysis?</h3>

This is simply a situational analysis that considers the strengths, weaknesses, opportunities, and threats that a company might face in the execution of its business strategy.

,

Strength

• Adequate Financial Resources

• Proven Management Skills

• Ahead of the Experience Curve

• Diversify into Related Products

• Enter New Markets or Segments

• Proprietary Technology

• Vertical Integration

• Product Innovation Skills

• Well Thought of by Buyers

Weaknesses

• Too Narrow a Product Line

• Unable to Finance Needed Strategy Changes

• Falling Behind in R & D

• Vulnerability to Recession & Business Cycle

• Poor Track Record in Implementing Strategy

• Higher Overall Unit Costs than Competitors

Opportunities

• Complacency Among Rival Firms

• Falling Trade Barriers in Attractive Foreign Markets

• Serve Additional Customer Groups



Threats

• Rising Sales of Substitute Products

• Issues Costly Regulatory Requirements

Learn more about SWOT at;
brainly.com/question/20350382
#SPJ1

6 0
2 years ago
Which of the following is an example of benefit selling? dynamic ticket pricing high-pressure telemarketing tactics using a star
sladkih [1.3K]

Answer:

D. Flex plan ticket books

Explanation:

The selling in which you describe it in such a way that the product is tied in such a way that it improves the customers situation. 

e.g All are servers are manufactured in the city so you can be sure of immediate support if any issue arises.

Selling the benefits instead of a features make it easier to get higher prices, it makes the product differentiation easier and justifies the higher price being charged.

The flex tickets are an example of benefit selling because one can purchase it in any combination possible for the type of package purchased and it can be used in any chosen combination throughout the current season.

3 0
3 years ago
A firm is weighing three capacity alternatives: small, medium, and large job shop. Whatever capacity choice is made, the market
Dvinal [7]

Answer:

<u>Since expected payoff for large job shop option is highest, firm should make large job shop option as capacity choice</u>

Explanation:

Expected payoff of any capacity alternative

= Probability of moderate acceptance x Payoff of moderate acceptance + Probability of strong acceptance x Payoff of strong acceptance

= 0.40 x Payoff of moderate acceptance + 0.60 x Pay off of strong acceptance

Thus Pay off for small job shop option

= 0.40 x 24000 + 0.6 x 54000

= 9600 + 32400

= $42,000

Pay off for medium job shop option

= 0.40 x 20000 + 0.60 x 64000

= 8000 + 38400

= $ 46,400

Pay off for large job shop option

= - 0.40 x 2000 + 0.60 x 96000

= - 800 + 57600

= $56,800

7 0
3 years ago
he trend in recent years is that more and more governments A. have mandated that their central banks focus on controlling inflat
grigory [225]

Answer:

have been granting greater independence to their central banks.

Explanation:

In modern times, the world is getting faster and the concept of open market economies is emerging globally. To cope with this system, governments all over the world are giving their central banks more and more freedom so they can control and operate the market forces to some extent.

Governments know that their interference will only lead to slow and inefficient operations, which can lead to problems in over all system.

8 0
3 years ago
How much more is a perpetuity of $1,000 worth than an annuity of the same amount for 20 years? Assume an interest rate of 10% an
Veronika [31]

Answer:

The perpetuity is worth $1486.43 more than the ordinary annuity

Explanation:

A perpetuity that with an annual cash inflow or cash outflow payable for a foreseeable future - for an infinite number of period

The present value of a perpetual annuity is calculated as

PV= A/r

PV = 1000/0.1

PV =&10,000

On the other hand, an annuity with  annual cash inflows or cash outflows for certain number of years is called an ordinary annuity.

The present value of an ordinary annuity is determined as follows:

PV = (1 - (1+r)^n)/r   × A

     = (1-(1+0.1)^(-20))/0.1 × 1000

    = 8.5135  × 1000

   = 8513.56

Difference in PV =  10,000 - 8513.56

                            = $1486.43

The perpetuity is worth $ 1,486.43 more than the ordinary annuity

3 0
3 years ago
Read 2 more answers
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