Answer:
It is 1.12 (B)
Explanation:
Profitability Index= PV of Future cash flow/Initial Investment
= $72,800/$65,000
=1.12
The index is a useful tool for ranking investment projects and making decision most especially when there is limited capital availbal and all the viable projects cannot be executed. It showed the value created per unit of investment.
Hence, the higher the profitability index, the more attractive the investment is.
All of them but computers
Answer:
Both
Explanation:
Interior design business combines both elements of service and product business. A majority of businesses in the interior design sector will offer their clients consulting services and also sell furniture and other products required to achieve the intended look. Almost all the store that sells decor and other interior designs product will offer consultation services on interior design.
The interior design business is more of a practice than a theory sector. Customers want to see, feel, and experience the final product before they can commit. Most start-ups will begin by providing consulting services only. As they grow, they set up a showroom where they exhibit and sell interior design products.
Answer:
Journal entries for the transactions are given below
Explanation:
1. Development of new product
DEBIT CREDIT
Research and development $24,000
Cash $24,000
2. Paid the plaintiff for losing patent
DEBIT CREDIT
Legal fee (expense) $8,000
Cash $8,000
3. Bought Equipment and signed non-interest bearing note
DEBIT CREDIT
Equipment Cash price $37,000
Discount on note payable $5,000
Cash paid $18,000
Note payable $24,000
4. Installed sprinkler system
DEBIT CREDIT
Sprinkler system $40,000
Cash $40,000
5. Plaintiff paid for successful infringement suit on its patent
DEBIT CREDIT
Patent $24,000
Cash $24,000
6. Bought New equipment and traded old one
DEBIT CREDIT
New Equipment $13,600
Accumulated depreciation $6,800
Loss on sale $3,400
Old Equipment $13,400
Cash $10,400
Working:
Accumulated depreciation = Original Cost - book value
Accumulated depreciation = $13,400 - $6,600
Accumulated depreciation = $6,800
Answer:
Government authorities :
They will use the financing statement to ensure the fairness of the business and to receive proper amount of tax.
Investors :
Current or potential investors would check financial statements to ensure they will suitable returns after investment.
Creditors :
They will check financial statements to make sure they get their due money back.
Employees :
The employees will ask for bonus if the company performance in statements is good,
