You are borrowing money to buy a car. If you can make payments of $320 per month starting one month from now at an interest rate
1 answer:
Answer:
the present value is $12,151.67
Explanation:
The computation of the amount that should be borrowed today i.e. present value is shown below:
Given that
PMT = $320
Rate of interest = 12 ÷ 12% = 1%
NPER = 4 × 12 = 48
FV = $0
The formula is shown below
= -PV(RATE;NPER;PMT;FV;TYPE)
After applying the above formula, the present value is $12,151.67
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Answer:
Vaughn should produce Plain as it makes greater profit.
Explanation:
Vaughn Manufacturing can sell all the units it can produce of either Plain or Fancy but not both.
Plain has a unit contribution margin of $86 and takes two machine hours to make and Fancy has a unit contribution margin of $111 and takes three machine hours to make.
There are 2400 machine hours available to manufacture a product.
Profit per machine hour for Plain
=
= $43
Profit per machine hour for Fancy
=
= $37
The difference in profit
= $43 - $37
= $6
Plain makes $6 more profit per machine hour than Fancy.