Which of the following is an appropriate way to prepare for a meeting?
2 answers:
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Answer:
$30,600
Explanation:
Accounts receivable should comprise the total amount of cash from sales during the quarter and the amount of credit sales collected during the quarter in question, so the 20% to be collected in the following quarter shouldn't be represented in this budgeted sheet. Assuming that cash and credit payments represent the totality of net sales, accounts receivable for the quarter can be represented as follows:
Jericho would report $30,600 on the budgeted balance sheet.
Answer: $80 million per year for 25 years
Explanation:
The option you should choose is one that will guarantee you the highest present value.
This means that you need to discount the annual payment of $80 million per year for 25 years to find the present value. As you did not include a rate, we shall assume a rate of 8% for reference purposes.
The annual payment is an annuity so the present value can be calculated by:
Present value of annuity = Annuity payment * Present value interest factor, rate, no. of years
= 80,000,000 * Present value interest factor, 8%, 25 years
= 80,000,000 * 10.6748
= $853,984,000
<em>The present value of the annual payment is more than the present value of the $850 million received today so the Annual payment should be taken. </em>
