Answer:
c) $86,823
Explanation:
The balance in the lease payable after two years will be: $86,823
Answer:
the net present value is $13,131
Explanation:
The computation of the net present value is shown below
As we know that
Net present value = Annual cash inflows × PVIFA factor for 4 years at 11% - Initial investment
= $138,000 × 3.1024 - $415,000
= $428,131 - $415,000
= $13,131
Hence, the net present value is $13,131
We simply applied the above formula so that the correct value could come
And, the same is to be considered
Answer:
Determining when the cumulative total of net cash flows reaches zero.
Explanation:
Payback calculates the amount of time it takes to recover the amount invested in a project from it cumulative cash flows
Assume 20,000 was invested in a project, Cash flows in year 1 = 10,000 cash flow in year 2 = 20,000
Payback = 1.5 years
Amount invested = -20,000
Amount recovered in year 1 = -20,000 + 10,000= -10,000
Amount recovered in year 2 = -10,000 + 15,000 = 5000
Payback = 1 + 10,000 / 15,000 = 1.5
Answer:
The price on the black market tends to be higher.
Explanation:
When price ceilings are placed in legal markets, buyers are able to get goods and services at lower prices. But sellers may not be willing to sell unlimited supply of goods at the low price. This could lead to artificial scarcity, and formation of black markets.
The main aim of black markets is for suppliers to maximise profits, so a supplier is able to sell his goods at an amount above the price ceiling set in the legal market.
Also black markets are characterised by practices such as tax evasion, which are beneficial to the suppliers.
Option B, The predetermined overhead allocation rate is based on actual costs.
Explanation:
The term "pre-set overall rate" refers to the allocation rate at the outset of a project, which is based on the expected cost of overhead output for a certain reporting period.
This rate is often used to make book closure quicker as it eliminates estimation of real overhead costs as part of the closing process at the end of the period. Nevertheless, at least at the end of every fiscal year, the disparity between the real and expected overhead sums must be reconciled.
The predetermined rate is derived by calculation as follows:
Estimated amount of manufacturing overhead to be incurred in the period ÷ Estimated allocation base for the period
