Answer:
Option 3: $12 down with equal payments of $5 for 12 months
Explanation:
In option 1 :
The cost is $ 88,
In option 2 :
Down payment = $ 5,
Weekly payment = $ 8,
Number of weeks = 10,
So, the total cost = 5 + 8 × 10 = 5 + 80 = $ 85,
In option 3 :
Down payment = $ 12,
Monthly payment = $ 5,
Number of months = 12,
So, the total cost = 12 + 5 × 12 = 12 + 60 = $ 72,
In option 4 :
Down payment = $ 20,
Monthly payment = $ 20,
Number of months = 12,
So, the total cost = 12 + 20 × 12 = 12 + 240= $ 252
∵ 72 < 85 < 88 < 252
Hence, option 3 is better.
Answer:
$2,400
Explanation:
The computation of the depreciation expense under the activity-based depreciation method is shown below:
= (Original cost - residual value) ÷ (estimated production units)
= ($12,000 - $4,000) ÷ (20,000 units)
= ($8,000) ÷ (20,000 units)
= $0.4 per unit
Now for the first year, it would be
= Production units in first year × depreciation per unit
= 6,000 units × $0.4
= $2,400
Answer:
Explanation:
First, we need to find current stock price, which equals to Next year dividend / (required rate of return - growth rate)
=4 / (0.08 - 0.04)
= $4 / 0.04 = $100
Then we can apply the found current stock price to find present value of growth opportunities
Present value of growth opportunities =current stock price - [forcasted Earning per share / required rate of return]
= $100 - ($4 / 0.08)
=$100 - $50
= $50
Answer:
The first five terms of the sequence are:
First year: $3270.00
Second year: $3564.30
Third year: $3885.09
Fourth year: $4234.75
Fifth year: $4615.87
Explanation:
When we're dealing with compound interest rates we're dealing with interests being re-invested into the original investment. This means that the new interests of one period will bear interests in the next period. This can be simply calculated using the compound interest formula.
The formula for compound interest rates is 
Where:
<em>P</em> is the principal amount being invested,
<em>i</em> is the interest rate,
<em>n</em> is the number of years.
So for the first year we replace in the formula with the given values:
3000 × 
= $3270
And for the rest of the years we only need to modify the value of <em>n</em>.
For the second year we'd have:
3000 × 
= $3564.3
And so on.
