The correct answer is D. Adjusted balance method.
Adjusted balance method in termed as the method which is being used by finance companies and banks to calculate for finance charges or interest income. which is known to be associated with credit card account or bank account.
The finance waits to aggregate all the adjustments and also calculates finance charges or interest rates by the end of billing period which will depend with the ending balance.
Answer: e. 8.61%
Explanation:
This is a perpetual bond so the price is calculable by;
Price = Coupon / Yield to Maturity
Coupon = 7.75% * 1,000
= $77.50
900 = 77.50/ YTM
900 * YTM = 77.50
YTM = 77.50/900
= 8.61%
Answer: $324,000
Explanation:
Cedar Corp. paid $432,000 for a year in advance. According to the Accrual principle in Accounting, expenses are to be recorded only when incurred.
The rent will therefore have to be apportioned to the months that it has paid for in the current period.
Rent for year = $432,000
Rent for month = 432,000/12 = $36,000
April - December = 9 months
Rent for the year = 9 * 36,000
= $324,000
Note; <em>Question is about Rent expense which is how much Cedar Corp has paid not about how much they have received. </em>
Answer:
The correct answer is option B.
Explanation:
In 2017, Lynx earned an accounting profit of $3 million.
Lynx's production facilities might have also been used to produce components for mobile phones, which would have generated $2 million in revenues and saved the company $500,000 in production costs.
The accounting profit involves only explicit costs. While economic profit includes both explicit as well as implicit cost.
Here, the implicit cost is the opportunity cost of producing toys components. Lynx could have earned greater profit if it produced components for mobile phone and also could have saved cost of production.
Economic profit
= accounting profit - implicit cost
= $3 million - ($2 million + $500,000)
= $3 million - $2.5 million
= $500,000
So, Lynx had an economic profit of $500,000.
