Answer:
Rate of return is 2.52%
Explanation:
Investment in 1925 = $10,000
Portfolio value in 2000 = $64,402.23
Number of years = 2000-1925 = 75 years
Rate of return = ?
Using following formula to calculate rate of return.
A = P x ( 1 + r )^n
64,402.23 = 10,000 x ( 1 + r )^75
64,402.23 / 10,000 = ( 1 + r )^75
6.440223 = ( 1 + r )^75
1.02515 = 1 + r
r = 1.02515 - 1
r = 0.02515
r = 2.52%
Answer:
Revenue and spending variance is Unfavourable
Activity variance is favourable
Explanation:
We need to determine Revenue and Spending Variance and Activity Variance.
Revenue and Spending Variance = difference between actual result and flexible budget. The above variance may be favourable or unfavorable or none
In the case of revenue, if the actual result figure is higher than the flexible budget, the revenue and expenditure variance is favorable and vice versa.
In case of expenses, if actual result figure is higher than flexible budget the revenue and spending variance is unfavorable and vice a versa.
F is for Favourable
U is for Unfavourable
N is for None
Activity Variance = difference between flexible budget and planning budget . The above variance may be favourable or unfavorable or none
Actual Result Revenue and Spending Variance Flexible Budget Activity Variance Planning Budget
Flights (q) 55 55 53
Revenue ($350.00q) $16,200 $3,050 U $19,250 $700 F $18,550
Expenses:
Wages and salaries ($3,700 $86.00q) $8,398 $32 U $8,430 $172 U $8,258
Fuel ($33q) $1,979 $164 U $1,815 $66 U $1,749
Airport fees ($870 $32.00q) $2,510 $120 F $2,630 $64 U $2,566
Aircraft Depreciation ($9q) $495 $0 N $495 $18 U $477
Office expenses ($230 $1.00q) $453 $168 U $285 $2 U $283
Total Expenses $13,835 $180 U $13,655 $322 U $13,333
Net Operating Income $2,365 $2,870 U $5,595 $378 F $5,217
NOTE; Please see attached file.
