Answer:
1) the payment over time ( $2833.39 )
2) the payment over time ( $2759.11 )
Explanation:
We get the lump sum today of $2750 which is exactly the value of this amount today and there is no need to discount this amount. We will compare this amount with the present value of the cash flows we will receive over time. If the present value of over time cash flows is more than lump sum payment, we will choose over time cash flows and vice versa.
1) The present at 6% for over time cash flows is,
- PV = 1000 + 1000/1.06 + 1000/1.06^2 = $2833.392
- As 2833.392 is more than 2750, we will choose payment over time.
2) The present at 9% for over time cash flows is,
- PV = 1000 + 1000/1.09 + 1000/1.09^2 = $2759.11
- As 2759.11 is more than 2750, we will choose payment over time.
The type of error committed by Mr Imran is the error of principle.
<u>Explanation:</u>
An error of principle is a mistake done in the accounting. Because of this mistake, the entry is done in the wrong account. As a result of this, there is violation in the fundamental principles of Accounting. The meaning of this principle is that the value recorded was correct but the account in which it was recorded was not correct.
In the example given in the question, as a result of the error of principle, there is understatement of the assets of the firm of Mr Hamid because the value that was to be recorded in the assets account is recorded somewhere else, in the account of charges of plant and machinery.
The answer to this question is Equatorial;Axial
The equatorial position refers to the positon that take place around the center of the plane, meanwhile, axial position refers to the postion that take place on a certain degree relative to the equatorial position. Axial position will always be more flexible and stable since it does not have to necessarily located in middle
Answer: $6000
Explanation:
The amount that is deducted in arriving at adjusted gross income will be calculated thus:
Short term capital gain = $1000
Less: Short term capital loss = $11000
Net short term loss = -$10000
Long term capital gain = $10000
Less: Long term capital loss = $6000
Net long term gain = $4000
Then, the amount that is deducted in arriving at adjusted gross income will be:
= $10000 - $4000 = $6000