Answer:
The Total amount shown in income statement as income from this investment is $ 27,200.00
Explanation:
In order to calculate the effect of this investment on the 2021 income statement we would have to make the following calculation:
effect of this investment on the 2021 income statement= Dividend received by Howdy Doody corporation+Increase in Fair value of Stock credited to income statement
Dividend received by Howdy Doody corporation=$60,000 x 12%= $7,200.00
Increase in Fair value of Stock credited to income statement=$70,000-$50,000=$ 20,000.00
Therefore, effect of this investment on the 2021 income statement= $7,200.00
+$ 20,000.00
=$27,200
The Total amount shown in income statement as income from this investment is $ 27,200.00
Answer: Sky's effective interest rate on this loan is 8.39%.
In this question, we assume that interest is compounded annually.
Since Sky issues a non-interest bearing note, Star Finance will deduct 7 months' interest at 8% on the Face Value of the loan and pay the rest as principal to Sky.
Face value of the note $16 million
Discount Rate p.a 8%
Tenure of the note 7 months
![Discount on Note = Face Value * Discount Rate * \frac{Tenure in months}{Months in a year}](https://tex.z-dn.net/?f=Discount%20on%20Note%20%3D%20Face%20Value%20%2A%20Discount%20Rate%20%2A%20%5Cfrac%7BTenure%20in%20months%7D%7BMonths%20in%20a%20year%7D)
![Discount on Note = 16 * 0.08 * \frac{7}{12}](https://tex.z-dn.net/?f=Discount%20on%20Note%20%3D%2016%20%2A%200.08%20%2A%20%5Cfrac%7B7%7D%7B12%7D)
![Discount on Note = 0.746666667million](https://tex.z-dn.net/?f=Discount%20on%20Note%20%3D%200.746666667million)
[tex]Loan Amount received by Sky = Face Value - Discount on note[/tex]
![Loan Amount received by Sky = 16 - 0.746666667](https://tex.z-dn.net/?f=Loan%20Amount%20received%20by%20Sky%20%3D%2016%20-%200.746666667)
![Loan Amount received by Sky = 15.25333333 million](https://tex.z-dn.net/?f=Loan%20Amount%20received%20by%20Sky%20%3D%2015.25333333%20million)
So, Sky pays an interest of 0.746666667 on a sum of 15.25333333 for 7 months. This works out to a seven month interest of:
![Seven month Interest Rate = \frac{Interest}{Loan amount}](https://tex.z-dn.net/?f=Seven%20month%20Interest%20Rate%20%3D%20%5Cfrac%7BInterest%7D%7BLoan%20amount%7D)
![Seven month Interest Rate = \frac{0.746666667}{15.25333333}](https://tex.z-dn.net/?f=Seven%20month%20Interest%20Rate%20%3D%20%5Cfrac%7B0.746666667%7D%7B15.25333333%7D)
![Seven month Interest Rate = 0.048951049](https://tex.z-dn.net/?f=Seven%20month%20Interest%20Rate%20%3D%200.048951049)
From this we can work out the effective interest rate for Sky as follows:
![Sky's Effective Interest Rate = Seven month interest rate * \frac{12}{7}](https://tex.z-dn.net/?f=Sky%27s%20Effective%20Interest%20Rate%20%3D%20Seven%20month%20interest%20rate%20%2A%20%5Cfrac%7B12%7D%7B7%7D)
![Sky's Effective Interest Rate = 0.048951049* \frac{12}{7}](https://tex.z-dn.net/?f=Sky%27s%20Effective%20Interest%20Rate%20%3D%200.048951049%2A%20%5Cfrac%7B12%7D%7B7%7D)
![Sky's Effective Interest Rate = 0.083916084](https://tex.z-dn.net/?f=Sky%27s%20Effective%20Interest%20Rate%20%3D%200.083916084)
365000 - 165000 = $215,000
This gives you the Orlando sales.
215000 x 1.27 (27%) gives you the contribution margin for Orlando store
Answer is : $273,050
Why or why not they should agree with the said issue at hand.
Lobbyists give the politicians a kind of reassuring push in a certain direction when having to decide on the issue.
Answer:
The new real interest rate is 15%
and the lender was hurt.
O 15%; lender
Explanation:
a) Data and Calculations:
Fixed nominal interest rate = 13%
Real interest rate for the bank's profit margin = 10%
Inflation rate = 3% (13% - 10%)
Unanticipated inflation rate = 7%
Nominal interest rate = 17% (10% + 7%)
But the bank could not increase its fixed nominal interest rate to match the nominal interest rate.