Question 3 of 10

The johnsons have accumulated a nest egg of $50,000 that they intend to use as a down payment toward the purchase of a new house

algol13

Hell no to the no no no

6 0

4 years ago

Las Paletas Corporation has two different bonds currently outstanding. Bond M has a face value of $20,000 and matures in 20 year

Margarita [4]

Answer:

Bond M= $21,914.32.

Bond N= $6,131.14

Explanation:The price of any bond (or financial instrument) is the PV of the future cash flows. Even though Bond M makes different coupons payments,to find the price of the bond,we just find PV for the cash flows

5 0

3 years ago

Which of the following statements best reflects a price-taking firm? a The firm has an incentive to charge less than the market

MatroZZZ [7]

Answer:

b

Explanation:

A price taking firm is a firm that must sell at the price determined by the forces of demand and supply. This is typical of firms that in industries that sell identical products.

If the firm charges a price higher than equilibrium price, customers would go to other suppliers and the firm would sell known of its product.

There would be no incentive for a firm to sell below equilibrium price because it would be earning losses.

An example of an industry characterised by price taking firms are perfectly competitive industries.

For example, a farmer selling oranges is an example of a price taking firm

5 0

3 years ago

You are planning to save for retirement over the next 30 years. To do this, you will invest $750 per month in a stock account an

Alex

Answer:

The withdrawals will be of $ 11,379.014 per month

Explanation:

Future value of the annuities:

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 750.00

time 360(30 years x 12 monhs per year)

rate 0.008333333 (10% / 12 months)

$750 \times \frac{1-(1+0.00833)^{-360} }{0.008333} = PV\\$

PV $1,695,365.9436

$C \times \frac{(1+r)^{time} -1}{rate} = PV\\$

C 250.00

time 360 (30 years x 12 monhs per year)

rate 0.005 (6% / 12 months)

$250 \times \frac{(1+0.005)^{360} -1}{0.005} = PV\\$

PV $251,128.7606

Total 1,695,365.84 + 251,128.76 = 1.946.494,6‬

and from here we withdraw for 25 years:

$PV \div \frac{1-(1+r)^{-time} }{rate} = C\\$

PV 1,946,495

time 300 (25 years x 12 months)

rate 0.004166667 (5% / 12 months)

$1946494.6 \div \frac{1-(1+0.004167)^{-300} }{0.004167} = C\\$

C $ 11,379.014

6 0

3 years ago

Sally is in the business of purchasing accounts receivable. Last year, Sally purchased an account receivable with a face value o

marusya05 [52]

Answer:

Sally’s basis in the Account Receivable is $60,000

She has a bad debt deduction of $0. There is no Bad debt deduction for Sally. Rather she made a profit on the transaction.

Explanation:

The Account Receivable can be defined as a Debt Instruments. Debt instruments in accounting are valued at Lower of Cost or Net Realizable Value.

Cost is the amount of cash or its equivalent that was expended to obtain an asset. The cost of this Account Receivable therefore is 60,000

Net realizable value (NRV) is the value that can be realized from the sale of an asset. Net Realizable value of the Account Receivable therefore is 80,000.

Therefore the value to be utilized as the value of the Account Receivable 60,000.

Below is the accounting entries to record the transaction and recognized profit.

For the Face Value of the Debt

Debit: Account Receivable Account(Debtors) 60,000.00

Credit: Account Receivable Purchase Account 60,000.00

For the payment of the A/R

Debit: Account Receivable Purchase Account 60,000.00

Credit: Bank 60,000.00

For the settlement received on the A/R

Debit: Bank 65,000.00

Credit: Account Receivable Account(Debtors) 60,000.00

Credit: Profit & Loss 5,000.00

8 0

3 years ago