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4 years ago

What is the present value of $500 due in 2 years at a discount rate of 3%.

1 answer:

7 0

P=present value
F=future value=500
n=number of years=2
i=annual interest rate=3%

We have
F=P(1+i)^n
=>
P=F/(1+i)^n
=500/(1.03^2)
= 471.30 to the nearest cent

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A company has employed two workers A and B whose productivities are 20 units and 15 units respectively. The wage for A is K12 wh

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4 years ago

A customer sells short 100 shares of DEF stock at $82 per share. The stock falls to $71, at which point the customer writes 1 DE

Hatshy [7]

Answer:

16 points

Explanation:

Customer sold stock short for $82 per share

Then, customer sold Sept 70 at $4

If short put is then exercised, the customer is obligated to buy the shares back at $70.

Net cost of the customer is $66 per share for the stock, therefore

Customer gains = 82 sale proceeds - 66 cost basis = 16 points.

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4 years ago

Karl runs a store that sells small and large space heaters. The large heaters sell for $250 each with unit variable costs of $12

umka2103 [35]

Answer: Karl must sell 1350 small heaters and 450 large heaters to break even.

We follow these steps to arrive at the answer:

No. Small Large Total

1 Selling Price per unit 80 250

2 Variable Cost per unit 30 120

3 Number of units sold 2100 700 2800

4 Sales mix 3 1

5 Total sales (1*3) 168000 175000

6 Total Variable Cost (2*3) 63000 84000

7 Contribution Margin (5-6) 105000 91000 196000

Next we compute the Weighted Average Contribution Margin as follows:

$\mathbf{WACM per unit = \frac{Total Contribution Margin}{Total number of units sold}}$

$\mathbf{WACM per unit= \frac{196000}{2800} = 70}$

Now, Break even point (BEP) is computed as

$\mathbf{BEP = \frac{Total Fixed Costs}{WACM per unit}}$

$\mathbf{BEP = \frac{126000}{70} = 1800 units}$

Since the large and small heaters are sold in the 3:1 ratio, we can find the number of large and small heaters to be sold in order to achieve the break even point at 1800 units.

$No. of small heaters = BEP * \frac{3}{4}$

$No. of small heaters = 1800 * \frac{3}{4} = 1350 units$

$No. of large heaters = BEP * \frac{1}{4}$

$No. of large heaters = 1800 * \frac{1}{4} = 450 units$

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3 years ago

Assume Brandon can buy either 1 DVD for $20 or 3 CDs for $25. What is the opportunity cost if he decides to buy 3 CDs? Select th

Tom [10]

Answer:

The opportunity cost of buying 3 CDs is the lost opportunity to buy 1 DVD

Explanation:

Opportunity cost is the cost of alternative forgone.It is cost of the item not purchased due the current buying decision.

It is also applicable to a business division selling to another division within the company.The cost of such internal sale is viewed as the variable cost of the product plus the contribution forgone from not selling to external party.This is most likely the case when the selling division does not have a spare capacity with which it can fulfill internal sale request.

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4 years ago

On January 1 of this year, Trucks R Us Corporation issued bonds with a face value of $ 2,000,000 and a coupon rate of 10 percent

Anestetic [448]

Bonds Payable amount reflected in balance sheet = $2192890

Face Value = $2000000

Coupon Rate = 10%

Maturity Period = 10 years

Number of compounding = 2

Interest = $2000000 * 10% * 6/12 = $100000

Period = 2 * 10 = 20

Maturity Value = Face Value = $2000000

Market Interest Rate semiannually = 0.085 / 2 = 0.0425

Market Value = Present Value of Future Cash Flows

= PV of Interest + PV of maturity value

= (Interest * PVAF (4.25%, 20)) + (Maturity Value * PVIF (4.25%, 20))

= (100000 * 13.29437) + (2000000 * 0.434989)

= $1329437 + $869978

= $2199415

Since market value is greater than face value, we can say that bonds are issued at a premium.

Premium = $2199415 - $2000000 = $199415

Journal Entry to record the issuance of bonds:

Cash a/c Dr $2199415

To Bonds Payable a/c $2000000

To Premium on the issue of bonds $199415

Bonds Payable amount is a liability account that carries the quantity owed to bondholders by way of the company. This account usually seems in the lengthy-term liabilities section of the stability sheet, on account that bonds usually mature in more than one year.

Learn more about Bonds Payable amount here: brainly.com/question/7158291

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2 years ago