The waiting time at which 10 percent of the people would continue to hold is given as 2.3
<h3>How to solve for the waiting time</h3>
We have to solve for X ~ Exponential(λ).
then E(X) = 1/λ = 3,
= 0.3333
Remember that the cumulative distribution function of X is F(x) = 1 - e^(-λx). ; x is equal to the time in over case
For 10 percent of the people we would have a probability of
10/100 = 0.1
we are to find
P(X ≤ t)
= 1 - e^(0.3333)(t) = 0.1
Our concern is the value of t
Then we take the like terms
1-0.1 = e^(0.3333)(t)
1/0.9 = e^(0.3333)(t)
t = 3 * ln(1/0.9)
= 0.3157
Answer:The cost of capital that will make both investments equal is 17.045%
Explanation:
Investment A
$1.5 million will be received in perpetuity we can there use perpetuity formula to Value investment A.
Value of Investment A = 1500 000/r
Investment B
$1.2 Million will be received in Investment B with a growth rate of 3% will then use Gordon's growth rate model to value investment B.
Value of investment B = (1200 000 x (1+0.03))/(r - 0.03)
Value of investment B = 1236000/(r - 0.03)
1500 000/r = 1236000/(r - 0.03)
1236000(r) = 1500000(r - 0.03)
(r - 0.03) = 1236000( r)/1500000
r - 0.03 = 0.824r
r - 0.824r = 0.03 = 0.176r = 0.03
r = 0.03/0.176 = 0.170454545
R = 17.045%
The cost of capital that will make both investments to be equal is 17.045%
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Hope these help!!!
Answer:
A. June 3
Dr Accounts Receivable—Chester $3,800
Cr Sales Revenue $3,800
June 12
Dr Cash $3,648
Dr Sales Discounts $152
Cr Accounts Receivable—Chester $3,800
B. June 3
Dr Accounts Receivable—Chester $3,648
Cr Sales Revenue $3,648
June 12
Dr Cash $3,648
Cr Accounts Receivable—Chester $3,648
Explanation:
A. Preparation of the journal entries on the Pronghorn Company books to record Sales and receivables are entered at gross selling price.
June 3
Dr Accounts Receivable—Chester $3,800
Cr Sales Revenue $3,800
June 12
Dr Cash $3,648
($3,800-$152)
Dr Sales Discounts ($3,800 X 4%) $152
Cr Accounts Receivable—Chester $3,800
B. Preparation of the journal entries on the Pronghorn Company books to record Sales and receivables are entered at gross selling price Sales and receivables are entered at net of cash discounts.
June 3
Dr Accounts Receivable—Chester $3,648
Cr Sales Revenue ($3,800 X 96%) $3,648
June 12
Dr Cash $3,648
Cr Accounts Receivable—Chester $3,648
