Answer:
42.45 years
Explanation:
Discounting is the means by which the today's value of an amount in the future is computed. Compounding is the process by which the future value of a present amount is determined. In other words, the present value of $1 tomorrow is determined by discounting while the future value of $1 tomorrow is determined by compounding.
Where
Fv = Pv(1 + r)^n
Fv is the future value
Pv is the present value
r is rate
n is time
215000 = 36000(1 + 0.043)^n
215/36 = 1.043^n
Taking the log of both sides
log (215/36) = log 1.043^n
n = log (215/36) / log 1.043
n = 42.45 years
It will take 42.45 years to have enough to buy the car
Answer:
The net service revenue amounts to $686,000
Explanation:
The formula to compute the net service revenue is as:
Net Service Revenue = (Price - Trade discount) - Discount of 2%
where
Price is $800,000
Trade discount is $100,000
And the discount of 2%
Therefore,
NSR = ($800,000 - $100,000) -Discount of 2%
= $700,000 - 2% 0f $700,000
= $700,000 - $14,000
= $686,000
NOTE: The customer paid within 10 days so the customer is allowed for 2% discount on the amount.
Answer:
Cost-volume-profit [CVP] Analysis
The cost-volume-profit analysis model assumes that the total fixed cost, the variable cost per unit, and the selling price per unit remain constant within the relevant range.
It is very difficult for a company to remain in the relevant range, where the assumptions will be obtained. Market forces, including the dynamics of competition change the underlying assumptions. For example, a company may become more efficient in its operations, thereby reducing its variable cost per unit. The total fixed cost may also change when the company increases its activity levels.
However, these limitations do not make the model less useful. It can be relied on to make short-run profit and pricing decisions.
Explanation:
The management of a business finds the CVP model useful in making important management decisions, especially decisions that relate to budgeting of production and sales, cost control, and profit planning. Management uses the CVP model to determine the break-even point in both units and sales dollars. Overall, management relies on the model to select its competitive products.
Answer:
Depreciation Expense for 2018; $10,528.57
Explanation:
On January 2, 2016
machine cost = $100,000
Useful life = 10 years
Annual depreciation = ($100,000 - $6000)/10
= $9,400
By early 2018,
Carrying amount of the machine
= $100,000 - 2($9,400)
= $100,000 - $18,800
= $81,200
Useful life is reassessed to 7 years (rather than 8) with a salvage value of $7,500
Annual Depreciation = ($81,200 - $7,500)/7
= $73,700/7
= $10,528.57
Depreciation Expense for 2018; $10,528.57
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