Answer:
the answer for the first question is $166667.
the answer for the second question is $210526
the answer for the third question is An inverse.
Explanation:
given information that i will invest in a $10000 scholarship that will pay forever.
the interest rate charged is 6.00% per annum therefore this is a perpetuity present value problem where there is streams of income forever therefore we use the formula :
Pv of perpetuity= Cf/r
where Cr is the cash flows payed by the single investment forever in this case $10000 then r is the interest rate of the investment amount which is 6% in this case.
Pv of Perpetuity= $10000/6%
=$166667 therefore i must invest this amount to get the scholarship running with streams of $10000 forever.
in the second problem if now the interest rate is changed from 6% to 4.75% then the amount to be invested would be :
Pv of perpetuity = $10000/4.75%
=$210526 therefore this is the amount to be invested for a forever $10000 stream of incomes for a scholarship.
the relationship is indirect cause as the interest rate decreases the present value of the perpetuity that must be invested increases.
Business formation is also known as: a business attraction
Answer:
Net operating cash flow = $189,250
Explanation:
Particulars Amount$
Net income 250,000
Add:depreciation expense 9,500
Add:loss on sale of asset 1,250
Add:increase in salary payable 19,500
Less:increase in prepaid rent (27,500)
Add:increase in AP 29,500
Less:increase in inventory <u>(93,000)</u>
Net operating cash flow <u>$189,250</u>
The percentage of fixed costs in a company's cost structure.
Answer:
The journal entries are as follows:
(i) (a) Under allowance for doubtful account method:
Allowance for doubtful accounts A/c Dr. $13,300
To accounts receivable $13,300
(To record the bad debts written off)
(b) Under direct write off method:
Bad debt expenses A/c Dr. $13,300
To accounts receivable $13,300
(To record the Bad debts written off)
(ii) Bad debts expenses A/c Dr. $15,300
To Allowance for doubtful accounts $15,300
(To record the bad debt expense)
