Answer:
a. $12,000
b. $32,000
c. $17,000
Explanation:
The computations are shown below:
a. Net income = (Income tax paid ÷ Tax rate) – Income tax paid
Net income = ($3,000 ÷ 20%) - $3,000
= $12,000
b. Revenues = Cost of goods sold + Income tax paid + Administration expense + Interest paid + Depreciation + Net income
= $9,000 + $3,000 + $4,000 + $2,000 + $2,000 + $12,000
= $32,000
3. EBIT = Net income + Interest expense + Taxes
= $12,000 + $2,000 + $3,000
= $17,000
The opportunity cost of 1 desktop computer is 1/2 of a laptop. The opportunity cost is the amount of time and money spent learning value that could have been used elsewhere.
A farmer decides to plant wheat; the opportunity cost is the value of planting a different crop or using the resources in another way (land and farm equipment). Instead of driving to work, a commuter takes the train.
When considering multiple investments or business avenues, opportunity cost is the potential gain lost by choosing a different course of action. The value of what you lose when you choose between two or more alternatives is known as opportunity cost.
To learn more about opportunity cost, click here.
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Answer:
Arbitrage opportunity may exists as the ZCBs selling at different price at same time due to change in their YTM .
The PV of 100 face value zcb with different ytm are different , in this case.
for one year maturity with face value 100 current price = fv/ pv at 8% = 92.59
for Two year maturity with face value 100 current price = fv / Pv at 9% for two years = 84.167 , if the bond holder sell the bond after 1 year only, the price = 91.74 .
a) The arbitrage opportunity exist with buy two bond with face value 100 with maturity of 1 year and face value 110 with maturity of 2 years.
b) profit 0.01 , as difference between PV of both bond at their YTM rate.
Answer:
Ans. He must save during each of the following 10 years, at the end of each year $32,452.
Explanation:
Hi, in order to find the amount of money that he should have in ten years so he can receive an annual payment of $65,156 for 25 more years (24 payments), we need to bring to present value all 24 payments to year 10. Let me show you the formula.
Where:
A= $65,156
n= 24
r= 0.08
Therefore the present value in year 10 is:
So that is our present value in year 10, or to put it in other words, our future value (if we look at it from year 0). Now we need to find the annuity (amount to save) that with account for $686,012, plus that $100,000 that he already has saved.
Every should look like this.
And we solve this equation for "A".
Best of luck.
Answer:
Variable expenses = $50,000
Explanation:
Given:
Sales price = 50,000 x $10 = $500,000
Fixed costs = $350,000
Net income = $100,000
Find:
Variable expenses
Computation:
Variable expenses = Sales price - Fixed costs - Net income
Variable expenses = $500,000 - $350,000 - $100,000
Variable expenses = $50,000
