Answer:
I can borrow $24,000
Explanation:
A fix Payment for a specified period of time is called annuity. The discounting of these payment on a specified rate is known as present value of annuity.
The amount of loan can be calculated as follow
PV of annuity = P x [ ( 1- ( 1+ r )^-n ) / r ]
Amount of Loan = $632 x [ ( 1- ( 1 + 1% )^-48 ) / 1% ]
Amount of Loan = $632 x [ ( 1- ( 1.01 )^-48 ) / 0.01 ]
Amount of Loan = $24,000
r = 7.17%
Interest rate is 7.17%
Answer:
B. just-in-time
Explanation:
Just in time (JIT) is an inventory management approach that is used by companies that want to reduce their inventory costs and they purchase their materials in smaller quantities whenever their productive system needs them. The goal is to keep the lowest possible inventory levels.
After recording the transaction in journal you must record it on General Ledger.
Answer:
The answer and procedures of the exercise are attached in the following archives.
Explanation:
Consider this explanation too
The IRR is the project’s expected rate of return, assuming that intermediate cash flows also earn the IRR. If this return exceeds the cost of the capital invested in the project, the excess value goes to the firm’s shareholders. Therefore, independent projects whose IRR is greater than the WACC should be accepted.
Therefore in this case WACC of the project is 7% and IRR of the project is 1.86% which is less than WACC of the project. Hence the firm reject the project delta.
Calculation of IRR is based on Cash inflows and outflows for the number of years so that increase in cost of capital will not affect IRR.
Answer:
$47,500
Explanation:
Since the payment is made monthly in advance for the period of 5 years, therefore the present value of annuity formula shall be used for the purpose of calculating the Present value of lease, which is given as follow:
Present value of annuity=R+R[(1-(1+i)^-n)/i]
In the given question
R=Rent per month paid in advance=$1,000
i=interest compounded monthly=10%/12=0.83%
n=number of payments involved=(12*5)-1=59
Present value of annuity=1,000+1,000[(1-(1+0.83%)^-59)/0.83%]
=$47,500
