sally borrowed $1000 from her friend monique two years ago. their arrangement required sally to repay $250 each year for the subsequent four years. Today with two paymewnts remaining on the loan, Sally offers to repay the loan with a single payment of $475. Assuming no change in interest rates throughout the entire time, should monique accept the signle $475 payment today, why or why not

Answers

Answer 1

Answer:

a

Explanation:

Here are the options to this question :

A. yes, 475 is more than the PV of the two remaining payments

B. More information is needed to decide

C. Monique is indifferent between the options, the PVs are equivalent

D. No, the PV of the remaining two payments is more than 475

We have to determine the present value of the remaining two payments and compare the options

Present value is the sum of discounted cash flows

Present value can be calculated using a financial calculator

Cash flow in year 1 = 0

Cash flow in year 2 = 0

Cash flow in year 3 = 250

Cash flow in year 4 = 250

I = 2%

PV = $466.54

$475  is greater than $466.54. Therefore, she should accept the single $475 payment

To find the PV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  


Related Questions

Match each type of adjusting entry with its definition.
Deferred revenue
Accrued expenses
Prepaid expenses
Accrued revenue
Match each of the options above to the items below.
Receive cash in the current period that will be recorded as a revenue in a future period.
Record an expense in the current period that will be paid in cash in a future period.
Record a revenue in the current period that will be collected in cash in a future period.
Pay cash (or have an obligation to pay cash) in the current period that will be recorded as an expense in a future period.

Answers

Answer and Explanation:

The matching is as follows:

1. Deferred revenue - the cash would be received in the present period and the same would be reported as a revenue for the future period

2. Accrued expense - It would be recorded as an expense for a present period but the cash would be paid in the future

3. Prepaid expense - The cash is paid or the obligation is to the pay the cash in the present period but the expense would be recorded in the future period

4. Accrued revenue - the revenue is recorded in the present period but the cash would be collected in a future period

From a salesperson's perspective, the characteristics of a good manager: A. vary from manager to manager. B. conflict with the characteristics managers list as being traits of a good manager. C. are a rarity in modern sales organizations. D. include friendship and loyalty E. include flexibility and a team orientation.

Answers

Answer:

E. include flexibility and a team orientation.

Explanation:

Sales management is the process that maintains customers sales by planning, direction and control of the sales process.

It involves motivation, supervising, delegation, and equipping of the sales force.

This is a people oriented career and therefore requires flexibility and a team orientation. So the team is able to adapt to new strategies aimed at improving the sales process.

Steinberg Company produces commercial printers. One is the regular model, a basic model that is designed to copy and print in black and white. Another model, the deluxe model, is a color printer-scanner-copier. For the coming year, Steinberg expects to sell 100,000 regular models and 20,000 deluxe models. A segmented income statement for the two products is as follows:

Regular Model Deluxe Model Total

Sales $12,000,000 $10,720,000 $22,720,000
Less: Variable costs 7,200,000 6,432,000 13,632,000
Contribution margin $4,800,000 $4,288,000 $9,088,000
Less: Direct fixed costs 1,200,000 960,000 2,160,000
Segment margin $3,600,000 $3,328,000 $6,928,000
Less: Common fixed costs 1,702,400
Operating income $5,225,600

Required:
a. Compute the number of regular models and deluxe models that must be sold to break even.
b. Using information only from the total column of the income statement, compute the sales revenue that must be generated for the company to break even.

Answers

Answer:

Results are below.

Explanation:

First, we need to calculate the sales proportion of each product:

Regular= 12,000,000/22,720,000= 0.53

Deluxe= 10,720,000/22,720,000= 0.47

Now, we will determine the break-even point for the company as a whole:

Break-even point (units)= Total fixed costs / Weighted average contribution margin

Total fixed costs= 2,160,000 + 1,702,400= $3,862,400

Unitary contribution margin:

Regular= 4,800,000/100,000= $48

Delux= 4,288,000/20,000= $214.4

Weighted average contribution margin= (0.53*48) + (0.47*214.4)

Weighted average contribution margin= $128.35

Break-even point (units)= 3,862,400/128.35

Break-even point (units)= 30,093

For each product:

Regular= 0.53*30,093= 15,949

Deluxe= 0.47*30,093= 14,144

Finally, we need to calculate the break-even point in dollars for the whole company:

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 3,862,400/ (9,088,000/22,720,000)

Break-even point (dollars)= 3,862,400/0.4

Break-even point (dollars)= $9,206,000

Lucas Industries uses departmental overhead rates to allocate its manufacturing overhead to jobs. The company has two departments: Assembly and Sanding. The Assembly Department uses a departmental overhead rate of $50 per machine hour, while the Sanding Department uses a departmental overhead rate of $15 per direct labor hour. Job 603 used the following direct labor hours and machine hours in the two departments: Assembly Actual results Direct labor hours used Machine hours used The cost for direct labor is $30 per direct labor hour and the cost of the direct materials used by Job 603 is $1,400. How much manufacturing ovehead would be allocated to Job 603 using the departmental overhead rates?
A. $610
B. $330
C. $580
D. $740

Answers

Answer:

uush no entendí jajaja

Explanation:

que lastima

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