Oriole Company has issued three different bonds during 2022. Interest is payable annually on each of these bonds. 1. On January 1, 2022, 1,000, 8%, 5-year, $1,000 bonds dated January 1, 2022, were issued at face value. 2. On July 1, $854,000, 9%, 5-year bonds dated July 1, 2022, were issued at 101. 3. On September 1, $281,000, 7%, 5-year bonds dated September 1, 2022, were issued at 99. Prepare the journal entry to record each bond transaction at the date of issuance.

Answers

Answer 1

Answer:

Transaction 1

Debit : Cash  ($1,000 x 1,000) $1,000,000

Credit : Bond Payable  $1,000,000

Transaction 2

Debit : Cash  ($854,000 x 101.30%) $865,102

Credit : Bond Payable  $865,102

Transaction 3

Debit : Cash  ($281,000 x 99%) $278,190

Credit : Bond Payable  $278,190

Explanation:

On each issuance date recognize a cash inflow and a liability - Bond Payable to the extent of the amount paid on issue.


Related Questions

Ingraham Inc. currently has $820,000 in accounts receivable, and its days sales outstanding (DSO) is 54 days. It wants to reduce its DSO to 35 days by pressuring more of its customers to pay their bills on time. If this policy is adopted, the company's average sales will fall by 15%. What will be the level of accounts receivable following the change? Assume a 365-day year.

Answers

Answer: 451759.29

Explanation:

To solve the question, we need to calculate the current sales. This will be calculated by using the formula:

DSO = (Account receivable × 365) / Sales

54 = 820000 × 365 / Sales

Sales = 820000 × 365 / 54

Sales = 5542593

After the new policy, the expected sales will be:

= 5542593 × (1 - 15%)

= 5542593 × (1 - 0.15)

= 5542593 × 0.85

= 4711204.5

The level of accounts receivable following the change will be:

DSO = (Account receivable × 365) / Sales

35 = Account receivable × 365 / 4711204.5

Account receivable = 35 × 4711204.5 / 365

Account receivable = 451759.29

Each of the following is a main source of web traffic EXCEPT:
banner ads
radio networks
affiliate networks
word of mouth

Answers

Answer:

I think radio networks

Explanation:

why because i never heard them talk about that stuff on the radio sorry if it was wrong

is an unlevered firm with a total market value of $3,900,000 with 60,000 shares of stock outstanding. The firm has expected EBIT of $220,000 if the economy is normal and $280,000 if the economy booms. The firm is considering a $975,000 bond issue with an attached interest rate of 6 percent. The bond proceeds will be used to repurchase shares. Ignore taxes. What will the earnings per share be after the repurchase if the economy booms

Answers

Answer:

Earnings per share= $3.58

Explanation:

Earnings per share(EPS) = Earnings attributable to share/Number of shares

Price per share = $3,900,000/60,000=$65 per share

The units of shares to be re-purchased with debt proceed

= The proceeds from debt/share price

=$975,000/$65= 15,000

The number of shares outstanding after repurchased = 60,000-15,000= 45,000 units

EBIT                                                     220,000

Less interest (6%×975,000)                 (58,500)

Earnings attributable to shares              151,500

Earnings per share                                151,500/45,000 units=$3.58

Earnings per share= $3.58

Market research does not provide enough information for businesses to use in
decision making.
True or False

Answers

Answer:

False because market research is essential for decision making within buisnesses.

False.

Market research provides ample information for business to use. Thats its job.

On January 8, the end of the first weekly pay period of the year, Regis Company's employees earned $21,760 of office salaries and $60,840 of sales salaries. Withholdings from the employees' salaries include FICA Social Security taxes at the rate of 6.2%, FICA Medicare taxes at the rate of 1.45%, $12,860 of federal income taxes, $1,360 of medical insurance deductions, and $900 of union dues. No employee earned more than $7,000 in this first period.

Required:
Calculate the amounts for each of these four taxes of Regis Company.

Answers

Answer:

FICA-Social security = $5,121.20

FICA-Medicare = $1,197.70

FUTA = $495.60

SUTA = $4,130

Explanation:

Note: The four taxes of Regis Company required to be calculated as follows:

FICA-Social security

FICA-Medicare

FUTA

SUTA

Therefore, we have:

Total earnings = Office salaries + Sales salaries = $21,760 + $60,840 = $82,600

Tax = Total earnings * Tax rate ...................... (1)

Using equation (1), we have:

FICA-Social security = $82,600 * 6.20% = $5,121.20

FICA-Medicare = $82,600 * 1.45% = $1,197.70

FUTA = $82,600 * 0.60% = $495.60

SUTA = $82,600 * 5% = $4,130.00

When the quantity of coal supplied is measured in kilograms instead of pounds, the demand for coal becomes

Answers

Answer:

the quantity of coal becomes more elastic

hope this helps you ☺️☺️

Goodwin Technologies, a relatively young company, has been wildly successful but has yet to pay a dividend. An analyst forecasts that Goodwin is likely to pay its first dividend three years from now. She expects Goodwin to pay a $1.25000 dividend at that time (D₃ = $1.25000) and believes that the dividend will grow by 6.50000% for the following two years (D₄ and D₅). However, after the fifth year, she expects Goodwin’s dividend to grow at a constant rate of 3.36000% per year.

Goodwin’s required return is 11.20000%. Fill in the following chart to determine Goodwin’s horizon value at the horizon date (when constant growth begins) and the current intrinsic value. To increase the accuracy of your calculations, do not round your intermediate calculations, but round all final answers to two decimal places.

Term Value
Horizon Value __________
Current Intrinsic value __________

Assuming that the markets are in equilibrium, Goodwin's current expected dividend yield is ___________, and Goodwin's capital gains yield is _______

Answers

Answer:

A. Term Value

Horizon Value $18.69

Current Intrinsic value $13.61

B. Dividend yield 0%

Capital gains yield 11.20%

Explanation:

A. Calculation to determine Horizon Value

Using this formula

Horizon Value = Dividend in Year 6/(Required Return – Growth Rate)

Let plug in the formula

Horizon Value = 1.25(1.0650)^2 (1.0336)/(11.20%-3.36%)

Horizon Value = $18.69

Calculation to determine the Current Intrinsic value Using this formula

Current intrinsic value = 1.25/(1.1120)^3 + 1.25(1.0650)/(1.1120)^4 + 1.25(1.0650)^2/(1.1120)^5 + 18.69/(1.1120)^5

Current intrinsic value = $13.61

B. Calculation to determine Dividend yield

Using this formula

Dividend yield = Expected Dividend next year/Current price

Let plug in the formula

Dividend yield= 0/13.61

Dividend yield= 0%

Calculation to determine Expected Capital Gains Yield using this formula

Expected Capital Gains Yield = Required return - Expected Current Dividend Yield

Let plug in the formula

Expected Capital Gains Yield= 11.20%- 0%

Expected Capital Gains Yield= 11.20%

Therefore:

Term Value

Horizon Value $18.69

Current Intrinsic value $13.61

Therefore Assuming that the markets are in equilibrium, Goodwin's current expected dividend yield is 0% and Goodwin's capital gains yield is 11.20%

Consider two perfectly negatively correlated risky securities A and B. A has an expected rate of return of 12% and a standard deviation of 70%. B has an expected rate of return of 8% and a standard deviation of 40%. The global minimum variance portfolio that can be formed with the two securities will earn _____ rate of return.

Answers

Answer: 9.45%

Explanation:

To solve this question, we need to know the weights of securities A and B and this will be:

Weight of A = STD of B / (STD of A + STD of B)

= 40% / (70% + 40%)

= 40% / 110%

= 0.4/1.1

= 0.3636

Weight of security A = 0.3636

Weight of security B = 1 - 0.3636 = 0.6364

Then, the rate of return of risk free portfolio will be:

= (Return of A × Weight of A) + (Return of B × Weight of B)

= (12% × 0.3636) + (8% × 0.6364)

= 0.043632 + 0.050912

= 0.094544

= 9.45%

Marty, a 16-year-old, contracted with Cream-of-the-Crop Cycles to buy an $8,000 motorcycle. He agreed to make monthly payments until the purchase price plus interest were paid in full. It is three years later and Marty has not disaffirmed the contract and has made regular payments on the cycle since turning 19. Which of the following is correct?
A) The contract is voidable by Marty.
B) The contract is void as soon as it is made.
C) The contract is voidable by Cream-of-the-Crop Cycles.
D) The contract is voidable by either Marty or Cream-of-the-Crop Cycles.

Answers

Answer:

Marty has ratified the contract and is now bound by the terms.

Explanation:

In the given case as we can see that the Marty was minor and as per the act the eligibility to enter into a contract should be in the age of 18 years or above so here the contract should be voidable but after 3 years he would be 19 years and now he would ratified the contract and now bound with the contract terms

Hence, the above represent the answer

When a fast-moving consumer goods (FMCG) company faced bankruptcy, the company decided to encourage its employees to contribute their ideas toward organizational development and growth. The organization also asked its human resource team to assess the employees' levels of commitment toward organizational effectiveness. To improve the FMCG company's organizational performance, it is evident that the company most likely used _____. Group of answer choices

Answers

Answer:

Attitude surveys

Explanation:

Attitude surveys are used by employers to gauge how employees view the company and their role in it.

This type of survey exposes issues like lack of trust, low moral from employees, and dissatisfaction in the workplace.

In this instance the organization asked its human resource team to assess the employees' levels of commitment toward organizational effectiveness.

This will allow the FMCG company know how the bankruptcy challenge is being handled by the employees

Lusk Corporation produces and sells 10,000 units of Product X each month. The selling price of Product X is $40 per unit, and variable expenses are $32 per unit. A study has been made concerning whether Product X should be discontinued. The study shows that $70,000 of the $120,000 in monthly fixed expenses charged to Product X would not be avoidable even if the product was discontinued. If Product X is discontinued, the monthly financial advantage (disadvantage) for the company of eliminating this product should be: rev: 07_07_2020_QC_CS-218335

Answers

Answer: ($30000)

Explanation:

If Product X is discontinued, the monthly financial advantage (disadvantage) for the company of eliminating this product will be calculated thus:

Sales = 10000 × $40 = $40000

Variable expense = 10000 × $32 = $320000

Contribution margin lost = $400000 - $320000 = $80000

Savings in fixed expense = $120000 - $70000 = $50000

Financial disadvantage = Savings in fixed expenses - Contribution margin lost

= $50000 - $80000

= -$30000

Tan Corporation of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Osaka Yokohama Sales $ 3,000,000 $ 9,000,000 Net operating income $ 210,000 $ 720,000 Average operating assets $ 1,000,000 $ 4,000,000 Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover. 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 15%. Compute the residual income for each division.

Answers

Answer:

Return on Investment (ROI)

In terms of margin :

Division Osaka (ROI) = 21.00 %

Division Yokohama (ROI) = 18.75%

In terms of turnover :

Division Osaka (ROI) = 300%

Division Yokohama (ROI) = 225%

Residual Income

Division Osaka  =   $60,000

Division Yokohama  =  $120,000

Explanation:

Return on Investment = Divisional Profit Contribution / Assets Employed in the Division x 100

In terms of margin  :

Division Osaka (ROI) = $ 210,000 / $ 1,000,000 x 100 = 21.00 %

Division Yokohama (ROI) = $ 720,000 / $ 4,000,000 x 100 = 18.75%

In terms of turnover :

Division Osaka (ROI) = $ 3,000,000 / $ 1,000,000 x 100 = 300%

Division Yokohama (ROI) = $ 9,000,000 / $ 4,000,000 x 100 = 225%

Residual Income = Controllable Profit - Cost of Capital Charge on Investment Controllable by Divisional Manager

Division Osaka  = $ 210,000 - $ 1,000,000 x 15% =  $60,000

Division Yokohama  = $ 720,000 - $ 4,000,000 x 15% = $120,000

Prime Bank is offering your company the use of their lockbox services. They estimate that you can reduce your average mail time by 1.5 days and they can save you a combined clearing and processing time of 1 day by putting the checks into the clearing system sooner. Your firm receives 198 checks a day with an average value of $2,300 each. The current T-Bill rate is .011 percent per day. Assume a 365-day year. Prime Bank will charge your firm an annual fee of $27,500 plus $.20 per check. What is the annual net savings from installing this system

Answers

Answer:

$3,756.77

Explanation:

The computation of the annual net savings from installing this system is shown below

Given that

Reduction in average mail time= 1.5 days

And, Reduction in clearing and processing time = 1day

So, Total reduction =  1.5 + 1 = 2.5 days

No. of checks per day= 198

Average Value= $2300

So, the Value of all checks per day is

= 2300 × 198

= $455,400

Now total savings is

= $455,400 × 2.5 days × 0.00011 × 365 days

= $45,710.77

The Cost of service is

= Annual fee + variable fee

=  $27,500 + 0.20 × 198 × 365

= $41,954

Now

finally Net savings is

= $45,710.77 - $41,954

= $3,756.77

When expanding into a foreign country with a different culture, you should use Hofstede's dimensions of culture to build marketing campaigns _________ consistent with underlying cultural values in a country ____________ with low individualism symbolism when confronted with a time-oriented culture _____________ that use uncertainty avoidance to reduce power distance _____________ with significant power distance __________ with more consistent time orientation.

Answers

Answer:

Consistent with underlying cultural values in a country.

Explanation:

Hofstede's dimensions of culture is a theory based on cross culture communication. There are six dimensions:

1. Power distance index

2. Individualism versus collectivism

3. Masculinity versus femininity

4. Uncertainty avoidance Index

5. Long term versus short term orientation

6. Indulgence versus restraint.

On December 31, Caper, Inc., issued $250,000 of eight percent, ten-year bonds for $218,844, yielding an effective interest rate of ten percent. Semiannual interest is payable on June 30 and December 31 each year. The firm uses the effective interest method to amortize the discount.

Required
Prepare an amortization schedule showing the necessary information for the first two interest periods.

Answers

Answer:

Capter, Inc.

Amortization Schedule

Date        Payment    Interest Expense   Amortization   Net Book Value

Dec. 31                                                                                     $218,844

June 30  $10,000         $10,942                   $942                   219,786

Dec. 31      10,000           10,989                     989                   220,775

Explanation:

a) Data and Calculations:

Face value of bonds = $250,000

Bonds proceeds =           218,844

Bonds discounts =           $31,156

Coupon rate = 8% with semiannual payments

Effective interest rate = 10%

On June 30:

Interest payment = $10,000 ($250,000 * 4%)

Interest Expense = $10,942 ($218,844 * 5%)

Amortization of discount = $942

Value of bonds = $219,786 ($218,844 + 942)

On December 31:

Interest payment = $10,000 ($250,000 * 4%)

Interest Expense = $10,989 ($219,786 * 5%)

Amortization of discount = $989

Value of bonds = $220,775 ($219,786 + 989)

A change in supply is illustrated by a movement along an existing supply curve


true or false

Answers

the correct answer is true.

Differences between pretax accounting income and taxable income were as follows during 2021: ($ in millions) Pretax accounting income $ 400 Permanent difference (34 ) 366 Temporary difference (26 ) Taxable income $ 340 The cumulative temporary difference as of the end of 2021 is $80 million (also the future taxable amount). The enacted tax rate is 25%. What is the deferred tax asset or liability to be reported in the balance sheet

Answers

Answer:

20 million

Explanation:

Calculation to determine the deferred tax asset or liability to be reported in the balance sheet

Using this formula

Deferred tax asset or liability=cumulative temporary difference as of the end of 2021 *tax rate

Let plug in the formula

Deferred tax asset or liability= $80 million *25%

Deferred tax asset or liability=20 million

Therefore the deferred tax asset or liability to be reported in the balance sheet is $20 million

Tops Co. purchases equipment for $12,000 and has been using straight-line depreciation, estimating a 5-year life and $500 salvage value. At the beginning of the third year, Tops decides to use the equipment for a total of 6-years with no salvage value. Compute the revised depreciation for the third year. Multiple choice question. $2,875 $1,850 $1,250 $2,375

Answers

Answer:

Annual depreciation= $1,850

Explanation:

Giving the following formula:

Purchase price= $12,000

Salvage value= $500

Useful life= 5 years

First, we need to calculate the annual depreciation and accumulated depreciation:

Annual depreciation= (original cost - salvage value)/estimated life (years)

Annual depreciation= (12,000 - 500) / 5

Annual depreciation= 2,300

Accumulated depreciation (2 years)= 2,300*1= 4,600

Now, we can determine the annual depreciation with a 4 more years of useful life:

Book value= 12,000 - 4,600= 7,400

useful life= 4 years more

Annual depreciation= 7,400/4

Annual depreciation= $1,850

The following statements provide some analysis of policy regarding the global financial crisis of the late 2000s. Categorize each statement as positive or normative. Statement Positive or Normative?

a. The financial crisis was caused by faulty mathematical models that encouraged excessive risk taking.
b. The lack of effective regulation contributed to a risk-seeking culture in the financial services industry.
c. Central banks should have imposed tighter regulations on banks to prevent the financial crisis.
d. Executives of banks that received financial assistance from the government should not have received bonuses.

Answers

Answer:

Positive statement

Positive statement

normative statement

normative statement

Explanation:

Positive Economics is objective and statements are usually based on facts and economic theory. They can be tested.  

For example, the statement - the lack of effective regulation contributed to a risk-seeking culture in the financial services industry- can be test empirically

Normative economics is based value judgements, opinions and perspectives. For example, the statement - Central banks should have imposed tighter regulations on banks to prevent the financial crisis- is based on opinion. Everyone would have an opinion on what the Central bank should have done

Suppose you win on a scratch‑off lottery ticket and you decide to put all of your $2,500 winnings in the bank. The reserve requirement is 5% . What is the maximum possible increase in the money supply as a result of your bank deposit? maximum increase: $ Which events could cause the increase in the money supply to be less than its potential? Banks choose to loan out all excess reserves. All money loaned out is deposited back into the banking system. Banks decide to keep some excess reserves on hand. Some loan recipients choose to hold some cash instead of depositing all of it in banks.

Answers

Answer:

$50,000

Banks decide to keep some excess reserves on hand.

Explanation:

Increase in the total value of checkable deposit is determined by the money multiplier

Money multiplier = amount deposited / reserve requirement

2500/ 0.05 = $50,000

If the banks decides to keep excess reserves, the money loaned out would be lower and this would reduce money supply

Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow: Division Osaka Yokohama Sales $ 3,000,000 $ 9,000,000 Net operating income $ 210,000 $ 720,000 Average operating assets $ 1,000,000 $ 4,000,000 Required: 1. For each division, compute the return on investment (ROI) in terms of margin and turnover. 2. Assume that the company evaluates performance using residual income and that the minimum required rate of return for any division is 15%. Compute the residual income for each division. 3. Is Yokohama’s greater amount of residual income an indication that it is better managed?

Answers

Answer:

1. Return on Investment = Sales Margin / Capital turnover

= (Net income / Sales) ÷ (Assets / Sales)

Osaka:

= (210,000 / 3,000,000) ÷ (1,000,000 / 3,000,000)

= 0.07 / 0.33

= 21%

Yokohama

= (720,000 / 9,000,000) ÷ (4,000,000 / 9,000,000)

= 0.08 / 0.44

= 18%

2. Residual income = Operating income * (Required return * Average operating assets)

Osaka = 210,000 - (15% * 1,000,000)

= $60,000

Yokohama = 720,000 - (15% * 4,000,000)

= $120,000

c. No is isn't because Residual income is not a good matric to use to compare companies or departments as it does not show the amount of assets used by the companies being compared.

Marshall Welding Company has two service departments (Cafeteria and Human Resources) and two production departments (Machining and Assembly). The number of employees in each department follows. Cafeteria 20 Human Resources 30 Machining 100 Assembly 150 Marshall Welding uses the step-down method of cost allocation and allocates cost on the basis of employees. Human Resources cost amounts to $1,200,000, and the department provides more service to the firm than Cafeteria. How much Human Resources cost would be allocated to Machining

Answers

Answer:

the  cost of Human Resources would be allocated to Machining is $480,000

Explanation:

The computation of the cost of Human Resources would be allocated to Machining is given below:

= Cost of the human resource × machining department ÷ (machining department + assembly department)

= $1,200,000 × 100 ÷ (100 +  150)

= $480,000

hence, the  cost of Human Resources would be allocated to Machining is $480,000

What to do most careers in Finance deal with?

a) real estate and education

b) assets and liabilities

c) assets and retail

d) real estate and retail

Answers

Answer:

b

Explanation:

B)

Answer: B would be the answer

Explanation: assist and liabilities

Product A consists of two units of Subassembly B, two units of C, and one unit of D. B is composed of four units of E and two units of F. C is made of two units of H and three units of D. H is made of five units of E and two units of G. To produce 100 units of A, determine the numbers of units of B, C, D, E, F, G, and H required using the low-level coded product structure tree.
Level 0 100 units of A
Level 1 units of B
units of C
Level 2 units of F
units of H
units of D
Level 3 units of E
units of G

Answers

Answer:

[tex]B = 200\ units[/tex]    [tex]C = 200\ units[/tex]

[tex]F = 400\ units[/tex]    [tex]H = 400\ units[/tex]

[tex]D = 700\ units[/tex]     [tex]E = 2800\ units[/tex]

[tex]G = 800\ units[/tex]

Explanation:

Given

[tex]A = 100\ units[/tex]

See attachment for right presentation of question

Solving (a): The low level coded product structure tree

This is plotted by considering the hierarchy or level of each product item and their corresponding units.

See attachment (2)

Solving (b): The number of units of each.

To do this, we multiply the units of the given product by the number of unit the fall under.

So, we have:

Products B and C are directly under A, so we multiply their units by units of A.

[tex]B = 2 * A = 2 * 100[/tex]

[tex]B = 200\ units[/tex]

[tex]C = 2 * A = 2 * 100[/tex]

[tex]C = 200\ units[/tex]

Product F is directly under B, so we multiply its units by units of B.

[tex]F = 2 * B = 2 * 200[/tex]

[tex]F = 400\ units[/tex]

Product H is directly under C, so

[tex]H = 2 * C = 2 * 200[/tex]

[tex]H = 400\ units[/tex]

Product D has of 3 units of C and 1 unit of A. So:

[tex]D = 3 * C + 1 * A[/tex]

[tex]D = 3 * 200 + 1 * 100[/tex]

[tex]D = 700\ units[/tex]

Product E has of 4 units of B and 5 units of H. So:

[tex]E = 4 * B + 5 * H[/tex]

[tex]E = 4 *200 + 5 * 400[/tex]

[tex]E = 2800\ units[/tex]

Product G has 2 units of H.

So:

[tex]G = 2 * H = 2 * 400[/tex]

[tex]G = 800\ units[/tex]

differences between home trade and international trade​

Answers

Home = domestic. Domestic trading is made up of products made within the country’s borders and sold to domestic retailers. International is the opposite

Which statement is CORRECT? Automatic stabilizers are risky to use and sometimes can get the economy destabilized. Discretionary fiscal policy shows automatic adjustments without any specific effort by policy makers. Discretionary fiscal policy indicates deliberate action by policy makers. Automatic stabilizers indicate deliberate action by policy makers.

Answers

Answer:

Discretionary fiscal policy indicates deliberate action by policy makers.

Explanation:

Automatic stabilizers are stabilizers that adjust the economy automatically without the intervention of external agents . examples include progressive tax and transfer payments

In an expansion, progressive tax increases the tax paid and this reduces disposable income

In a contraction, tax paid is reduced and this increases disposable income

Discretionary fiscal policies are deliberate steps taken by the government to stimulate the economy in order to cause the economy to move to full employment and price stability more quickly than it might otherwise.

Discretionary fiscal policies can either be expansionary or contractionary

Expansionary fiscal policy is when the government increases the money supply in the economy either by increasing spending or cutting taxes.

Contractionary fiscal policies is when the government reduces the money supply in the economy either by reducing spending or increasing taxes

Resources do not limit the number of needs and wants people
can
satisfy.
True or False

Answers

Answer:

False

Explanation:

Resources absolutely limit what can be accomplished and done. Just think of the timber industry. They want to cut down all trees they can to make a profit, but society needs to preserve natural forests so their cutting is limited.  

Answer:

false

Explanation:

resources is a source that is generate form nature. the resources satisfy the wants because is the will no resource like - chair , table, food( that we cook) etc. we can't survive in this world. some examples for reading in school tables, chair are made form wood, which is a source .

In the sports and entertainment marketing industry, the event is the core product
True
False

Answers

Answer:

True

Explanation:

Brainliest

There is an investment with the discount rate of 6 %. What should be the present value of the investment if we want to get a net cash flow of $17500;
a) After 1 year
b) After 2 years
c) After 3 years

Answers

Answer:

a. $16,509.434

b. $15,574.94

c. $14,693.34

Explanation:

The calculation of the present value for the following cases is  

 we know that

Present Value = Future Value ÷ (1+ rate of interest)^number of years

a. After one year

= $17,500 ÷ (1 + 0.06)^1

= $16,509.434

b. After 2 years

= $17,500 ÷ (1 + 0.06)^2

= $17,500 ÷ 1.1236

= $15,574.94

c. After 3 years

= $17,500 ÷ (1 + 0.06)^3

= $17,500 ÷ 1.191016

= $14,693.34

Therefore, the present value after one year, 2 years and third year is $16,509.434 ,$15,574.94 and $14,693.34 respectively

All of the following statements about exit in monopolistic competition are true, except: Select the correct answer below: When economic losses induce firms to leave the industry, demand for the original firm decreases. As long as a monopolistic competitive firm is earning positive economic profits, new competitors will continue to enter the market, Even though a monopolistically competitive firm may earn positive economic profits in the short term, the process of new entry will drive down economic profits to zero in the long run. In an environment with monopolistic competition, economic losses induce firms to leave the industry.

Answers

Answer:

When economic losses induce firms to leave the industry, demand for the original firm decreases.

Explanation:

A monopolistic competition is when there are many firms selling differentiated products in an industry. A monopoly has characteristics of both a monopoly and a perfect competition. the demand curve is downward sloping. it sets the price for its goods and services.

An example of monopolistic competition are restaurants  

When firms are earning positive economic profit, in the long run, firms enter into the industry. This drives economic profit to zero

If firms are earning negative economic profit, in the long run, firms leave the industry.  This drives economic profit to zero

in the long run, only normal profit is earned

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