please I need your help with this question. Thank you.
Explanation:
it's write tricky one...but if I get time I will solve it
what is a con of investing in bonds
The cons of investing in bonds includes:
rising interest rates, market volatility, credit risk.bonds can decrease return on equityit require payment of both periodic interest and the par value at maturityWhat is a bonds investment?These are investment securities where an investor lends money to a company or a government for a set period of time in an exchange for regular interest payments.
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What are two issues you should look for while previewing a form letter?
spacing problems and paper quality problems
instances in which multiple sources are used and spacing problems
spacing problems and errors in recipient information
paper quality problems and errors in recipient information
its C
Answer:
spacing problems and paper quality problems
Josh buys an $8000 10-year bond that has a coupon rate of 4.5 %. If he keeps the bond to maturity, how much interest will he collect?
Josh will collect $3600 in interest if he keeps the $8000 10-year bond with a 4.5% coupon rate to maturity.
To calculate the interest that Josh will collect from the 10-year bond with an $8000 face value and a coupon rate of 4.5%, we need to consider the annual interest payment and the total number of interest payments over the bond's lifespan.
The annual interest payment can be calculated by multiplying the face value of the bond ($8000) by the coupon rate (4.5%). This gives us an annual interest payment of $360 (8000 * 0.045).
Since the bond has a 10-year maturity, there will be a total of 10 interest payments over its lifespan. Therefore, the total interest Josh will collect can be calculated by multiplying the annual interest payment ($360) by the number of interest payments (10).
Total interest = Annual interest payment * Number of interest payments
Total interest = $360 * 10
Total interest = $3600
Therefore, if Josh keeps the bond to maturity, he will collect a total of $3600 in interest over the 10-year period.
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If Amelia would like to double her money in twelve years, how much interest does she need to earn O 12 percent O 16.6 percent O 6 percent 10 percent
Out of the given answer choices, the interest rate that Amelia needs to earn to double her money in twelve years is 16.6 percent.
To find out how much interest Amelia needs to earn to double her money in twelve years, we need to use the compound interest formula.
This formula is used to determine the future value of an investment based on the principal, the interest rate, the number of compounding periods, and the time involved.
The formula is as follows: FV = PV x (1 + r/n)^(n*t)where FV = future value, PV = present value (the amount of money Amelia currently has), r = annual interest rate, n = number of times the interest is compounded per year, and t = time in years.
To double her money, Amelia needs to have a future value that is twice her present value. Therefore, we can set FV = 2PV and solve for r.
2PV = PV x (1 + r/n)^(n*t)Dividing both sides by PV, we get:2 = (1 + r/n)^(n*t)
Taking the natural logarithm of both sides, we get: ln(2) = ln[(1 + r/n)^(n*t)]
Using the power rule of logarithms, we can simplify the right side of the equation to ln(2) = (n*t) ln(1 + r/n)
Dividing both sides by (n*t), we get:ln(2) / (n*t) = ln(1 + r/n)
Finally, we can solve for r by raising both sides as the power of e: e^(ln(2) / (n*t)) = 1 + r/n
Subtracting 1 from both sides and multiplying by n, we get:r = n x (e^(ln(2) / (n*t)) - 1)
Plugging in the values given, we get:r = n x (e^(ln(2) / (n*12)) - 1)
We don't know the value of n, so we can try each of the answer choices to see which one gives us a value of r that works.
Using a financial calculator or a spreadsheet program like Excel, we can calculate the values of r for each interest rate.
Using 12 percent: r = 1 x (e^(ln(2) / (1*12)) - 1) = 0.0956 or 9.56 percent
Using 16.6 percent: r = 1 x (e^(ln(2) / (1*12)) - 1) = 0.1407 or 14.07 percent
Using 6 percent: r = 1 x (e^(ln(2) / (1*12)) - 1) = 0.0488 or 4.88 percent
Using 10 percent: r = 1 x (e^(ln(2) / (1*12)) - 1) = 0.0794 or 7.94 percent
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The index used to measure inflation is the a. consumer price index. b. producer price index. c. wholesale price index. d. GDP deflator.
Answer:
d
Explanation:
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PLEASE HELP ME IM STUCK ON THIS
an application to register securities may be filed by all of the following except a(n): a broker-dealer b agent c issuer d person on whose behalf the offering is to be made
Option B is correct, Agent cannot file an application to register securities, whereas the other three are eligible for filing the same.
This security is either security whose transfer is prohibited or whose owner is tracked by the issuer. When ownership of a security is registered with the issuing corporation or their agent, the security is known by this name.
The sale of a fresh issuance of securities covered by an effective registration statement that was submitted by the issuer in a State has already begun. Only the Issuer, the Broker Dealer, and the person for whose benefit the offering is being made may submit an application to register securities.
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What happens if people believe that government spending on library books will encourage even more reading and increase the private purchases of books
Answer:
That will be a good thing. Reading is great for everyone.
Fiscal policy will have a larger impact on the economy than if people didn't increase their purchases of books is the happens if people believe that government spending on library books will encourage even more reading and increase the private purchases of books. Hence, option B is correct.
What is Fiscal policy?The use of taxation and expenditure by the government to affect the economy is known as fiscal policy. Fiscal policy is often used by governments to encourage robust, long-term growth and to lower poverty.
Tax reductions and greater public spending are the two main manifestations of expansionary fiscal policy. Both of these measures aim to boost overall demand while reducing budget surpluses or adding to deficits.
Using taxation and spending by the government to influence the economy. escalating taxes. tax that is levied at a higher rate of taxation as income increases. Important phrases.
Thus, option B is correct.
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The options were attached below-
what happens in your retirement if you have a lapse in your years of work history?
Your monthly benefit will be lower
A lapse in your years of work history refers, There are generally the four ways by which we can handle it, various points are as leave it where it is, and the second point refers that, roll it over an ira.
What is employment?In most cases, employment refers to the status of having a paid job—of being employed. Employing someone is paying them to work. Employees are employed by an employer. Employment can also refer to the act of hiring individuals, as in We're trying to hire more women.
The employment lapse refers that, The working period of an employee and, The commencing of the individual's termination from the service date. He can continue to begin the performance services as an employee.
Therefore. As a result, The ends of the benefits, or the privileges are been applicable under a policy.
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Yes! Assuming Economia's aggregate supply curve is upward sloping, when the aggregate demand curve shifts rightward, this will:
When the aggregate demand curve shifts rightward, this will increase Economia's real output and the price level.
What happens when the aggregate demand shifts rightward?
The aggregate demand curve is a curve that shows the total quantity of all goods and services demanded by the economy at different price levels. The aggregate demand curve slopes downward.
When aggregate demand curve shifts to the right, there would be an increase in the real output and the price levels.
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____ is the production of goods or services within an economy and can include anything from farming, to furniture making, to healthcare services.
Answer:
I believe it's a market economy.
Explanation:
which business function is concerned with delivering a product or service to customers?
Answer:
Production
Production departments or companies are the manufacturing branches of a business to produce products or delivery of services to customers
11. John rates Peter an average worker, “excellent” on all his performance evaluations. The rest of staff suspects that Peter gets high ratings because he graduated from the same prestigious university and was a member of the same fraternity as John. If this were accurate, what rating error has the staff identified? Explain your answer
Considering the situation described in the question, if the allegations were accurate, the rating error the staff identified is known as the "Similarity Bias" error.
This is because the Similarity Bias is a type of rating error where the rater rates a person or candidate higher than he deserves because they shared or have some similarities like having played for the same football team or attended the same school.There are other types of rating bias that do not apply to this situation.These include Halo bias and Leniency bias.Hence in this case the correct answer is "Similarity Bias"
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Summarize chaleff’s courageous followership? I need help!!
Chaleff's courageous followership emphasizes the importance of active and engaged followers who possess the courage to speak up, take initiative, act ethically, and influence their leaders and organizations positively.
Chaleff's courageous followership is a concept that highlights the significance of followers who possess the courage and willingness to actively engage in their roles and influence their leaders and organizations in a positive manner. It challenges the traditional notion that followers should simply obey and conform to their leaders without question.
According to Chaleff, courageous followership involves followers who are willing to speak up, take initiative, and provide constructive feedback to their leaders. These followers are not afraid to express their opinions, voice concerns, and offer alternative viewpoints, even when it goes against the prevailing norms or authority. They understand that their active participation is crucial for the success and growth of the organization.
Courageous followers also exhibit ethical behavior and take responsibility for their actions. They hold themselves accountable for their decisions and actions, aligning their behaviors with their values and the organization's values. They are willing to stand up against unethical practices and unethical leadership when necessary, with the aim of promoting integrity and ethical decision-making within the organization.
Chaleff's courageous followership promotes a collaborative and mutually beneficial relationship between leaders and followers. It encourages leaders to create an environment where followers feel safe and empowered to express their ideas and concerns. By fostering open communication and embracing diverse perspectives, leaders can tap into the full potential of their followers and create a culture of innovation and adaptability.
In summary, Chaleff's courageous followership emphasizes the importance of active and engaged followers who possess the courage to speak up, take initiative, act ethically, and influence their leaders and organizations positively. It advocates for a dynamic and collaborative relationship between leaders and followers, ultimately aiming to enhance organizational effectiveness, ethical decision-making, and overall success.
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A textbook is a
Select one:
a. common resource and the knowledge that one gains from reading the book is a private good.
b. common resource and the knowledge that one gains from reading the book is a public good.
c. private good and the knowledge that one gains from reading the book is a common resource.
d. private good and the knowledge that one gains from reading the book is a public good.
textbook is a d. private good and the knowledge that one gains from reading the book is a public good.
A textbook is a written or digital resource that offers knowledge on a single topic or a variety of related subjects.It is regarded as a private good because only the person who owns or purchases it can utilise it.A textbook's contents are a public good since they can be distributed to others without losing their value.A textbook's content can be used by several people at once, and as more people gain access to it, the more valuable it becomes.A textbook is often only accessible to those who have paid for it, whether through purchase or rental, in contrast to a common resource.In some cases, textbooks can be a significant expense for students, which has led to efforts to make them more affordable or accessible.Textbooks can vary widely in quality, accuracy, and relevance, making it important to select the right book for a particular purpose or subject.
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How can you make positive economic choices?
Answer:
All choices require giving up something in your life whether that is friends or family, or things that you really want. Economic choices require you to think do you really want this and what is the benifit out of it, like what do you get out of making this decision. The economic things are what will be produced, how will it be produced, and how will the output society produces be distributed
Explanation:
Using the information below for Singing Dolls, Inc., determine the total manufacturing costs incurred during the year:Work in Process, January 1 $53,000Work in Process, December 31 38,500Direct materials used 14,000Total Factory overhead 7,000Direct labor used 28,000a- $49,000.b- $95,000.c- $102,000.d- $63,500.e- $14,500.
Answer:
The correct answer is D.
Explanation:
Giving the following information:
Work in Process, January 1 $53,000
Work in Process, December 31 38,500
Direct materials used 14,000
Total Factory overhead 7,000
Direct labor used 28,000
To calculate the total manufacturing costs, we need to use the following formula:
cost of goods manufactured= beginning WIP + direct materials + direct labor + allocated manufacturing overhead - Ending WIP
cost of goods manufactured= 53,000 + 14,000 + 28,000 + 7,000 - 38,500
cost of goods manufactured= $63,500
A celebrity Persona:
A. is always the opposite of the Peron's true character
B. may often be an extension of the persons true self
C. can never be influenced by a person's experiences.
D. is usually more insensitive than the person really is
Answer:
D
Explanation:
Makes sense to me! Please tell me if wrong!
NEVERMIND DONT CHOOSE THIS ITS B
Amy Auto Parts has inventory that has been recorded on their balance sheet at $156,000. The fact that Amy’s inventory is not reflected at a value that would be realized if it were required to be sold immediately to pay bills is referred as the ___________.
The fact that Amy’s inventory is not reflected at a value that would be realized if it were required to be sold immediately to pay bills is referred to as the Going concern concept. Thus, option C is correct.
What is inventory?An inventory will be defined as the part in which the resources will be available with the company or the business. This will help them to define the state in which the organization will either have a raw, in-process, or finished inventory.
In the process of the going concern concept, it will be determined that the accounting principle was to be made sure that the inventory is in the processing feature. In the Amy, Auto parts book the amount of $156,000 will not be reflected in the books when prepared.
Therefore, option C is correct.
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The question is incomplete, Complete question probably will be is:
Amy Auto Parts has inventory that has been recorded on their balance sheet at $156,000. The fact that Amy’s inventory is not reflected at a value that would be realized if it were required to be sold immediately to pay bills is referred as the ___________.
materiality concept
liquidity concept
going concern concept
consistency concept
what type of economic system does cubs have
Answer:
the economy of cuba is a mixed command dominated by state-run enterprises most of the labor force is employed by the state.
A portfolio has an expected return of 13.8%, a beta of 1.14, and a standard deviation of 12.7%. The U.S. Treasury bill rate is 3.2%. What is the Treynor ratio
Answer:
hope this helps
A portfolio has an expected return of 13.8 percent, a beta of 1.14, and a standard deviation of 12.7 percent. The U.S. Treasury bill rate is 3.2 percent. What is the Treynor ratio?
A. .093
B. .138
C. .146
D. .835
E. .951
your answer A. .093
Explanation:
Robert owns a $213,000 town house and still has an unpaid mortgage of $174,000. In addition to his mortgage, he has the following liabilities: Liabilities Visa $ 610 MasterCard 561 Discover card 429 Education loan 1,003 Personal bank loan 894 Auto loan 4,970 $ Total 8,467 Robert's net worth (not including his home) is about $21,600. This equity is in mutual funds, an automobile, a coin collection, furniture, and other personal property. (a) What is Robert's debt-to-equity ratio? (Round your answer to 2 decimal places.) Debt-to-equity ratio (b) Has he reached the upper limit of debt obligations? O Yes O No
The correct answer is debt-equity rate=0.37. Net worth, or shareholder's equity, in the account, denotes the quantum which is reckoned after reducing total arrears from total means.
It's a way to assess the wealth of an association or an existent. The calculation of the debt-equity rate is shown below
Debt- equity rate = Debt ÷ Equity Hello fam it's been an awful time with Brewdiés family really enjoyed it. Some really cool musketeers and met numerous new people but I guess I have overstayed my hello now it's time for me to go love ya guys thanks for always being there and supporting me = $,101 ÷$,700= 0.37.
As the rate is lower than 1 so Robert would not reached the upper limit with respect to the debt scores. The debt-to-equity rate is calculated by dividing your total arrears by your networth. However, you have reached the upper limit of debt scores, If your debt- to- equity rate is about ½.
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A pedestrian was in a hurry, and he crossed the street in the
middle of the block rather than walking to the corner
crosswalk. A police officer stopped the pedestrian and asked
to see his driver's license or identification card. The
pedestrian did not have either. When he told the officer this,
she said, "All right, I'm taking you in for jaywalking," and
seized the pedestrian's wrist, twisting it up and behind him in
a personnel control lock. A black belt in judo, the pedestrian
easily slipped the officer's grasp. The officer pulled her baton
from her belt and attempted to strike the pedestrian, who
moved swiftly to the side, chopped at her arm, and caused
the baton to fall from her grasp to the pavement. At that
point two other officers arrived on the scene and arrested the
pedestrian.
WBS for the knowledge area of Human/Resource Management for a low-cost housing project
Here's an example of a WBS for the knowledge area of Human/Resource Management for a low-cost housing project:
The wbs for a knowledge area of Human/Resource Management for a low-cost housing projectHuman/Resource Management
1.1 Staffing Plan
1.1.1 Define project roles and responsibilities
1.1.2 Identify required staffing resources
1.1.3 Determine the project team structure
1.1.4 Develop a staffing plan and budget
1.2 Recruitment and Selection
1.2.1 Create job descriptions and specifications
1.2.2 Advertise and promote job openings
1.2.3 Review resumes and conduct initial screenings
1.2.4 Conduct interviews and select candidates
1.2.5 Perform background checks and reference checks
1.2.6 Extend job offers and negotiate terms
1.3 Training and Development
1.3.1 Assess training needs for project team members
1.3.2 Develop a training plan and schedule
1.3.3 Conduct training sessions and workshops
1.3.4 Provide on-the-job training and mentoring
1.3.5 Evaluate training effectiveness and adjust as needed
1.4 Performance Management
1.4.1 Set performance expectations and goals
1.4.2 Monitor and assess individual and team performance
1.4.3 Provide feedback and coaching to improve performance
1.4.4 Conduct performance appraisals and evaluations
1.4.5 Identify and address performance issues or conflicts
1.5 Resource Allocation
1.5.1 Identify project resource requirements
1.5.2 Allocate resources based on project needs
1.5.3 Monitor resource utilization and availability
1.5.4 Optimize resource allocation to meet project objectives
1.6 Stakeholder Management
1.6.1 Identify project stakeholders and their interests
1.6.2 Develop a stakeholder engagement plan
1.6.3 Communicate and manage stakeholder expectations
1.6.4 Address stakeholder concerns and resolve conflicts
1.6.5 Maintain positive relationships with stakeholders
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Consider the farmer and factory owner example. If we give the farmer the right to clean air, what can the factory owner do to convince the farmer to allow him to have dirtier air?
What is 30% of 3/5
Answer: Solution for What is 30 percent of 3/5
30 percent *3.50 =
(30:100)*3.50 =
(30*3.50):100 =
105:100 = 1.05
Now we have: 30 percent of 3.50 = 1.05
Question: What is 30 percent of 3.50?
Percentage solution with steps:
Step 1: Our output value is 3.50.
Step 2: We represent the unknown value with $x$x.
Step 3: From step 1 above,$3.50=100\%$3.50=100%.
Step 4: Similarly, $x=30\%$x=30%.
Step 5: This results in a pair of simple equations:
$3.50=100\%(1)$3.50=100%(1).
$x=30\%(2)$x=30%(2).
Step 6: By dividing equation 1 by equation 2 and noting that both the RHS (right hand side) of both
equations have the same unit (%); we have
$\frac{3.50}{x}=\frac{100\%}{30\%}$
3.50
x=
100%
30%
Step 7: Again, the reciprocal of both sides gives
$\frac{x}{3.50}=\frac{30}{100}$
x
3.50=
30
100
$\Rightarrow x=1.05$⇒x=1.05
Therefore, $30\%$30% of $3.50$3.50 is $1.05$
Explanation:
Answer: 2
Explanation:
30% 0f that number works out to be 3/5
30/100 * x = 3/5
isolate x by multiplying on both sides by 100/30
100/30 * 30/100 *x = 100/30 * 3/5
x = 20/10 = 2
Treat it as direct proportion
3/5 = 0.6
so,
x/100 = 0.6/30
x = 100*0.6/30
x = 2
On July 1, 2016, Killearn Company acquired 110,000 of the outstanding shares of Shaun Company for $14 per share. This acquisition gave Killearn a 25 percent ownership of Shaun and allowed Killearn to significantly influence the investee's decisions. As of July 1, 2016, the investee had assets with a book value of $5 million and liabilities of $620,000. At the time, Shaun held equipment appraised at $308,000 above book value; it was considered to have a seven-year remaining life with no salvage value. Shaun also held a copyright with a five-year remaining life on its books that was undervalued by $1,208,000. Any remaining excess cost was attributable to goodwill. Depreciation and amortization are computed using the straight-line method. Killearn applies the equity method for its investment in Shaun. Shaun's policy is to declare and pay a $1 per share cash dividend every April 1 and October 1. Shaun's income, earned evenly throughout each year, was $591,000 in 2016, $634,400 in 2017, and $682,400 in 2018. In addition, Killearn sold inventory costing $98,400 to Shaun for $164,000 during 2017. Shaun resold $117,000 of this inventory during 2017 and the remaining $47,000 during 2018. Determine the equity income to be recognized by Killearn during each of these years. Compute Killearn's investment in Shaun Company's balance as of December 31, 2018.
Answer:
A. 2017 $61,400
2018 $49,400
B. $1,650,800
Explanation:
A. Calculation to Determine the equity income to be recognized by Killearn during each of these years.
2017 EQUITY INCOME
Equity Income =(25%*$634,400)-($ 1 per share April 1 Cash dividend+$ 1 per share October 1 Cash dividend*$110,000)
Equity Income =$158,600-($2per share*110,000)
Equity Income =$158,600-$220,000
Equity Income =$61,400
2018 EQUITY INCOME
Equity Income =(25%*$682,400)-($ 1 per share April 1 cash dividend+$ 1 per share October 1 cash dividend*$110,000)
Equity Income =$170,600-($2per share*110,000)
Equity Income =$170,600-$220,000
Equity Income =$49,400
Therefore the equity income to be recognized by Killearn during 2017 is $61,400 and 2018 is $49,400 .
b. Computation for Killearn's investment in Shaun Company's balance as of December 31, 2018
Original Investment at Cost $1,540,000
( 110,000*14per share)
Add 2017 Profit shared (Net of Dividend) $61,400
Add 2018 Profit shares (Net of Dividend) $ 49,400
2018 Investment Value $1,650,800
($1,540,000+$61,400+$ 49,400)
Therefore Killearn's investment in Shaun Company's balance as of December 31, 2018 will be $1,650,800
2) Haile Resort opened for business on June 1 with eight air conditioned units. Its trial balance on August 31 is as follows.
Haile Resort Trial Balance
August 31, 2022
Debit Credit
Cash Br. 39,200
Prepaid Insurance 9,000
Supplies 5,200
Land 40,000
Buildings 240,000
Equipment 32,000
Accounts Payable Br. 9,000
Unearned Rent Revenue 9,200
Mortgage Payable 100,000
Share Capital—Ordinary 200,000
Retained Earnings 0
Dividends 10,000
Rent Revenue 172,400
Salaries and Wages Expense 89,600
Utilities Expense 18,400
Maintenance and Repairs Expense 7,200
Br.490,600 Br.490,600
Other data:
1. The balance in prepaid insurance is a 1-year premium paid on June 1, 2022.
2. An inventory count on August 31 shows Br.1,300 of supplies on hand.
3. Annual depreciation rates are buildings (4%) and equipment (10%).
4. Unearned rent revenue of Br.7,600 should be recognized as revenue prior to August 31.
5. Salaries and wages of Br.750 were unpaid at August 31.
6. Rentals of Br.1,600 were due from tenants at August 31.
7. The mortgage note is dated 1/1/2022. The mortgage interest rate is 8% per year.
a. Journalize the adjusting entries on August 31 for the 3-month period June 1–August 31.
b. Prepare an adjusted trial balance on August 31.
a) The adjusting journal entries on August 31 to recognize the unrecorded transactions for Haile Resort are as follows:
Adjusting Journal Entries:Account Titles Debit Credit
Insurance Expense Br. 2,250
Prepaid Insurance Br. 2,250
Supplies Expense Br. 3,900
Supplies Br. 3,900
Depreciation Expenses:
Building Br. 2,400
Equipment Br. 800
Accumulated Depreciation:
Building Br. 2,400
Equipment Br. 800
Unearned rent revenue Br. 7,600
Rent Revenue Br. 7,600
Salaries & Wages Expense Br. 750
Salaries & Wages Payable Br. 750
Mortgage Expenses Br. 5,333
Mortgage Expenses Payable Br. 5.333
b) The preparation of an adjusted trial balance for Haile Resort on August 31 is as follows:
Haile Resort
Adjusted Trial BalanceAugust 31, 2022
Debit Credit
Cash Br. 39,200
Rental Receivable 1,600
Prepaid Insurance 6,750
Supplies 1,300
Land 40,000
Buildings 240,000
Accumulated Depreciation Br. 2,400
Equipment 32,000
Accumulated Depreciation 800
Accounts Payable 9,000
Unearned Rent Revenue 1,600
Salaries and Wages Payable 750
Mortgage Interest Payable 5,333
Mortgage Payable 100,000
Share Capital—Ordinary 200,000
Retained Earnings 0
Dividends 10,000
Rent Revenue 181,600
Salaries and Wages Expense 90,350
Utilities Expense 18,400
Maintenance and Repairs Expense 7,200
Insurance Expense 2,250
Supplies Expense 3,900
Depreciation Expenses:
Buildings 2,400
Equipment 800
Mortgage Interest Expense 5,333
Totals Br.501,483 Br.501,483
What is an adjusting entry?Adjusting journal entries are period-end recognition of business transactions to ensure that the matching and accrual concepts of generally accepted accounting principles are followed.
Analysis of Adjusting Entries:Insurance Expense Br. 2,250 Prepaid Insurance Br. 2,250
Supplies Expense Br. 3,900 Supplies Br. 3,900
Depreciation Expenses: Building Br. 2,400 Equipment Br. 800 Accumulated Depreciation: Building Br. 2,400 Equipment Br. 800
Unearned rent revenue Br. 7,600 Rent Revenue Br. 7,600
Salaries and Wages Expense Br. 750 Salaries and Wages Payable Br. 750
Mortgage Expenses Br. 5,333 Mortgage Expenses Payable Br. 5.333
Haile Resort
Trial Balance AdjustmentAugust 31, 2022
Debit Credit
Cash Br. 39,200
Rental Receivable 1,600
Prepaid Insurance 9,000 - 2,250
Supplies 5,200 - 3,900
Land 40,000
Buildings 240,000
Equipment 32,000
Accounts Payable Br. 9,000
Unearned Rent Revenue 9,200 - 7,600
Salaries and Wages Payable 750
Mortgage Interest Payable 5,333
Mortgage Payable 100,000
Share Capital—Ordinary 200,000
Retained Earnings 0
Dividends 10,000
Rent Revenue 172,400 + 7,600 + 1,600
Salaries and Wages Expense 89,600 + 750
Utilities Expense 18,400
Maintenance and Repairs Expense 7,200
Insurance Expense 2,250 (Br. 9,000 x 3/12)
Supplies Expense 3,900
Depreciation Expenses:
Buildings 2,400 (Br. 240,000 x 4% x 3/12)
Equipment 800 (Br. 32,000 x 10% x 3/12)
Mortgage Interest Expense 5,333 (Br. 100,000 x 8% x 8/12)
NB: The mortgage note is dated 1/1/2022 and not 6/1/2022.
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You are considering an investment that costs $152,000 and has projected cash flows of $71,800, $86,900, and -$11,200 for years 1 to 3, respectively. If the required rate of return is 15.5 percent, should you accept the investment based solely on the internal rate of return rule? Why or why not?
a. Yes; The IRR exceeds the required return.
b. No; The IRR exceeds the required return.
c. You cannot apply the IRR rule in this case.
d. Yes; The IRR is less than the required return.
Answer:
c
Explanation:
Internal rate of return is the discount rate that equates the after-tax cash flows from an investment to the amount invested
The IRR would give conflicting answers in this case because a stream of positive cash flows is followed by negative cash flow
IRR can only be used when a negative cash flow is followed by positive cash flows
In this question there are two negative cash flows in year 0 and year 3