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1 year ago

Karen bought her house in 1980 for $78,500. In 2005, it was worth $850,000. What’s the rate of return on Karen’s investment?

Business

1 answer:

motikmotik1 year ago

8 0

Answer:

the rate of return on Karen investment is 10%

Explanation:

Given that

Bought price = P = $78500

Sale price = S =$850,000

Time priod = n = 25 years (1980 to 2005)

Based on the above information

The Rate of return is

= (S ÷ P)^(1 ÷ n) - 1

= ($850,000 ÷ $78,500)^(1 ÷ 25) - 1

= 0.099973

= 10.00%

hence, the rate of return on Karen investment is 10%

We simply applied the above formula

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Patricia Nall was approved for a $3,000, two-year, 11 percent loan with the finance charges figured using the discount method. H

Luba_88 [7]

Answer:

$2,340

Explanation:

The computation of cash received from this loan is shown below:-

cash received from this loan = Approved amount - (Approved amount × Two year × Percentage of loan )

= Approved amount - ($3,000 × 2 × 11% )

= $3,000 - ($3,000 × 2 × 0.11 )

= $3,000 - $660

= $2,340

Therefore, for computing the cash will Patricia receive from this loan we simply applied the above formula.

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2 years ago

The following is the income statement for the period ending December 31, Year 1, for Manatee Construction Company:

kaheart [24]

Answer:

Sales 8,000,000 DEBIT

Gain from the sale of investments 100,000 DEBIT

Income Summary 8,100,000 CREDIT

--to close revenues and earnings account

Income Summary 8,250,000 DEBIT

Cost of goods sold 6,500,000 CREDIT

Salaries expense 300,000 CREDIT

Other administrative expenses 100,000 CREDIT

Interest expense 900,000 CREDIT

Advertising expense 450,000 CREDIT

--to close expenses account

Retained Earnings 150,000 DEBIT

Income Summary 150,000 CREDIT

Explanation:

To close the accounts we use the income summary account as an auxiliar tool

The revenues and gains have a normla balance of credit thus, we debit to close them

The expenses are normal balance debit so we credit them against income summary.

Last we transfer the Income Summary account into retained earnings.

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2 years ago

For technology-based ventures, sometimes innovation results from recognizing an unsatisfied need in the marketplace, such as wit

Licemer1 [7]

Explanation:

Market pull can be defined as a strategy in which the organization develops a new product or service for customers to look for the company, which means bringing customers closer and gaining the advantage of loyalty and increasing the customer base.

The first example shows the market pull by developing a consumer need such as high-speed internet to replace a slower internet, that is, the company attracted consumers from a need that was not met in the market.

The advantages of this strategy are consumer loyalty , and the disadvantages may be the difficulty in designing a new product that meets the real needs of consumers and is well accepted in the market.

The "technology push" is the strategy used when companies are already recognized in the market enough to influence the demand for their products and services, and then launch new technological products with the expectation of creating the need in consumers from the value that the company have on the market.

The advantages of this strategy can be the increase in the brand value in the market, and the disadvantages can be spent on technological developments that may not be well accepted by consumers.

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2 years ago

3. Assuming the same sales mix, at what total sales level would Pure Water be indifferent between using the old equipment and bu

Nesterboy [21]

Answer:

The question is not complete. I want to assume the correct question is this:

Crystal Clear Products produces two types of water filters. One attaches to the faucet and cleans all water that passes through the faucet. The other is a pitcher cume filter that only purifies water meant for drinking. The unit that attaches to the faucet is sold for $90 and has variable costs of $25. The pitcher-cume-filter sells for $110 and has variable costs of $20. Crystal Clear sells two faucet models for every three pitchers sold. Fixed costs equal $1,200,000.

Assuming the same sales mix, at what total sales level would Crystal Clear be indifferent between using the old equipment and buying the new production equipment? If total sales are expected to be 24,000 units, should Crystal Clear buy the new production equipment?

Explanation:

Let b be the total sales volume at which the company's indifference is based

Let the average contribution in the old system be $80

The profit will be 80b - 1200000

Let the average contribution in the new syste, be $88

The profit will be 88b - 1408000

Now let us equate the two average contributions to get:

80b - 1200000 = 88b - 1408000

Let us find b,

88b - 80b -1408000 = -1200000

8b = -1200000 + 1408000

8b = 208000

b = 208000 / 8 = 26000 units

If total sales are expected to be 24,000 units, and the total sales volume at which the company's indifference is based 26,000 units, therefore Crystal Clear should not buy the new production equipment.

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2 years ago

Which of the following statements represent a weakness or limitation of ratio analysis? Check all that apply. A firm may operate

Art [367]

Answer: A firm may operate in multiple industries.

Different firms may use different accounting practices.

Explanation:

Ratio Analysis as you probably know is a very useful tool in financial analysis. It works by comparing ratios based on items in the financial statements of a company to measure certain things such as the Company's Liquidity, Profitability and the like.

It does have certain drawbacks though such as,

A firm may operate in multiple industries

When a firm is operating in multiple industries. Comparing ratios is not a simple task. Different industries record profits and costs differently and just because a ratio is held in high esteem on one company does not mean it is good in another thereby making comparison based on ratios alone quite cumbersome.

Different firms may use different accounting practices

Now if different companies use different Accounting practices, you might find that ratios cannot be straightforwardly compared because different types of figures were used by the different companies. For instance, some companies might use a Straight Line Depreciation method as opposed to a Reducing Balance method which will have varying effects on income.

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2 years ago