<u>Answer: </u>Promissory note
<u>Explanation:</u>
Promissory note is considered to be an financial instrument that consist of the promise made by a person through a written document stating to pay a certain sum of money to another party as mentioned on the specific date or time.
Promissory note usually contains the details of indebtedness name , date, interest amount, principle amount, place of issuance and signatures of the parties involved. This instrument basically gives the information of how the party owes money to another party. this note is legally enforceable by law.
Answer:
The answer is most likely A. new producer of power tools has entered the market and is relying on low prices to attract consumers.
Explanation:
In an oligopoly, there is only a handful of companies operating in the industry and they all present similar types of goods and services (but they can differ too)
The goods and services are closedly priced in an oligopoly market. This means that the price between the goods offered by the companies in the market do not change much between the companies.
So a new manufacturerentering the market has to use a market penetration strategy and set the prices low.
Answer:
C. $160,500.
Explanation:
Depreciation: The depreciation is an expense that shows a reduction in the value of the fixed assets due to tear and wear, obsolesce, usage, time period, etc. It is shown on the debit side of the income statement. It is a non-cash item that does not affect the cash balance.
The formula to compute the depreciation expense under the straight-line method is shown below:
= (Original cost - residual value) ÷ useful life
The original cost is the purchase value of the assets
The residual value is the salvage value at the end of its useful life
Answer:
A) 10.15%
Explanation:
Cost of equity (Re) = 14.06% or 0.1406
cost of preferred stock (Rp) = 7/65 = 0.10769
cost of bonds (Rb) = 7.5% or 0.075
outstanding shares = 2.5 million shares x $42 = $105 million
bonds outstanding = $1,000 x 80,000 bonds = $80 million
preferred stock = $65 x 750,000 = $48.75 million
corporate tax rate = 38% or 0.38
total market value of equity + debt (in millions) = $105 + $48.75 + $80 = $233.75
WACC = [(outstanding shares / total market value) x Re] + [(preferred stock / total market value) x Rp] + {[(bonds outstanding / total market value) x Rb] x (1 - tax rate)}
WACC = [($105m / $233.75m) x 0.1406] + [($48.75m / $233.75m) x 0.10769] + {[($80m / $233.75m) x 0.075] x (1 - 0.38)}
WACC = 0.06316 + 0.02246 + 0.01591 = 0.10153 or 10.15%
Answer:
Interest paid in the first year = $420
Explanation:
This the an example of a loan amortization. A loan amortization is a method of loan repayment where a series of equal amount (instalment) is paid by the borrower to offset both the loan principal amount and the accrued interest over the loan period.
The interest paid in a year :
This is calculated as interest rate × loan balance at the beginning of the year
For Aunty Tilly, Interest paid in the first year will be:
= 12% × 3500
= $420
Equal Installment
The equal installment is calculaed as follows:
Equal amount = Loan Amount/ annuity factor
Annuity factor = (1 - (1 +r)^(-n))/ r
r- number of period, r- interest rate
Annuity factor = 1 - (1+0.12)^(-4)/0.12)
= 3.0373
in this question, the equal installment:
= 3500/3.0373
=$ 1152.32 (the question did not ask for this anyway)
