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Harrizon [31]
2 years ago
12

A-2-Z Design Services engaged in the following significant activities during the year: The company issued common stock for $250,

000. Management expects to use the proceeds to purchase land next year. A new office building was purchased by issuing a $700,000 long-term note payable to the seller. A-2-Z acquired equipment from one of its suppliers. In exchange, A-2-Z offers to provide design services to its supplier over the next two years. The services are valued at $90,000. Determine the impact of each transaction on cash flows from investing and financing activities in the current year.
Business
1 answer:
Wittaler [7]2 years ago
7 0

Answer:

The company issued common stock for $250,000. Management expects to use the proceeds to purchase land next year.

  • Cash flows from financing activities increased by $250,000. Cash flows from investing activities are not affected during this year (they should decrease next year).

A new office building was purchased by issuing a $700,000 long-term note payable to the seller.

  • Cash flows from financing activities increased by $700,000. Cash flows from investing activities decrease by $700,000.

A-2-Z acquired equipment from one of its suppliers. In exchange, A-2-Z offers to provide design services to its supplier over the next two years. The services are valued at $90,000.

  • Cash flows from financing and investing activities are not affected since this transaction is part of operating activities.
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Answer:

More than $1500 price per car per month has to be dropped.

Explanation:

Given:

price per car = $20,000

car sale per month = 40

rate of increase in demand = 3

Solution:

Revenue R = Price × Quantity = P * Q

From the above given data

P = 20,000

Q = 40

R = P*Q

dQ/dt = 3

We have to find the rate at which the price is to be dropped before monthly revenue starts to drop.

R = P*Q

dR/dt = (dP/dt)Q + P(dQ/dt)  

          = (dP/dt) 40 + 20,000*3 < 0

          = (dP/dt) 40 < 60,000

         = dP/dt < 60000/40

         = dP/dt < 1,500

Hence the price has to be dropped more than $1,500 before monthly revenue starts to drop.

3 0
2 years ago
Read 2 more answers
If an investor purchases $1,000 face amount of an 8% corporate bond at 93. The bond is scheduled to mature in 2028. What will ha
sdas [7]

Answer:

The amount to be paid is $100,440

Explanation:

When the bond matures, it is the due date on which the bond issuer need to pay off the bond on that particular date.

In this case, the bond matures in 2028, so

Interest amount = Face value of bond × Price × Interest

= $1,000 × 93 × 8%

= $7,440

The amount to be paid on maturity will be:

= $7,440 + $93,000

= $100,440

7 0
2 years ago
When SW International declared a dividend of $20,000,000, its market value increased from $8 billion to $8.5 billion. However, i
Studentka2010 [4]

When SW International declared a dividend of $20,000,000, its market value increased from $8 billion to $8.5 billion. However, it lost a chance to reinvest $20,000,000 in the research and development of a new product which would have earned a profit of $200 million. Thus, this $200 million is referred to as SW International's-T<u>his is the Opportunity cost of the S.W international</u>

<u />

Explanation:

The term opportunity cost refer to the profit  that is given up to achieve another thing.

Lets consider the example in this we can analyse the fact that SW international made an alternative choice of declaring the dividend rather than utilizing the money in R&D for a new project .Thus the amount $20,000,000 is forgone in order to achieve the $ 85 million market value.

<u>Thus the $200 million is referred to as the Opportunity Cost.</u>

6 0
2 years ago
Regression analysis models helped Avon realize that employee benefits and the appointment fee that representatives pay for mater
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Answer:

False

Explanation:

Correlation tells you if there is association between two or more variables. Regression analysis model allow you to predict one variable from the other.

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2 years ago
On June 30, 2019 Martin Corp.’s balance sheet included a 10%, $3,000,000 note payable. The note is dated October 1, 2017, and is
stellarik [79]

Answer:

$225,000

Explanation:

Data provided in the question:

Note payable = 10%, $3,000,000

Payment amount = $1,000,000

Now,

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Therefore,

Duration from October 2018 to October 2019 = 9 months = \frac{9}{12} years

Therefore,

Interest payable for 2019 will be = $3,000,000 × 0.10 × \frac{9}{12}

= $225,000

4 0
2 years ago
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