The machine's net present value is $3,481. The net present value is a method of calculating the present value of return of an investment either in capital purchases or projects. The net present value amount is acquired by subtracting the $ 37,000 initial investment from the net present value of $12,000 net cash flow for four years plus the present value of $1000 salvage value at the end of the 4th year.
Net Present Value = Present value of net cash flow + Present value of salvage value - Initial investment
$3,481 = $39,746 + $735 - $37,000
Answer:
C) As an other financing source in the debt service fund and as an other financing use in the capital projects fund.
Explanation:
The options are missing:
- A) As a revenue in the debt service fund and as an expenditure in the capital projects fund.
-
B) As an other financing source in the capital projects fund and as an other financing use in the debt service fund.
-
C) As an other financing source in the debt service fund and as an other financing use in the capital projects fund.
-
D) As a special item in both the debt service and capital project funds.
Other financing sources is an account used by governments to record non-operating revenues and expenditures. The debt service fund is the money that the government has set aside to pay for its outstanding bonds. The capital projects fund is the account used by the government to record expenses related to certain projects.
Answer:
a. positive, so Joan considers hamburger to be an inferior good.
Explanation:
Income elasticity is a microeconomic concept that aims to measure the sensitivity of demand in the face of income changes. To calculate the Income elasticity , a formula is used that divides the observed percentage change in quantity (Q) by the percentage change in price income (P): Elasticity = ▲ Q / ▲ P
The percentage change in quantity (▲ Q) and the percentage change in price (▲ P) are calculated by the difference in quantity / price in the two periods divided by the quantity / price of the first period.
▲ Q = (60 -50/60) = 0,16
▲ Q = (40.000 - 30.000/40.000) = 0,25
Elasticity = ▲ Q / ▲ P = 0,16/0,25 = 0,64
Therefore, the elasticity is positive.
This good is considered inferior, because according to microeconomic theory, inferior goods are those whose demand increases when consumer income decreases. This is the opposite of the normal good, which has its demand increased when income increases.
Answer:
The $600,000 amount is required to financing so that the cash conversion cycle can be supported
Explanation:
For computing how much financing is required, first we have to compute the cash conversion payable which is shown below:
Cash conversion cycle = Average age of inventory + Average collection period - average payment period
= 65 + 60 - 65
= 60 days
Now, we have to apply the financing formula which is shown below:
= Firm total annual outlays for operating cycle investment × cash conversion cycle ÷ total number of days in a year
= $3,650,000 × 60 days ÷ 365
= $3,650,000 × 0.16438
= $600,000
Hence, the $600,000 amount is required to financing so that the cash conversion cycle can be supported
