Answer:
The correct answer is letter "A": economists include opportunity cost in zero economic profit, while accountants do not include opportunity cost in zero profit.
Explanation:
Normal profit is an economic term that means zero economic profits. To an economist, this is normal since total revenue equals total cost which includes both explicit and implicit costs. It differs from the accounting profit or zero profits since the latter does not take into consideration implicit cost.
Answer:
$27,250
Explanation:
The computation of incremental income or loss on reworking the units is shown below:-
For computing the incremental income or loss on reworking the units first we need to follow some steps which is shown below:-
Incremental revenue per unit = Selling price after rework - Selling price as scrap
= $22.00 - $5.60
= $16.40
Total Incremental Revenue = Incremental revenue per unit × Total defective units
= $16.40 × 2,500
= $41,000
Total rework costs = Total defective units × Defects per unit
= 2,500 × $5.50
= $13,750
Now,
Incremental income or loss on reworking the units = Total Incremental Revenue - Total rework costs
= $41,000 - $13,750
= $27,250
Answer and Explanation:
The journal entry is shown below;
Cash $656,600
Factoring charges (2% of $670,000) $13,400
To Trade Receivables $670,000
(Being recording these receivables)
Here cash and factory charges is debited as it increased the assets and expense while the trade receivable is credited as decreased the assets
Answer:
WACC = ke(E/V) + Kd(D/V)
WACC = 15(0.40) + 9(0.60)
WACC = 6 + 5.4
WACC = 11.4%
Explanation:
WACC is a function of cost of equity multiplied by the proportion of equity in the capital structure plus cost of debt multiplied by the proportion of debt in the capital structure. The proportion of equity in the capital is expressed as E/V (0.40) while the proportion of debt in the capital structure is expressed as D/V (0.60).
Answer:
$1,295.03
Explanation:
To find the answer, we will use the present value of an annuity formula:
PV = A ( 1 - (1 + i)^-n) / i
Where:
- PV = Present Value of the investment (in this case, the value of the loan)
- A = Value of the Annuity (which will be our incognita)
- i = interest rate
- n = number of compounding periods
Now, we convert the 7.9 APR to a monthly rate. The result is a 0.6% monthly rate.
Finally, we plug the amounts into the formula, and solve:
75,500 = A (1 - (1 + 0.006)^-72) / 0.006
75,500 = A (58.3)
75,500 / 58.3 = A
1,295.03 = A
Thus, the monthly payments of the car loan will be $1,295.03 each month.