Answer:
The correct option is A
Explanation:
The direct method is one of 2 accounting treatments used in preparing cash flow statement. The statemnet of cash flows direct method uses actual cash inflows and ouflows from a company's operations instead of modifying the operating section from accural accounting to a cash basis.
Answer:
Profit= $1600
The profit which firm is generating is $1600.
Explanation:
Formula:
Profit= Total Selling Cost- Total Actual Cost
Profit= (Price at which unit is sold*Number of units) - (Average cost*Number of units)
In our case:
Number of units=800 units
Price= $6
Average cost= $4
Profit= ($6*800) - ($4*800)
Profit= ($4800) - ($3200)
Profit= $1600
The profit which firm is generating is $1600.
Answer: Micheal will earn an interest of $600 in the first year based on nominal interest rates.
Since we need to compute the interest paid out at the end of year 1, we use the following formula in order to find the interest
where
SI = Simple interest
P = Principal or initial amount invested
N = Number of years
R = Nominal interest rate
Nominal interest rate refers to the rate quoted on the CD or the rate agreed upon. In this question, the nominal interest rate is 3%.
Substituting the values in the formula above we get,
Answer:
The maximum that should be paid for the stock today is $30.23.
Explanation:
The total return on a stock is made up of dividend received on the stock plus the capital gain received from selling the stock. The holding period is one year that means a 10% return on the amount invested in required for one year. We need to calculate the present value of the total of selling price plus the dividend to calculate the price of the stock today. As 10% return is required, the discount rate is also 10%.
PV = (1.25 + 32) / 1.1
PV = 30.227 rounded off to 30.23
