C) The answers are different because if the interest is left untouched, it makes the principal amount higher each year, giving more money after 10 years. Compounded interest allows for more money that simple interest would. 2. A) If the individual retires at the age of 65, having started the program at age 40, there would be $219,318 in the account. $3,000 x (8% in 25 years) 3000 x 73.106 = $219,318 B) If
As seen on the income statement by accounts receivable and annual credit sales Amazon was able to decrease the amount of days it took to collect on accounts receivable. The financial state of Amazon at this point of review, as some concerns with common stock outstanding, this led to the period in which the income statement shows a $-39 million dollar on net income. In 2012 sales did increase only due to more electronic transactions, new innovative Internet transactions and the rise in shipping costs, due to this there was a significant rise in prices of the products that Amazon sells. In 2013 Amazon must increase net income and retained earnings in order to continue to be a successful corporation.
c. increases public saving but reduces national saving. d. reduces private saving, but increases national saving. 2. If the current market interest rate for loanable funds is below the equilibrium level, then there is a a. surplus of loanable funds and the interest rate will fall. b. shortage of loanable funds and the interest rate will fall.
Financial Analysis * The tax rate is approximately 30% 5.618.8=29.79% 5.418.1=29.83% 5.418=30% * Based on the industry average, a sports store of similar size should be making around $21000 or 67% more profitable than Rhodes’ store. * Assuming the lots are of the same size and bear the same tax burden, if the unused lot is sold off property taxes would be reduced by $6000 at the 2008 rate. All else being equal, this would increase net profit by 6000×0.30=$1800, for a total of $14400. Profit as a percentage of sales would increase from 2.1% to 2.4%. * Of the $18400 Rhodes made in mortgage payments last year, $8000 was interest.
If the sales outlook for the coming three years was only 20,000,000 and B.E. continued producing at the rate of 30,000,000 units, a total of 10,000,000 units would be dumped into ending inventory at the end of each year once again reducing costs of goods sold and falsely increasing income. By the end of year 2013, B.E. Company would have 35,000,000 units sitting in ending inventory taking up space and costing money to store. Once again if the president’s bonus is based off of net income, this situation is the most favorable for a high paying bonus and encourages stockpiling inventory to inflate net income.
A 6% increase in Electricity costs. 1. A 2.5% increase in material cost When the material costs increases, the affect will occur on the master budget. The 2.5 % increase on the material cost means we will be paying more; as a result the profit will be less, unless we increase the selling price, reduction of employees (redundancy), to cover the change. Here below are show the calculation of the change: Material cost is 50355.15 2.5% of 50355.15 = 50355.15x 2.5 = 1258.87 100 The new material cost is = 50355.15 + 1258.87 =
Therefore, the recommendation project which have higher rate of return than 25% is project B. 3.3 Net Present Value Project A Year | 11% Col. | Net Cash Inflow | Present Value of Net Cash Inflow | 1 | 0.901 | 7,500 | 6,757.5 | 2 | 0.812 | 7,750 | 6,293 | 3 | 0.731 | 8,000 | 5,848 | 4 | 0.659 | 7,750 | 5,107.25 | 5 | 0.593 | 7,500 | 4,447.5 | Total PV of Net Cash Inflow = $28,453.25 Less Investment =
FIN 340 - Fall 2014 Practice Exam Name: 1) The order of line items included in the Statement of Retained Earnings is as follows: a) Beginning RE, Dividends, Ending RE, NI b) Beginning RE, Depreciation, NI, Ending RE c) Beginning RE, NI, Dividends, Ending RE d) Beginning RE, NI, Depreciation, Ending RE 2) Playboy Inc. stated that its sales were the same as last year’s, except the cost of goods sold dropped 30%. The net cash flow had declined for some reason. What could be a possible reason for this decrease in net cash flow? a) The company’s depreciation expense increased. b) The PP&E had increased from the purchase of a new less expensive printer.
Capital is mobile: when it is taxed heavily here, it flees somewhere else, meaning lower investment and employment in the United States, and because capital income taxes discourage investment or drive it overseas, they generate little if any tax revenue. Bush's tax cut substantially increased economic growth, boosted the stock market, and increased business investment. The jewel of Bush tax plan was the elimination of the dividend tax on individuals. Another key economic growth provision of the tax plan was the acceleration of income tax rate reductions. According to economic experts, if fully implemented, the Bush tax cut would increase stock values immediately by 5% to 15% and would reduce the cost of capital for businesses by 10% to 30%, depending on the industry.
Head Start suffered a cut of more than $10 million for the Head Start program affected for the 2008 Fiscal Year. The 2008 funding cut to Head Start means that programs will experience a decline in federal support by 11% since 2002. Federal support for Head Start kept a pace with the rise of inflation during this period. The budget rose from $6.54 billion in the fiscal year of 2002 to $7.77 billion for the fiscal year 2008. If Head Start programs received their full allocated monies from the ACF’s proposed 2009 budget increase, then programs would still operate in a negative stage by $923 million.