A company\'s Inventory balance at the end of the year was $197,000 and $210,000
ID: 2596269 • Letter: A
Question
A company's Inventory balance at the end of the year was $197,000 and $210,000 at at the beginning of the year. Its Accounts Payable balance at the end of the year was $94,000 and $89,000 at the beginning of the year, and its cost of goods sold for the year was $730,000. The company's total amount of cash payments for merchandise during the year equals:
a. 712,000
b.748,000
c. 738,000
d. 730,000
e. 722,000
A company issued 11%, 5-year bonds with a par value of $120,000. The market rate when the bonds were issued was 12%. The company received $115,585 cash for the bonds. Using the effective interest method, the amount of interest expense for the first semiannual interest period is:
a. 6,935.10
b. 7,200.00
c. 6,600.00
d. 13,870.20
e. 13,200.00
A company is considering investing in a project that is expected to return $270,000 four years from now. How much is the company willing to pay for this investment if the company requires a 10% return? (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)
a. 17,591
b. 184,410
c. 227,749
d. 99,666
e. 270,000
Cody invests $3,800 per year from his summer wages at a 4% annual interest rate. He plans to take a European vacation at the end of 4 years when he graduates from college. How much will he have available to spend on his vacation?
a. 16136.70
b. 16440.32
c. 14,592.00
d. 15,808.00
e. 15,200.00
Thank you very much :D
Explanation / Answer
A company's Inventory balance at the end of the year was $197,000 and $210,000 at at the beginning of the year. Its Accounts Payable balance at the end of the year was $94,000 and $89,000 at the beginning of the year, and its cost of goods sold for the year was $730,000. The company's total amount of cash payments for merchandise during the year equals:
b.
Cash payments during the year = increase in inventory +reduction in payables + CoGS = 13000+5000+730,000 = $ 748,000
A company issued 11%, 5-year bonds with a par value of $120,000. The market rate when the bonds were issued was 12%. The company received $115,585 cash for the bonds. Using the effective interest method, the amount of interest expense for the first semiannual interest period is:
a.
Effective interest (interest expense) for the first six months = 115,585 x .12 x 6/12 = 6935.1
A company is considering investing in a project that is expected to return $270,000 four years from now. How much is the company willing to pay for this investment if the company requires a 10% return?
b.
Company should invest the Present value of the cash inflow from the project in 04 years at the discount rate of cost of capital :
PV = FV/(1+.10)4 = $270,000/(1.1)4 = $ 184,410
Cody invests $3,800 per year from his summer wages at a 4% annual interest rate. He plans to take a European vacation at the end of 4 years when he graduates from college. How much will he have available to spend on his vacation?
a
The amount compounded after 4 years in the future value of the annuity of 3800 at 4% interest rate
= 3800 (F/A,4%4) = 16,136.7
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