Answer:
Eliza can deduct $250 for AGI and $0 from AGI.
Explanation:
Due to the Tax Cuts and Jobs Act, a teacher can only deduct classroom expenses up to $250.
The $250 are above the line deductions that lower your adjusted gross income (AGI), while the $0 represents below the line deductions made once your total AGI has been calculated.
Suppose the economy goes from a point on its production possibilities frontier (PPF) to a point directly to the left of it. Assuming that the PPF has not shifted, this could be due to a. a gain of resources. b. a loss of resources. c. technological improvement in the production of both goods. d. a new law that interfaces with productive efficiency.
Movement from the PPF to a point directly to its left indicates a loss of resources in the economy. A gain in resources or technological improvement would shift the PPF outward, indicative of increases in production.
Explanation:The context of your question deals with the
Production Possibilities Frontier (PPF)
, an economic model that represents the trade-offs an economy can make between two items. If the economy moves from a point on the frontier to a point directly left of it, it implies there's been an inefficient use of resources, leading to less output. You can think of the leftward movement as a decrease in production. Let's break down your answer options:
A gain in resources would typically shift the PPF outward, enabling the economy to produce more of both goods. A loss of resources may cause the economy to move to a point within the PPF, as fewer resources results in reduced output. Technological advancement would also shift the PPF outward as it increases production efficiency. A new law that interfaces with productive efficiency might move the country within the PPF if it affects resource use negatively or outside the PPF if the law improves efficiency.Therefore, given the concept of PPF, a movement from the PPF to a point directly to its left would indicate a loss of resources.
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The intentional, deliberate misstatement, or omission of material facts or accounting data that is misleading and, when considered with all the information made available, that would cause the reader to change or alter his or her judgment or decision is defined by the Association of Certified Fraud Examiners as:
Answer:
Financial statement fraud
Explanation:
Financial statement fraud - it is referred to as the alternations in financial statements that are induced by the company's itself The main reason behind alternation in the financial statements is due to the mislead people dealing with finance and developed the false picture of the company's financial information.
some ways through which financial statement fraud can be done are
- by making false entries
- altering the finance statement by changing the data value
- inducing false information
What is the term used to describe the responsibility of a firm's officers and directors to ensure that adequate measures are in place to minimize the effect of a disaster on the organization's continued viability?
A. Corporate responsibility
B. Disaster requirement
C. Due diligence
D. Going concern responsibility
Answer:
A. Corporate responsibility
Officers and directors of a corporation are legally bound to practice due diligence in carrying out their operations.
A full summary of all consecutive grants, conveyances, wills, records, and judicial proceedings affecting title to a specific parcel of real estate, together with a statement of all recorded liens and encumbrances affecting the property and their present status, but not including encroachments and forgeries, is known as a(n):_______.A) Disintermediation.B) Abstract and opinion.C) Quitclaim deed.
D) Chain of title.
A chain of title is a chronological record of property ownership and encumbrances used in real estate to verify ownership history.
The correct answer is D) Chain of title.
A chain of title is a comprehensive and chronological record or summary of all the documents and transactions that have conveyed ownership or interests in a specific parcel of real estate over time. It includes all grants, conveyances, wills, deeds, mortgages, leases, and other recorded instruments that pertain to the property. The purpose of a chain of title is to establish and verify the history of ownership and any encumbrances (such as mortgages or liens) on the property.
Here's a breakdown of the components of a chain of title:
1. Consecutive Documents: This part of the chain shows how ownership or interests in the property have passed from one party to another over the years. It typically includes deeds, contracts, and wills.
2. Recorded Liens and Encumbrances: Any recorded claims or encumbrances, such as mortgages, liens, or easements, are documented in the chain of title. This information helps potential buyers or lenders understand any financial obligations or restrictions associated with the property.
3. Present Status: The chain of title also provides information on the current status of the property, such as its current owner and any outstanding liens or encumbrances.
4. Forgeries and Encroachments: While a chain of title includes most recorded information, it does not cover encroachments (physical boundary violations) or forgeries, as these may not be evident from recorded documents.
In summary, a chain of title is a vital document in real estate transactions as it establishes a property's historical ownership and any legal claims or interests associated with it. Buyers, sellers, and lenders rely on the chain of title to ensure a clear and marketable title when transferring or financing real estate.
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During _____, the strategic planning groups decide on a strategic direction by defining the company's mission and goals, its external opportunities and threats, and its internal strengths and weaknesses.
Answer:
strategy formulation
Explanation:
Strategy formulation is one of the key purposes of business and organisation meetings. The main purpose of meetings is to decide the company's direction to proceed further. It helps to attain the company's objectives and goals. In strategic formulation, strategic decisions are made to overview the opportunities, threats, weaknesses and strengths. Mostly the higher management, the board of directors and team leaders are called for such meetings.
Charles and Sarah own a home in Palm Springs, CA. During the year, they rented the house for 40 days for $5,000 and used it for personal use for 18 days. The house remained vacant for the remainder of the year. The expenses for the house included $16,000 in mortgage interest, $4,500 in property taxes, $1,000 in utilities, $1,200 in maintenance, and $9,800 in depreciation. What is the deductible loss for the rental of their home (without considering the passive loss limitation)? Use the Tax Court method for allocation of expenses.
A.$0
B. $5,000 net income
C. $17,414 net loss
D. $27,500 net loss
Answer:
Option (c) is correct.
Explanation:
Total expenses:
= mortgage interest + property tax + utilities and maintenance + Depreciation expense
= $16,000 + $4,500 + ($1,000 + $1,200) + $9,800
= $32,500
Proportionate rental expenses = $32,500 × 40 days ÷ (40 days + 18 days)
= $22,414
Rental Loss = Rental income - Proportionate rental expenses
= $5,000 - $22,414
= -$17,414
What are the advantages of using capital in the production process? What is meant by the term ""division of labor""? What are the advantages of specialization in the use of human and material resources? Explain why exchange is the necessary consequence of specialization.
Answer: First, the use of capital in the production process allows companies to increase their efficiency by producing more at a lower cost and creating a need in consumers for the consumer good. The division of labor is the fragmentation or decomposition of a productive activity in more elementary tasks, as well as its distribution among different people, according to their physical strength, ability and knowledge.
The advantages of specialization clearly are that each person has different skills in which they can specialize and learn more and in this way saves time and resources by making the work groups perform their tasks much faster.
The exchange is the necessary consequence of the specialization because for example each country will concentrate on producing what it is specialized in and is more efficient, therefore it will seek to exchange the rest of the products in which they are most ineffective.
The term "division of labor" refers to the specialization of tasks within a production process where individuals or groups focus on specific tasks they are skilled at. Specialization in the use of human and material resources ensures that resources are used most efficiently. Exchange is the necessary consequence of specialization because no single entity can produce everything it needs.
Using capital in the production process offers several advantages.
Firstly, it increases productivity by allowing for the mechanization of tasks, reducing the need for manual labor, and increasing output.
Secondly, capital can enhance the quality and consistency of products, leading to higher customer satisfaction.
Thirdly, it enables businesses to scale up their operations, reach larger markets, and remain competitive.
Additionally, capital can improve safety and working conditions for employees, contributing to their well-being.
This specialization leads to several advantages. It increases efficiency as workers become more proficient in their roles, reduces training time, and minimizes errors. It also allows for economies of scale, as production becomes more streamlined and cost-effective.
Through exchange, specialized producers trade their surplus goods and services, leading to a more diverse and efficient allocation of resources, promoting economic growth, and benefiting society as a whole.
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At which stage of the creative process does a spontaneous breakthrough occur, allowing all of the previous stages to come together to produce the " factor" or the "light bulb goes on"?
Answer:
Illumination state
Explanation:
The illumination state of the creative process gets its name from the metaphor of a light bulb coming on. It refers to someone being enlightened by a flash of creativity.
Usually creative people (inventors, artists, etc.) are illuminated when they are not actually trying to solve a problem, the term "eureka" is famous because Archimedes used it when he got a new idea for an invention.
To produce x units of a religious medal costs Upper C (x )equals 17 x plus 32. The revenue is Upper R (x )equals 25 x. Both cost and revenue are in dollars.
a. Find the break-even quantity.
b. Find the profit from 260 units.
c. Find the number of units that must be produced for a profit of $80.
Answer:
a) 4 units
b) $2048
c) 14 units
Explanation:
Break-even quantity (BEP) is the level of activity that a business must operate to make its total revenue equal to its total cost. At this point, the business makes no profit or loss. It gives an idea of the exact number of units of product to be sold in order to cover its total fixed cost.
Break-even point (BEP) is calculated as follows:
BEP (units) = Total Fixed Costs for the Period/ (SP - VC)
SP- selling price, VC- variable cost per unit
Profit : This is the excess of the total revenue over and above the total cost .
Profit = Total revenue - total cost.
Total revenue = SP × units sold
Total cost = Variable cost + Fixed cost
Total variable cost = VC per unit × units sold
The number of units t achieve a target profit is determined as follows:
Units to achieve profit = (Total fixed cost + Target profit)/(SP - VC)
Now we can apply all these concepts to our question,
From the question, VC per unit= $17, SP per unit= $25, Fixed cost = $32
a) BEP = 32/(25-17) = 4 units
b) Profit from 260 units
Profit = (25 ×260) - ((17 × 260) + 32)
= $6,500- $4,452
= $2048
c) Units to be produced to achieve a profit of $80
Units = (32 + 80)/(25-17)
= 14 units
"A Registered Investment Adviser publishes a web-based newsletter. He is approached by a marketing firm for a list of the RIA's customers. The marketing firm is not going to pay for the customer list, but has agreed to give the RIA computer equipment that will be used in publishing the RIA's newsletter. This action is:A. permitted because it directly benefits the RIA's customersB. permitted because the SEC permits the payment of ""soft dollars""C. prohibited because the computer equipment qualifies for accelerated depreciation deductions under IRS rulesD. prohibited because the RIA did not get written permission from each client to release their information"
This action is prohibited because the RIA did not get written permission from each client to release their information
Explanation:
A Registered Investment Advisor (RIA) is an entity or company that advises and maintains the portfolios of extremely wealthy individuals on securities. RIAs have a responsibility to provide financial advice that is in the best financial interest of their investors and their clients. They are also under a moral responsibility.
RIA Customer names and addresses are confidential and may not be "sold" or transmitted to another party except with written prior approval of each user. The possibility that the RIA collects computer equipment and not cash paid for providing the customer list does not impact this breach
The RIA cannot release customer information without written permission.
Explanation:The correct answer is D. Prohibited because the RIA did not get written permission from each client to release their information. As a Registered Investment Adviser, the RIA has a responsibility to protect the privacy and confidentiality of their clients' information. Releasing this information without their explicit consent would be a violation of their privacy rights.
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Businesses earn profits by converting financial, physical, and labor resources into goods and services that satisfy consumer demands. This statement is:_____A. TrueB. False
Answer:
_A. True
Explanation:
A business makes profits by selling a product or a service at a price higher than it used to acquire it. Customers will accept to buy a product at the price the seller is offering only if the product will add value to the customer. In other words, customers will spend money if the products or services they are buying is providing a solution to their need and wants.
Businesses make money by availing solutions to customer problems at a fee. The fee is the price that customers have to pay to acquire the product and service they need. By offering the product at a higher price than the cost price, a business will make some profits.
Ransdell Corporation estimates that $15,000 of the current period’s credit sales will be uncollectible. Where will these bad debts be reported in Ransdell’s financial statements?
Answer:
Bad Debts Expense of $ 15,000 in the income statement and offset of receivables by $ 15,000 in the balance sheet.
Explanation:
The portion of credit sales considered to be uncollectible will be recorded as an expense in the income statement for the period. This is usually classified as bad debts expense and appears in the income statement as a debit or expense.
The corresponding credit shall be either to an Allowance for Uncollectible accounts if a provision is made or directly as a credit to the receivables account.
In either manner the effect is to reduce the receivable in the balance sheet
_____ is the process of continually acquiring information on events occurring outside an organization to identify and interpret potential trends.A) Cause marketingB) Green marketingC) Environmental scanningD) Internal scanningE) Multicultural marketing
Answer: (C) Environmental scanning
Explanation:
The environmental scanning is one of the business strategy that helps in gathering the various types of information about the relationship and also the events in an organization.
The main aim of the environmental scanning is that it helps in manage the future direction of the organization and also maintain the customer relationship.
The importance of the environmental scanning is that it changes the environment rapidly and also helps in identifying the opportunities, strength, threats and the weakness in the business.
Therefore, Option (C) is correct answer.
Which ratio is helpful in understanding whether the relationship between cash and marketable securities is reasonable in relation to current assets or total assets?A. Lease expense/Total fixed assetsB. Total liabilities/Total assetsC. Cash/Marketable securitiesD. Current assets/Total assets
Answer:
The ratio that is helpful in understanding whether the relationship between cash and marketable securities is reasonable in relation to current assets or total assets is;
Current assets/Total assets
Explanation:
Current assets represent a portion of the total assets that can be converted into cash or marketable securities quickly. A higher Current assets to total assets helps one to know the amount of the total assets that can be liquidated fairly quickly. The current assets should be able to be converted into cash or cash equivalents within a year to be deemed as a current asset. Examples of current assets are; cash, cash equivalents, stock inventories, market securities, accounts receivable, inventories and other liquid assets.
Current assets are the exact opposite of long-term assets, since the latter represents the portion of total assets that can not be easily converted in cash and cash equivalents within a year. They usually take a much longer time to convert into cash. They are; equipment, land and buildings.
The total assets include all the assets mentioned above. The summation of currents assets and long-term assets form the total assets.
Why does manufacturing matter to your daily life, even if you don't think about it much?
A. Manufacturing industries produce everything we use.
B. Manufacturing industries transport everything we use.
C. Manufacturing industries import everything we use.
D. Manufacturing industries sell everything we use.
Answer:
A. Manufacturing industries produce everything we use.
Explanation:
The word 'Manufacturing' means production ultimately enabled by man for man.
Manufacturing is the core of the entire economic activity in a nation. Without manufacturing, there will be no service sector, whose main role is to service the manufacturing sector. Both the manufacturing and service sector are 2/3rd constituents of an economic system ( Agriculture being the third ). Hence, we can say that the economic growth of a nation is dependent on the state of Manufacturing sector in the economy.
That's why manufacturing matters to me because Manufacturing industries produce everything we use, on which the entire economy functioning depends.
The correct option is (A) Manufacturing industries produce everything we use.
Manufacturing matters to our daily lives because it produces everything we use, from clothes to electronic devices. Manufacturing creates employment opportunities and contributes to the economy. It plays a crucial role in our daily lives and society.
Explanation:Manufacturing matters to our daily lives because manufacturing industries produce everything we use. From the clothes we wear to the electronic devices we use, manufacturing is responsible for creating the products we rely on. Without manufacturing, we wouldn't have the goods and items that make our lives easier and more convenient.
For example, when you wake up in the morning and put on your clothes, those clothes were manufactured in a factory. The coffee maker you use to brew your morning coffee, the phone you use to check your messages, and the car you drive to school are all produced through the manufacturing process.
Furthermore, manufacturing industries provide employment opportunities and contribute to the economy of a country. They create jobs for people in various sectors, such as production, logistics, and maintenance. Manufacturing also helps stimulate economic growth and development.
In conclusion, manufacturing plays a crucial role in our daily lives by producing the goods we use, creating employment opportunities, and contributing to economic growth.
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____________is defined by Sage as "a system of interdependent ideas that explain and justify particular political, economic, moral, and social conditions and interests"?
Answer:
ideology
Explanation:
Ideology -
It refers to the set of values and beliefs , which the people have for the non - epistemic reasons , is referred to as the ideology.
The ideology depends on the basic assumptions not regarding any factual basis.
It is used in the system of ideas on the basis of the political and economic theories .
Hence, from the given information of the question,
The correct term is Ideology .
Suppose that an economy, producing at point A on a production possibilities frontier, produces 450 units of good X and 200 units of good Y. Also suppose that, with the same resources and technology, the economy could produce at point B, which represents 650 units of good X and 500 units of good Y?
Answer:
Productive efficiency and economic growth
Explanation:
This means the economy is able to achieve optimal combination of her productive input to achieve a maximum level of output at a lower cost.
The ability of an economy to increase the production of goods and services from the existing level of production to a higher level of output. without change in technology or increase in resources is called productive efficiency.
The technological advance reduced the amount of resources needed to produce 30
machines. These resources could be used to produce more food
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If a country's GDP decreases, but its debt increases during that year, then the country's debt to GDP ratio for the year will _______________ in proportion to the magnitude of the changes.
Answer:
Increase
Explanation:
Let us assume that GDP was $50 trillion and debt was $5 trillkon in 2018 and GDP fell to $45 trillion in 2019 and debt increased to $15 trillion. The debt to GDP ratio in 2018 is $0.1 trillion and in 2019 it is 0.3. The debt to equity ratio increased.
To form a unit investment trust, a brokerage firm buys a portfolio of securities which are deposited into a trust. The brokerage firm then sells to the public shares, or "units" in the trust, called___________.
Answer:
Redeemable Trust Certificates
Explanation:
A unit investment trust refers to money pooled from various investors which is further invested in a portfolio.
In most of the cases usually a brokerage firm acts as a sponsor to the issue which purchases a portfolio comprising of various securities deposited into the trust.
Then it issues or sells these securities to the public in the form of units. The people who subscribe or buy these securities are referred to as unit holders as the issued securities are referred to as units,
In return, the unit holders are issued redeemable trust certificates which means they can sell these securities as per their requirement. Usually a unit holder would redeem his units when the price of such units is higher than the price at which he had purchased those units.
Which of the four functions in the management process is dedicated to arranging tasks, people, and other resources to accomplish the work?
Answer:
Organizing Function of Management
Explanation:
Organizing is proper placement of men and material on the jobs. This simply involves arranging tasks, people, and other resources to accomplish the work. The entire organization is divided into separate sections. Each section requires specialized functions to be performed, which require specialized people and other resources to complete them. Proper superior subordinate relationships with matching authority and responsibility are established.
Note- Different organization sections can be marketing, finance, procurement, production and after sales etc.
Customers who are classified as true believers ________. Group of answer choices are attracted to a company's competitor's deals and offers have needs and wants that do not fit a company's offerings are not very profitable for a company tell others about their good experiences with a company are projected to be less loyal to any brand
Answer:
tell others about their good experiences with a company
Explanation:
Customers who are classified as true believers tell others about their good experiences with a company. This happens because a customer decides to try a product from a specific company and ends up having such a good experience with the product that the individual gains loyalty to that product and company, and later decides to share his/her experience.
A student has some $1 bills and $5 bills in his wallet. He has a total of 16 bills that are worth $44. How much of each type of bill does he have?
Answer:
Explanation:
Student has X amount of $1 bills and Y amount of $5 bills. At the same time, it is equal to $44 and 16 in terms of quantity. We can make an equation:
$1*X + $5*Y= $44 AND X+Y=16 ⇒ X=16-Y
16-Y+5Y=44
16+4Y=44
4Y=28
Y=7
X=16-Y=16-7=9
So, 9 bills of $1 and 7 bills of $5
Until the late 18th and early 19th centuries, most organizations were relatively small and were owned and operated as sole proprietorships or__________________.
Answer:
Until the late 18th and early 19th centuries, most organizations were relatively small and were owned and operated as sole proprietorships or partnerships.
Explanation:
After the advent of industrialization, many individuals chose to shift to mass production of commodities. These individuals set up small businesses of their own with their own capital. The ones who could not afford to start a set up with what they had entered into partnerships. As there was no concept of corporations, the trend of shared ownership among more than two persons did not exist.______________--relationships between activities. For example, one activity may not be able to start until another has finished, or perhaps one activity is dependent on another activity starting before it can finish. We'll cover several types of dependencies next.
Answer:
FINISH TO START
Explanation:
Dependencies are types of relationships between preceding & succeeding activities .
4 Types : Finish to Start, Start to Start, Finish to Finish, Start to Finish
One activity (succeeding) can start only of the another (preceding) has finished is: FINISH TO START . Eg - Food can be cooked only if all the ingredients have been bought.
Start to Start- Preceding Activity must start before Succeeding Activity can be started ; Finish to Finish- Preceding Activity must be finished before Succeeding Activity can be finished ; Start to Finish- Preceding Activity must be started before Succeeding Activity can be finished.
The _____is a personality assessment model that taps basic dimensions encompassing most of the significant variation in human personality, namely extroversion, agreeableness, conscientiousness, emotional stability, and openness to experience. A) Forte Profile B) Big Five model C) Birkman method D) Myers-Briggs Type Indicator E) Keirsey Temperament Sorter
Answer:
Big Five model
Explanation:
The Big Five model also known as the Five Factor Model (FFM) or Ocean or Canoe model is a way of grouping human behavior/traits. This behavior or traits are subject to relationship between words.
The Ocean or Canoe (OCEAN/CANOE) abbreviation is a combination of the first letters of the words of the the five(big five) traits.
Openness to experience, Conscientiousness, Extroversion, Agreeableness, emotional stability(Neuroticism). It can also be rearranged to form CANOE as well.
This five traits are also affected by the upbringing or family cultures as well. Anyone described with any of the above word is most likely to have attributes that exemplify the meaning of the words.
I hope this helps.
Final answer:
The correct answer is option B: Big Five Model.
The Big Five model is a personality assessment model that encompasses the five basic dimensions of human personality: extroversion, agreeableness, conscientiousness, emotional stability, and openness to experience.
Explanation:
The personality assessment model you have described is the Big Five model. It represents a significant approach to understand variations in human personality by identifying five broad personality traits.
These five traits are:
openness to experience, characterized by imagination and curiosity; conscientiousness, highlighting qualities like self-discipline and organization; extroversion, associated with sociability and assertiveness; agreeableness, indicating a tendency to be cooperative and pleasant; and neuroticism (also known as emotional stability), reflecting the degree of emotional stability and confidence one possesses.These traits are often remembered using the mnemonic OCEAN.
Each of these is measured on a continuum, reflecting the degree to which an individual exhibits these characteristics.
The correct answer to the question is: B) Big Five model
Energy Resources Ltd. does business in 50 countries around the world. The company stresses to all employees the importance of understanding the prevailing culture in the countries that they are doing business in. In other words, the company is aware of the importance of__________.
Answer:
cross cultural literacy
Explanation:
Understanding the prevailing culture in countries where Energy Resources Ltd. does business is important for their success.
Explanation:BusinessEnergy Resources Ltd. prioritizes understanding the prevailing culture in the countries they do business in. This is important because different cultures have unique customs, traditions, and business practices that can greatly influence negotiations, relationships, and success in those countries. By understanding and respecting the culture, Energy Resources Ltd. can build stronger partnerships, avoid potential pitfalls, and navigate the business landscape more effectively.
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Nicole owns and operates two restaurants. The revenue of the first restaurant at time t is f(t) dollars, and the revenue of the second restaurant at time t is g(t) dollars. What does the function F(t) = f(t) + g(t) represent?
A) The total revenue in dollars from both restaurants at time t.
B) The total revenue in dollars from the first restaurant at time t.
C) The total revenue in dollars from the second restaurant at time t.
D) The time t in which the total revenue of the first restaurant is greater than the second.
E) The time t in which the total revenue of both restaurants are equal.
Answer:
A) The total revenue in dollars from both restaurants at time t.
Explanation:
If the revenue from the first resutrant at time t is f(t) and the revenue from the second restaurant at time t is g(t), then the total revenue derived from both resturants at time t is the sum of both f(t) and g(t) which is equal to F(t).
I hope my answer helps you
Groups like The Free Press are lobbying the Federal Communications Committee (FCC) to oppose legislation that would make it possible for Internet service providers to charge fees that would allow large companies to pay for quicker speed online. What principle is reflected in this example?
Answer:
Net Neutrality
Explanation:
Net neutrality is the principle that providers of internet services such as Cisco and Comcast must handle all material that passes via their networks and cell towers fairly.
Which means they should not be able to maneuver such information through "fast lanes" whilst preventing other content or somehow discriminating against it.
These corporations must not be able to prevent anyone from using a platform such as Skype, or slowing down Netflix or Hulu, to persuade you to retain your cable package or purchase another video streaming service.
this set of factors that directly influences of firm and its competitive actions and responses; the threat of new entrants: the power of suppliers, the power of buyers, the threat of product substitutes, and the intensity of rivalry among competing firms.___________-
Answer:Intensity of rivalry among competing firms prices, product quality and promotional strategies.
Explanation:firms will compete with each other in the same market on Price changes,the quality of product offered and the promotional strategies and tools used to boost their revenue base.It is obvious that homogenous product will lesser will attract a higher sales than the others.Since they are trading the same item or commodity, any seller that sells below the market price will likely enjoy more sells than others and vice versa.
Another thing factor is the quality of the product.Rational buyers donnot just buy to satisfy their need but to also enjoy the durability and achieve maximum satisfaction from their patronage.Its therefore means that customer will not just buy any thing that looks the same but of a higher quality.This therefore creates rivalry between same firms.
Truck #2 has a list price of $20,000 and is acquired for a down payment of $2,500 cash and a zero-interest-bearing note with a face amount of $17,500. The note is due April 1, 2018. Culver would normally have to pay interest at a rate of 9% for such a borrowing, and the dealership has an incremental borrowing rate of 8%.
Answer:
Dr Trucks 18,555
Dr Discount on Notes Payable 1,445
Cr Cash 2,500
Cr Notes Payable 17,500
Explanation:
Since the seller accepted a zero interest bearing note, that is equivalent to making a discount. To determine the discount on the note, we have to calculate the present value of the note: discount rate is 9% and present value is $17,500
present value of the note = $17,500 / (1 + 9%) = $16,055
discount on the note = $17,500 - $16,055 = $1,445
So the purchase price of the truck would be:
$2,500 down payment + $16,055 = $18,555