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Norman is considering the purchase of some investment land from his neighbor, Robin, a high school math teacher. Robin purchased the land 10 years ago for $6,000. They have agreed on the overall terms of payment of $800 every month for the next three years for a total of $28,800.
They have not agreed on how much of each payment is interest and how much is principal. Norman thought that a fair interest rate would be 8 percent with the rest of each payment allocated to principal. Robin, however, said that he wanted to ""give his neighbor a break"" and only have 4 percent designated as interest with the rest of each payment allocated to principal. What difference does it make to Norman and to Robin how much is allocated to interest versus principal if the total of the cash payments will not change? Which interest rate would be better for Norman?
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ndicate the most negative potential impacts on business operations related to these assumptions. Provide support for your rationale.
In the accounting department of Frobisher Company, a manufacturing company that produces a popular consumer product. You typically prepare the variance analysis report and present it to the management committee for their review.
Calculate the ratios for each of the 3 years - Gross profit to sales
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