User Account

All Pages

What is the total present value of Option two

Assignment Help Accounting Basics
Reference no: EM133100104

Question - A manufacturing firm purchased a heavy duty drilling machine. They were given two payment options:

Option 1: Make a payment of $46,000 immediately to settle the invoice for the machine.

Option 2: Make a payment of $22,000 immediately and the balance of $23,550 in 3 months to settle the invoice.

If money is worth 4.12% compounded quarterly, answer the following:

a. What is the total present value of Option 2?

b. Which option is economically better for the manufacturing firm?

Reference no: EM133100104

Questions Cloud

Determine the percentage return for the investment : During the time it was held, it received $200 in income. If the initial value was $3,000, determine the percentage return for the investment
What is the value of the stock today : Analysts expect that dividend to be $10.00/share and grow at a 3% rate. If the appropriate rate of return for the stock is 12%, what is the value of the stock
Prepare a reconciliation of net income for year two : Prepare a reconciliation of net income for Year 2 and shareholders' equity at December 31, Year 2, under IFRS to an ASPE basis
Maintain plans for scheduling quality assurance : Apply complex decision making to select appropriate testing techniques and Write professional level management, planning, quality assurance and testing document
What is the total present value of Option two : Option 2: Make a payment of $22,000 immediately and the balance of $23,550 in 3 months to settle the invoice. What is the total present value of Option two
Prepare journal entries for this equipment : Prepare journal entries for this equipment for the years ending December 31, 2020, and December 31, 2021, under (1) U.S. GAAP and (2) IFRS
Internal and external factors would affect glaxo smithkline : Explain in depth how each of the following internal and external factors would affect Glaxo SmithKline. Please quote your reference
Compute the annual equivalent cost of the machine : The machine has a useful life of seven years and a salvage value of $14,878. Compute the annual equivalent cost of the machine
Evaluate the relevance of god image to culture-making : What does "being made in God's image" imply about humanity's relationship to the created world and humanity's role as creators in general and creators of cultur

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Theory of interest - term structure of interest rates

Term Structure of Interest Rates

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd