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invetment MM offers one intrest payment of 20% at the end of its four year life. what is the annual efffective intrest rate offered?..i dont know how to account for the 4 year life…the answer shown does not give a complete formulae..it says 1.20^0.25..help me.
Have you watched the lectures on interest?
If the interest is R per year, then $100 invested for 4 years will grow to 100 x (1+R)^4
This must be equal to 100 x 1.20.So 100 x (1+R)^4 = 100 x 1.20
(1+R)^4 = 1.20
1+R = fourth root of 1.20 (1.20^0.25 is simply another way of writing fourth root of 1.20)
thank you.
Absorption costing.
i failed to post a new thread, so am posting under this very one.Direct materials 6.00
Direct labour 7.50
Variable overhead 2.50
Fixed overhead absorption rate 5.00
21.00
Profit 9.00
Selling price 30.00
Budgeted production for the month was 5,000 units although the company managed to produce 5,800 units,
selling 5,200 of them and incurring fixed overhead costs of $27,400.
9.4 What is the marginal costing profit for the month?Mr john, I have watched your free lectures, but how come 5200 units were used to calculate fixed cost? 5200X$5= $26,000. is the $26000 selling fixed cost? shouldn’t it be 5800units X$5=$29000
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