A manufacturing firm wishes to give each 80 employees a holiday bonus. How much(P) is needed to invest monthly for a year at 12% nominal interest rate compounded monthly, so each employee will receive a P2500 bonus?
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- If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the next eight years, how much will be accounted for as a current portion of a noncurrent note payable each year?Now assume that it is several years later. The brothers are concerned about the firm’s current credit terms of net 30, which means that contractors buying building products from the firm are not offered a discount and are supposed to pay the full amount in 30 days. Gross sales are now running $1,000,000 a year, and 80% (by dollar volume) of the firm’s paying customers generally pay the full amount on Day 30; the other 20% pay, on average, on Day 40. Of the firm’s gross sales, 2% ends up as bad-debt losses. The brothers are now considering a change in the firm’s credit policy. The change would entail: (1) changing the credit terms to 2/10, net 20, (2) employing stricter credit standards before granting credit, and (3) enforcing collections with greater vigor than in the past. Thus, cash customers and those paying within 10 days would receive a 2% discount, but all others would have to pay the full amount after only 20 days. The brothers believe the discount would both attract additional customers and encourage some existing customers to purchase more from the firm—after all, the discount amounts to a price reduction. Of course, these customers would take the discount and hence would pay in only 10 days. The net expected result is for sales to increase to $1,100,000; for 60% of the paying customers to take the discount and pay on the 10th day; for 30% to pay the full amount on Day 20; for 10% to pay late on Day 30; and for bad-debt losses to fall from 2% to 1% of gross sales. The firm’s operating cost ratio will remain unchanged at 75%, and its cost of carrying receivables will remain unchanged at 12%. To begin the analysis, describe the four variables that make up a firm’s credit policy and explain how each of them affects sales and collections.You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
- A construction firm wishes to give each 80 employees a holiday bonus. How much is needed to invest monthly for a year at 12% nominal interest rate, compounded monthly, so that each employee will receive a P5,000.00 bonus?1. Compute the difference in the future amount of P500 compounded annually at nominal rate of 5% and if it is compounded continuously for 5 years at the same rate? 2. Compute the effective annual interest rate which is equivalent to 5% nominal annual interest compounded continuously? 3. A construction firm wishes to give each 80 employees a holiday bonus. How much is needed to invest monthly for a year at 12% nominal interest rate, compounded monthly, so that each employee will receive a P5,000.00 bonus? 4. A debt of P10,000.00 with 10% interest compounded semi-annually is to be amortized by semi-annual payments over the next 5 years. The first due is 6 months. Determine the semi-annual payments? 5. Mr. Ramirez borrowed P15,000.00 two years ago. The term of the loan is 10% interest for 10 years with uniform payments. He just made his second annual payment. How much principal does he still owe? 6. A service car whose cash price was P540,000.00 was bought with a down-payment of…A year-end bonus of $25,000 will generate how much money at the beginning of each month for the next year, if it can be invested at 6.06%, compounded monthly? (Round your answer to the nearest cent.)
- If you buy a factory for $250,000 and the terms are 20 percent down, the balance to paid off over 30 years at a 12 percent rate of interest on the unpaid balance, what are the 30 equal annual payments.?Suppose a man receives an initial annual salary of P60,000, increasing at the rate of P5,000 a year. If money is worth 10%, determine his equivalent uniform salary for a period of 8 years.Jayne Company presently pays its employees at the end of each week. The weekly payroll totals $500,000. If Jayne Company were to extend the pay period so as to pay its employees 1 week later throughout an entire year, the employees would in effect be "lending" the firm how much for the year? And if Jayne company gets a discount loan at a 12 percent interest rate. They borrow $100,000 for one year. What is the effective interest rate?