As of January 1, 2011, there are 28 annual payments left on Smith's loan. The next payment is due January 1, 2012. The payment schedule consists of 5 payments of $1,000 each, followed by 23 payments of $2,000 each. The effective annual rate of interest is 5%. The lender agrees to let Smith pay off the loan with five annual payments, commencing January 1, 2012. The amount of these payments are K, 2K, 3K, 4K, and 5K respectively. Under the new arrangement, the lender still realizes an effective annual yield of 5%. In which of the following ranges is K? a. < $1,850
b. ≥ $1,850 but < $1,900
c. ≥ $1,900 but < $1,950
d. ≥ $1,950 but < $2,000
e. ≥ $2,000

Shrieves casting company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by sidney johnson, a recently graduated mba. the production line would be set up in unused space in the main plant. the machinery’s invoice price would be approximately $200,000, another $10,000 in shipping charges would be required, and it would cost an additional $30,000 to install the equipment. the machinery has an economic life of 4 years, and shrieves has obtained a special tax ruling that places the equipment in the macrs 3-year class. the machinery is expected to have a salvage value of $25,000 after 4 years of use. the new line would generate incremental sales of 1,250 units per year for 4 years at an incremental cost of $100 per unit in the first year, excluding depreciation. each unit can be sold for $200 in the first year. the sales price and cost are both expected to increase by 3% per year due to inflation. further, to handle the new line, the firm’s net working capital would have to increase by an amount equal to 12% of sales revenues. the firm’s tax rate is 40%, and its overall weighted average cost of capital, which is the risk-adjusted cost of capital for an average project (r), is 10%. define “incremental cash flow.” (1) should you subtract interest expense or dividends when calculating project cash flow?

As related to a company completing the purchase to pay process, is there an accounting journal entry "behind the scenes" when xyz company pays for the goods within 10 days of the invoice (gross method is used for discounts and terms are 2/10 net 30) that updates the general ledger?

One of your new suppliers, kim, has been hearing rumors about your firm’s lack of capability to deliver high quality products and writes an email asking you to address the claims being made. in replying to her, you want to be sure that you are very clear and leave no room for misinterpretation. which of the following aspects of effective communication should you give the most attention? (a) making sure you understand kim’s areas of expertise. (b) supporting your reply with relevant data and facts. (c) establishing your credibility as an expert. (d) paying attention to implied communications.