Answer:
The rate of return per year = 1.18%
Explanation:
We know that 52 weeks = 1 year
Investment amount = $29650
Now first find the return on investment by subtracting the purchase price from the actual value of T bills.
Return on the investment = Actual value of T bill – Purchase price
Return on the investment = $30000 - $29650 = $350
The rate of return per year = (350/29650) * 100
The rate of return per year = 1.18%
The profit earned on an investment is divided by the cost of that investment to determine the return on investment (ROI). When represented as a percentage, an investment with a profit of $100 and a cost of $100 would have an ROI of 1 or 100%.
1.18% will be the rate of return on Maxwell's investment.
GIVEN1 year = 52-weeks
Investment amount = $29650
NOTESubtract the purchase price from the real value of T bills to get the return on investment.
[tex]\text{Return on the investment = Actual value of T bill – Purchase price }[/tex]
[tex]\text{Return on the investment} = 30,000 - $29,650 = 350[/tex]
[tex]\text{The rate of return per year} = \frac{350}{29,650}[/tex] × [tex]100[/tex]
[tex]\text{The rate of return per year} = 1.18[/tex]%
Therefore, 1.18% is the computed value of the rate of return on investment.
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Sadar Company operates a store with two departments: videos and music. Information about those departments follows. Videos Departmen Music Department Sales .. $370,500 279500Cost of goods sold 320000 175000 Direct expenses Salaries 35,000 25000Maintenance. 12000 10000Utilities 5000 4500 Insurance 4200 3700The company also incurred the following indirect costs Advertising 15000Salaries 27000 Office expenses 3,200 Indirect costs are allocated as follows: advertising on the basis of sales; salaries on the basis of number of employees; and office expenses on the basis of square footage. Additional information about the departments follows. Department Square footage Number of employees Videos 5,000 3 Music 3,000 2Required 1. For each department, determine the departmental contribution to overhead and the departmental net income. 2. Should the video department be eliminated?
Answer:
Sadar Company
1. Departmental Contribution and Net Income:
Videos Department Music Department
Sales $370,500 279,500
Cost of goods sold 320,000 175,000
Contribution $ 50,500 104,500
Direct expenses:
Salaries 35,000 25,000
Maintenance 12,000 10,000
Utilities 5,000 4,500
Insurance 4,200 3,700
Indirect expenses:
Advertising 8,550 6,450
Salaries 16,200 10,400
Office expenses 2,000 1,200
Total expenses: $82,950 61,250
Net Income (Loss) $(133,450) 43,250
2. Video Department should be eliminated from the profit point of view. Its indirect costs of $26,750 can be absorbed by the Music Department.
Explanation:
a) Data and Calculations:
Videos Department Music Department
Sales $370,500 279500
Cost of goods sold 320000 175000
Direct expenses:
Salaries 35,000 25000
Maintenance 12000 10000
Utilities 5000 4500
Insurance 4200 3700
Indirect expenses:
Advertising 8,550 6,450
Salaries 16,200 10,400
Office expenses 2,000 1,200
Indirect Costs:
Advertising 15000 Sales
Salaries 27000 Number of employees
Office expenses 3,200 Square footage
Department Square footage Number of employees
Videos 5,000 3
Music 3,000 2
Indirect Costs Allocation:
Videos Department Music Department
Sales $370,500 279,500
Advertising 15000 8,550 6,450
Sales
Salaries 27000 16,200 10,400
Number of employees
Office expenses 3,200 2,000 1,200
Square footage
Product and Period Costs Identify the following costs as a product cost or a period cost for a magazine publisher: a. Sales salaries b. Paper used for the magazine c. Maintenance on printing machines d. Depreciation expense—corporate headquarters
Answer:
Explanation:
We were told to Identify the following costs as a product cost or a period cost for a magazine publisher:
PRODUCT COST are all the incurred cost during production of a service/ product till it's available to get to the consumer. This could be direct labor as well as over head.
PERIOD COST: are cost that cannot be associated to production cost such as rents, utilities cost that are required for the business.
a). SALES SALARIES
Identification: product cost
b. PAPER USED FOR THE MAGAZINE
Identification: product cost
c. MAINTENANCE ON PRINTING MACHINE
Identification: product cost
d) DEPRECIATION EXPENSES—corporate headquarters
Identification: Period cost
Payments made on a fixed annuity contract are withdrawn from the:_______
Answer:
insurance company general account
Explanation:
The insurance company general account is simply referred to as the account in which all the funds aside those exclusively defined to be separated, are deposited for the customary operation ( that is, to pay claims and benefits) of the insurance firm.
For example, funds such as premiums for life insurance, fixed annuities, assets in the fixed portfolios of variable annuities.
Hence, Payments made on a fixed annuity contract are withdrawn from the: Insurance company general account
If Bethany Lewis receives a check payable to the order of Bethanie Louis, she:______.
The available options are:
a. can indorse the check either "Bethany Lewis" or "Bethanie Louis."
b. will need to ask the drawer to send her a new check.
c. will not be able to cash the check.
d. must use a restrictive indorsement to cash the check.
Answer:
a. can indorse the check either "Bethany Lewis" or "Bethanie Louis."
Explanation:
When it comes to financial related matters, most specifically, on the issue of cheque, Indorsement is a financial related term that describes a legal signature, (often signed at the back of a cheque), which serves as a form of approval, to ensure the cheque is payable to individual aside the designated payee.
Hence, in this case, Bethany Lewis can indorse the check either "Bethany Lewis" or "Bethanie Louis."
Answer:
idek
Explanation:
lmbo
Consider the borrowing rates for Parties A and B. A wants to finance a $100,000,000 project at a FIXED rate. B wants to finance a $100,000,000 project at a FLOATING rate. Both firms want the same maturity, 5 years.
Fim Fixed Rate Floating
A $10.3% Prime + 1%
B $8.900 Prime +4%
Construct a mutually beneficial INTEREST ONLY swap that makes money for A, B, and the swap bank IN EQUAL MEASURE.
Answer:
party A will pay floating rate while party B will pay fixed rate
Explanation:
For A
Sources at floating rate = prime 1%
received fixed rate = 8.9%
For B
sources fixed rate = 8.9%
Received floating rate = prime 1%
For a mutually beneficial interest only swap that makes money for A,Band the swap bank in equal measure, the party A will pay floating rate while party B will pay fixed rate
Do you agree or disagree with the manager’s decision of when to ship goods to customers and record the revenue? Explain your reasoning. Is there an accounting rule against this practice?
Answer:
sorry
Explanation:
You are asked to compose a job description for the position of director of sales at your company. This is a position you once held, so you are familiar with the requirements and qualifications. Before beginning to write, you look in the files for past descriptions and check with your supervisor about details to include. What research method did you use in this situation?
Answer: Informal research
Explanation:
Informal research are forms of research whereby information are collected in an informal way and not through sampling precision or statistical methods. It is a cost effective strategy methods.
In this scenario, since the person knows about the requirements for the position of director of sales at the company, the person is using an informal method by asking the supervisor about details to include.
An analysis of the accounts of Roberts Company reveals the following manufacturing cost data for the month ended June 30, 2017 Inventory Beginning Ending Raw materials $9,180 $17,480Work in process 5,670 7,610 Finished goods 9,300 6,430Costs incurred: raw materials purchases $55,020, direct labor $51,740, manufacturing overhead $23,300. The specific overhead costs were: indirect labor $6,510, factory insurance $4,700, machinery depreciation $4,380, machinery repairs $1,990, factory utilities $3,740, and miscellaneous factory costs $1,980. Assume that all raw materials used were direct materials. Prepare the cost of goods manufactured schedule for the month ended June 30, 2017
Answer:
Cost of goods manufactured schedule for the month ended June 30, 2017
Raw Materials $46,720
Direct Labor $51,740
Manufacturing Overhead :
Indirect labor $6,510
Factory insurance $4,700
Machinery depreciation $4,380
Machinery repairs $1,990
Factory utilities $3,740
Miscellaneous factory costs $1,980
Add Opening Work in process Inventory $5,670
Less Closing Work in process Inventory ($7,610)
Cost of goods manufactured $119,820
Explanation:
Cost of goods manufactured schedule is a summary of manufacturing costs for the production period.
Determination of Raw Materials In Production
Raw Materials T - Account
Debit :
Opening Balance $9,180
Purchases $55,020
Totals $64,200
Credit :
Work In Process (Balancing figure) $46,720
Closing Balance $17,480
Totals $64,200
What is the urge to form and maintain personal and professional bonds called?
Answer:
The "urge to form and maintain personal and professional bonds" is called belongingness. This is the need to belong to a community. It is a basic emotional need that demands and gives attention to others, whether they are family, friends, co-workers, within residential communities, religious circles, educational, social, and professional environments.
Explanation:
Man and woman are created to be social beings who live in community with other human beings. Man and woman are not created separately. Biblically, when God created Adam, God made him man and woman. Adam was a complete human being. No wonder God made Adam to fall asleep so that He could remove the woman. It is in their unity that they can multiply. And ever since that date, both man and woman have longed to unify. "That is why they are no longer two, but one," and "What God has joined, let no man put asunder," according to Jesus Christ. This is on a personal level, where the family and common community persist.
In our professional and business life, human beings have discovered that they cannot go it alone. There is always the need for synergy. The product of synergistic relationships is always greater than the sum of our individual efforts. Belonging to a professional body, therefore, gives authenticity to our professional achievements. Forming a corporation gives authenticity and expansion to our entrepreneurial efforts. Belongingness grants a stamp of authority, provides a source of guidance, and ensures progress on all fronts.
Computers used to produce magazine articles is it land or capital
Answer:
captial
Explanation:
Land means things like natural resources, labor is the manual work force that either makes capital products or turns natural resources into a useable product to work, and capital is anything made that is used to make something else.
When computers are used to produce magazine articles the main factor of production is capital.
To an economist, capital often refers to liquid assets. In other words, it is cash on hand that may be used on either daily requirements or long-term initiatives.
Capital refers to the funds or resources utilized to launch a firm. Capital is a resource that might be money or anything in kind that is used to buy more raw materials and inputs. It is a critical component since every firm needs some initial money.
Therefore, the main factor of production is capital.
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This is an incomplete question, the complete question is:
What is the factor of production when computers are used to produce magazine articles?
True or false: Managerial accounting provides information to internal managers who make decisions about a company's business activities.
Answer:True
Explanation:
Your just deposited $2500 in a bank account that pays 4.0% nominal interest rate, compounded quarterly. If you also add another $5,000 to the account one year (4 quarters) from now and another $7,500 to the account two years (8 quarters) from now, will you have more than $17,500 in the account three years (12 quarters) from now?
Answer:
Total FV= $16,035.87
Explanation:
Giving the following information:
Deposit 1:
Investment= $2,500
Number of periods= 4*3= 12
Deposit 2:
Investment= $5,000
Number of periods= 4*2= 8
Deposit 3:
Investment= $7,500
Number of periods= 4*1= 4
Interest rate= 4% compoundes quarterly
Real interest rate= 0.04/4= 0.01
To determine the future value, we need to use the following formula on each deposit:
FV= PV*(1+i)^n
FV1= 2,500*(1.01^12)= $2,817.06
FV2= 5,000*(1.01^8)= $5,414.28
FV3= 7,500*(1.01^4)= $7,804.53
Total FV= $16,035.87
In the most basic terms, while working out the business process of production and marketing, you need to be continually prepared for?
Answer:
In the most basic terms,while working out the business process of production and marketing, you need to be continually prepared for adapting to new conditions in the market and within your organization.
how do you determine retained earnings at year end
Explanation:
The retained earnings are calculated by adding net income to (or subtracting net losses from) the previous term's retained earnings and then subtracting any net dividend(s) paid to the shareholders. The figure is calculated at the end of each accounting period (quarterly/annually.)
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External processes targeted in competing on analytics consist of:____.A. Human Resource Management.B. Customer Relationship Management (CRM).C. Enterprise Performance Management.D. Supply Chain Management (SCM).
Answer:
B. Customer Relationship Management (CRM).
Explanation:
Customer relationship management refers to managing a relationship with the customer by providing them excellent products and servcies at reasonable cost in order to build a trust, provide them maximum satisfaction so that the company could able to generate maximum share in the market place. Also it should be more focused to attain competitive advantage
Therefore according to the given situation, the option B is correct
What is the most important component in planning a special event as a way to both advocate for your programs and raise funds?
a. risk management
b. strong leadership
c. signage
d. hospitality
The prepaid insurance account had a balance of $11,700 at the beginning of the year. The account was increased for $7,800 for premiums on policies purchased during the year. What is the adjustment required at the end of the year for each of the following independent situations? For each account affected, indicate whether the account is increased or decreased, and the amount of the increase or decrease. a. The amount of unexpired insurance applicable to future periods is $11,000.
Answer:
a) The adjustments required at the end of the year for the transaction are:
Debit to Insurance Expense for $8,500 and Credit to Prepaid Insurance for $8,500.
b) For this transaction, the Prepaid Insurance account is decreased by $8,500 while the Insurance Expense is increased by $8,500.
Explanation:
a) Data and Calculations:
Prepaid Insurance $11,700
Cash account 7,800
less Prepaid, ending 11,000
Insurance Expense $8,500
An independent movie producer with a modest but loyal fan base is short of funds for her next movie. Knowing that a bank loan is an unrealistic option, she is considering crowdfunding. But she is not very familiar with it or how to go about starting and conducting a crowdfunding campaign.
Prepare a report for the producer explaining the different approaches to crowdfunding, including the equity funding approach. Alert the producer to any drawbacks that might make people less willing to contribute to funding her movie and positives that might make people more likely to fund her movie. Conclude your report with a recommendation of which crowdfunding approach you believe would be most effective for this independent movie producer.
Answer:
Crowd funding is a strategy to raise small money from a large number of people. This is mainly suitable when large funding is required for a project.
Explanation:
The filmmaker is planning to make a short web series which will be available online for the viewers. The producers might hesitate to finance such small short movie as they will be unsure whether the movie will be able to make money. There can be crowd funding option considered for raising finance for the movie. These small creators and new filmmakers should be supported as they can have better ideas than the rich filmmakers. Crowd funding will be able to raise money and people will pay for the content they want to watch. The movie will create curiosity in the audience before its release and there are high chances that this small content can be a big hit.
The following is a December 31, 2021, post-closing trial balance for Almway Corporation.
Answer:
TOTAL ASSETS $1,043,000
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY $1,043,000
Explanation:
Preparation of a balance sheet for the Almway Corporation at December 31, 2021.
ALMWAY corporation
Balance sheet at December 31,2018
ASSETS
Current Assets
Cash and cash equivalent$47,000
($79,000-$32,000)
Short term investment $97,000
($144,000-$47,000)
Account receivable net of allowances $77,000
Inventories $217,000
Prepaid insurance $5,000
TOTAL CURRENT ASSETS $443,000
INVESTMENT
Marketable securities $47,000
Land held for sale $42,000
Restricted cash $32,000
TOTAL INVESTMENT $121,000
Plant property and equipment
Land $82,000
($124,000-$42,000)
Building $437,000
Accumulated deperation Building ($117,000)
Equipment $127,000
Accumulated deperation Equipment ($77,000)
NET PLANT PROPERTY AND EQUIPMENT $452,000
INTANGIBLE ASSETS
Patents ( net of amortization) $27,000
TOTAL ASSETS $1,043,000
LIABILITIES AND STOCKHOLDERS EQUITY
Current liabilities
Account payable $109,000
Interest payable $37,000
Note payable due in 6 months $47,000
Current maturity of long term debt notes payable $13,400
TOTAL CURRENT LIABILITY $206,400
LONG TERM LIABILITIES
Notes payable $120,600
($181,000-$47,000-$13,400)
Bond payable $257,000
TOTAL LONGTERM LIABILITIES $377,600
SHAREHOLDER EQUITY
Authorised 500,000 shares
Issued and outstanding shares $351,000
Retained earnings $108,000
Total shareholders equity $459,000
TOTAL LIABILITIES AND SHAREHOLDERS EQUITY $1,043,000
Which of the following is most associated with managerial accounting?a. must follow GAAPb. may rely on estimates and forecastsc. is prepared for users outside the organizationd. balways reports on the entire entity
Answer:
b. may rely on estimates and forecasts
Explanation:
Managerial accounting involves not only financial information, it might also include information about production processes, customer satisfaction, etc. E.g. defective units, budgeted production output, % of closed sales, etc. Managerial accounting is used by management to supervise and control how the company is operating, not necessarily if it is making a profit or not.
If the price elasticity of demand for a product is 1 in absolute value, and the price elasticity of supply of the same product is 1, what is the predicted percent change in price from a 1 percent increase in demand?
Answer:
a 1% decrease in price
Explanation:
Price elasticity of demand measures the responsiveness of quantity demanded to changes in price of the good.
Price elasticity of demand = percentage change in quantity demanded / percentage change in price
Demand is unit elastic if a small change in price has an equal and proportionate effect on quantity demanded
Unit elastic demand = percentage change in quantity demanded / percentage change in price = 1
According to the law of demand, the higher the price, the lower the quantity demanded and the lower the price, the higher the quantity demanded.
It follows that if price increases by 1%, quantity demanded would fall by 1% since demand is unit elastic
A.The loss on the cash sale of equipment was $4,375 (details in b).B. Sold equipment costing $97,875, with accumulated depreciation of $47,125, for $28,625 cash.C. Purchased equipment costing $113,375 by paying $64,000 cash and signing a long-term note payable for the balance.D. Borrowed $5,700 cash by signing a short-term note payable.E. Paid $58,625 cash to reduce the long-term notes payable.F. Issued 4,200 shares of common stock for $20 cash per share.G. Declared and paid cash dividends of $53,500.Prepare a complete statement of cash flows; report its operating activities using the indirect method.
Answer:
Cash Flow Statement
Cash flow from Operating Activities
Adjustment for Non - Cash items :
loss on the cash sale of equipment $4,375
Adjustment for Working Capital items :
Increase in short-term note payable $5,700
Net Cash from Operating Activities $10,075
Cash flow from Investing Activities
Proceeds from sale of equipment $28,625
Purchase of Equipment ($64,000)
Net Cash from Investing Activities ($35,375)
Cash flow from Financing Activities
Repayment of the long-term notes payable ($58,625)
Issue of Common Stocks $84,000
Dividend Paid ($53,500)
Net Cash from financing Activities ($28,125)
Movement During the Year ($53,425)
Explanation:
The Indirect method reconciles the Operating Profit to the Cash Flow from Operating Activities by adjusting the following items, (1) Non-cash items previously included or deducted from the Operating Profit and (2) Changes in Working Capital items.
A(n) _____ refers to a product or service, such as a report, a training session, a piece of hardware, or a segment of software code, produced or provided as part of a project.
________ can be categorized as popularity, relevancy, and user satisfaction. a. Mobile search SEO b. Ranking factors c. SERP d. Web analytics
Answer:
b. Ranking factors
Explanation:
Ranking factors are used to try to rank or determine which websites are better in certain fields or factors. E.g. which sites rank in top on mobile friendliness. It is just a way to classify websites or apps and categorize them. Another e.g., which apps rank in top in user experience. Companies can use these ranking factors and their results as benchmarks on what they can do to improve.
The unadjusted trial balance of the Manufacturing Equitable at December 31, 2011, the end of its fiscal year, included the following account balances. Manufacturing�s 2011 financial statements were issued on April 1, 2012.
Accounts receivable $ 92,500
Accounts payable 35,000
Bank notes payable 600,000
Mortgage note payable 1,200,000
Other information:
a. The bank notes, issued August 1, 2011, are due on July 31, 2012, and pay interest at a rate of 10%, payable at maturity.
b. The mortgage note is due on March 1, 2012. Interest at 9% has been paid up to December 31 (assume 9% is a realistic rate). Manufacturing intended at December 31, 2011, to refinance the note on its due date with a new 10-year mortgage note. In fact, on March 1, Manufacturing paid $250,000 in cash on the principal balance and refinanced the remaining $950,000.
c. Included in the accounts receivable balance at December 31, 2011, were two subsidiary accounts that had been overpaid and had credit balances totaling $18,000. The accounts were of two major customers who were expected to order more merchandise from Manufacturing and apply the overpayments to those future purchases.
d. On November 1, 2011, Manufacturing rented a portion of its factory to a tenant for $30,000 per year, payable in advance. The payment for the 12 months ended October 31, 2012, was received as required and was credited to rent revenue.
Required:
(1) Prepare any necessary adjusting journal entries at December 31, 2011, pertaining to each item of other information (a�d).
(2) Prepare the current and long-term liability sections of the December 31, 2011, balance sheet.
Answer:
1. A.
Dec 31
DR Interest Expense ...............................................$25,000
CR Interest Payable ..................................................................$25,000
(To record interest payable on bank notes for the year)
Working
= 10% * 600,000
= $60,000 per year
August to December 5 months
= 60,000/ 12 months * 5
= $25,000
B. No entry required. Payment of $250,000 shall be considered short term liability as it is to be paid in less than a year. The $950,000 shall be a long term liability.
C.
Dec 31,
DR Accounts Receivable...............................................$18,000
CR Advance from Customers.......................................................$18,000
D.
Dec 31,
DR Rent Revenue ............................................................$25,000
CR Rent received in advance.........................................................$25,000
Working
Rent is $30,000 from the tenant starting November 1 which means rent needs to be apportioned to 2 months in 2011.
= 30,000/12 moths * 2
= $5,000
Rent to be recorded as received in advance;
= 30,000 - 5,000
= $25,000
2.
..................................Liabilities as at December 31, 2011............................
Current Liabilities
Accounts Payable ......................................................$35,000
Current Portion of debt .............................................$250,000
Advance from Customers.........................................$18,000
Accrued Interest payable..........................................$25,000
Unearned rent revenue.............................................$25,000
Bank notes payable....................................................$600,000
Total................................................................................$953,000
Long Term Liabilities
Mortgage Note Payable ............................................$950,000
Total .................................................................................$950,000
when rival firms compete aggressively by trying to attract competitors' customers, this might be an indication of:
Answer:
Slow industry growth
Explanation:
Slow industry growth is the growth that shows the industry at a slow rate or no growth is there.
It could arise when the consumer does not opt for a high demand
In the given situation, it is mentioned that when competitive firms aggressively trying to attract the customers of competitors so this is an indication of the slow economic growth and hence, the same is to be considered
for every decision you make, there is a trade off?
Answer:
False
Explanation:
i took the test
The following information is for S&P Enterprises for the month of July: Direct materials $76,000 Direct labor $40,000 Variable manufacturing overhead $25,000 Fixed manufacturing overhead $30,000 Variable selling expense $12,000 Fixed selling expense $15,000 Variable administrative expense $6,000 Fixed administrative expense $18,000 Total conversion cost for the month of July was:_______________.
Answer:
Conversion costs= $95,000
Explanation:
Giving the following information:
Direct labor $40,000
Variable manufacturing overhead $25,000
Fixed manufacturing overhead $30,000
The conversion costs are the sum of direct labor and total manufacturing overhead.
Conversion costs= 40,000 + (25,000 + 30,000)
Conversion costs= $95,000
Bringham Company issues bonds with a par value of $540,000 on their stated issue date. The bonds mature in 6 years and pay 9% annual interest in semi-annual payments. On the issue date, the annual market rate for the bonds is 12%.
1. What is the amount of each seml-annual Interest payment for these bonds?
2. How many semi-annual Interest payments will be made on these bonds over their Iife?
3. Use the Interest rates gven to select whether the bonds are Issued at par, at a discount, or at a premlum.
4. Compute the price of the bonds as of their issue date.
5. Prepare the Journal entry to record the bonds' Issuance.
Answer:
1. $24,300
2. 12
3. the bond is trading at a discount.
4. $470,090.86
5. Journal Entry
Cash $470,090.86 (debit)
Bond Payable $470,090.86 (credit)
Explanation:
1. seml-annual Interest payment
Seml-annual Interest payment = ($540,000 × 9 %) ÷ 2
= $24,300
2. Number of seml-annual Interest payment
Number of seml-annual Interest payment = 6 years × 2
= 12
3. Issue
The annual market rate for the bonds (YTM) , 12% is greater than the coupon rate of the bond 9%.
The Price will be less than the par value and we say that the bond is trading at a discount.
4. Computation of the Issue Price, PV
PMT = $24,300
n = 12
YTM = 12 %
FV = $540,000
p/yr = 2
PV = ?
Using a Financial Calculator, the Issue Price, PV is $470,090.86
5. Journal Entry
Cash $470,090.86 (debit)
Bond Payable $470,090.86 (credit)
The chart compares transportation options. Option A to buy new has a monthly payment of 338 dollars for 60 months, up-front cost of 2,500 dollars, and 275 dollars a month for insurance and gas. Option B to lease new has a monthly payment of 229 dollars for 36 months, up-front cost of 3,925 dollars, and 275 dollars a month for insurance and gas. Option C to buy used has a monthly payment of 250 dollars for 36 months, up-front cost of 2,000 dollars, and 225 dollars per month for insurance and gas. What is a main disadvantage of leasing a vehicle compared to buying a vehicle? the up-front cost the monthly payments the length of payments the cost of insurance and gas
Answer:
Explanation:
The up- front cost
The main disadvantage of leasing a vehicle compared to buying a vehicle is A. the up-front cost.
What is an up-front cost?An up-front cost is a down payment that is required to be made when making an asset purchase transaction.
The up-front cost is usually calculated using an agreed or fixed rate.
For example, a seller of a vehicle may demand an up-front or down payment of 10%.
The up-front cost or down payment reduces the outstanding loan.
Data and Calculations:Options Monthly Maturity Up-front Insurance Total
Payments Period Cost and Gas Costs
Option A to buy new $338 60 months $2,500 $275 $39,280
Option B to lease $229 36 months $3,925 $275 $22,069
Option C to buy used $250 36 months $2,000 $225 $19,100
Thus, the main disadvantage of leasing a vehicle compared to buying a vehicle is A. the up-front cost.
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