explain the application of annuities with discount rates (usinf formulas)

Q: Explain receivables conversion period

A: It is the time interval connecting the sale of the last item using a credit card and cash receipts…

Q: What are the two types of discounts?

A:

Q: How do you compute the receivables turnover ratio?

A: Receivables turnover (RT) ratio: this is an accounting measure which shows the effectiveness of a…

Q: Define the term recovery allowance percentages?

A: Tax based depreciation rates are provided by the IRS and are called MACRS which is the modified…

Q: Give an example of a debt ratio?

A: Companies’ capital structure may contain debt and equity. It is not necessary for any company to…

Q: Define Interest receivable.

A: Introduction: Interest Receivable is an amount which has been earned by the person but the same has…

Q: Define the structure of interest rates and list two theories used to explain the structure.

A: Introduction Structure of interest rates: The yield curve, or term structure of interest rates,…

Q: Compare and contrast dollar returns and rates of return.

A: The returns from any investment can be calculated in terms of value (amount terms) or percentages.

Q: What are the major differences in translating liabilities between the What are the…

A: liabilities  The financial responsibilities of a business, such as money owed to suppliers, wages…

Q: What are the special forms of payment? Give examples for each.

A: Unless otherwise stated, the obligation to deliver begins when the contract is signed. The creditor…

Q: Define Times interest earned ratio.

A: Accounting Ratios: A ratio is a number expressed in terms of anther. Ratios are used by…

Q: Create simple examples to illustrate the following concepts. i. Time value of money ii. Effective…

A: i) Time Value of Money: The concept of time value of money underlines that the value of money today…

Q: Explain how the present value of an ordinary annuityinterest table is converted to the present value…

A:

Q: preparing a balance sheet, interest receivable goes under what heading?

A: Balance sheet:It is one of financial statement which shows the assets, liabilities and shareholders’…

Q: explain two functions of the credit uniom

A: A credit union is established as a not-for-profit organization (NPO). It consists of members who…

Q: Time lines can be constructed for annuities where the payments occur at either the beginning or the…

A: Time lines can be constructed for annuities where the payments occur at either the beginning or the…

Q: explain the application of compounding measures: effective or nominal / interest or discount rates,…

A: The sum that the lender demands from the borrower in addition to the principal amount is known as…

Q: Define Purchase discounts.

A: Purchase discounts: The sellers offer a reduction in purchase price on initial purchases, to…

Q: why was the discount rate included in the table?

A: Discount rate is the expected rate of return for the project value which is used to convert the…

Q: Explain the concepts of Bill Discounting

A: When a business engages in bill discounting, a financier (a bank or another financial institution)…

Q: Calulate the effective interest rate.

A: Here, Value of Note is $29,059 Simple Interest Rate is 8% Time Duration of Note is 12 months

Q: The discount rate is the combination of what two types of discounting?   a. exponential and linear…

A: Discount rates are used for discounting the future cash flows. It helps in determining the time…

Q: Explain the determinants of credit olicy variables. 2. Explain the hotives for the extension of the…

A: The important dimensions of a firm’s credit policy are credit standards, credit period, cash…

Q: Describe in detail the Stochastic Discount Factor (SDF)and its components.

A: Stochastic discount factor is defined as the concept, which has the combination of the financial…

Q: Define Trade discounts.

A: Business:   It refers to a commercial activity involving buying and selling of a product or a…

Q: Briefly explain the following a. Relation between present value and interest rate

A: Present value = Applying time value to the future cash flows using interest rates Present Value =…

Q: Give an example assuming that  the Compounding Period equals to Payment Period?

A: The representation on the basis of assumption:

Q: Define discount percentage (credit)

A: The discount rate is the amount paid on debit and credit card payments to a dealer for payment…