Comparing Costs of Credit Using Three Calculation Methods. You have been pricing a compact disk player in several stores. Three stores have the identical price of $300. Each store charges 18 percent APR, has a 30-day grace period, and sends out bills on the first of the month. On further investigation, you find that store A calculates the finance charge by using the average daily balance method, store B uses the adjusted balance method, and store C uses the previous balance method. Assume you purchased the disk player on May 5 and made a $100 payment on June 15. What will the finance charge be if you made your purchase from store A? From store B? From store C? (Obj. 2)

Answer:

The question is not complete:

Here is the complete question:

The projected benefit obligation was $460 million at the beginning of the year. Service cost for the year was $25 million. At the end of the year, pension benefits paid by the trustee were $21 million and there were no pension-related other comprehensive income accounts requiring amortization. The actuaries discount rate was 5%. The actual return on plan assets was $24 million although it was expected to be only $23 million.

What was the pension expense for the year?

Here is the answer: The pension expense is $25 million.

Explanation:

Pension is the form of defined benefit contribution plan which require employers to make certain periodic contribution on behalf of employees. This contribution is reported as an expense in the income statement if even though the benefit has not been enjoyed by the employees. To determine the value of this expenses to be included in the income statement, the components of the pension expenses are relevant.

Components of pension expense are service cost, interest cost, return on plan asset, amortization of prior service costs and gain or loss from change in asset value.

Here is the determination of the pension expense as required by the question.

                                                                            $`M

Service cost                                                          25

Interest ($460,000,000*5%)                               23

Expected return on plan asset                           (23)

Amortization of prior service costs                       -

Gain or loss in change in value                           -

Pension expense                                                 25

Answer:

The correct answer is letter "C": the supply curve for apples has shifted to the left.

Explanation:

The supply curve plots in a graph the relationship between the price and quantity supplied of a good or service. According to the supply law, that relationship is directly proportional meaning if the price rises the quantity demanded increases -the supply curve moves to the right- but if the prices fall the quantity demanded drops -the supply curve moves to the left.

Answer:

The options are

A) as small as possible; all

B) equal; all

C) equal; normal

D) maximized; all

The answer is B) equal; all

Ricky not being in a consumer equilibrium and he considering the prices prices of goods means he allocated all his income in such a way that entails his marginal utility per dollar spent is equal for all goods.

This is to ensure that he cuts cost and maximizes his spending power.

Answer:

The value of the 500 shares at the time of the purchase is $25,000 therefore $7500 had to be borrowed from the broker. With an immediate price change, we don’t need to worry about the interest rate on the loan. If the price

of Xtel stock jumps to p, say, the return on the investment, denoted rp, is given

by;

Explanation:.A) rp =

p × 500−7,500−17,500/17,500

=

500p − 25, 000/15, 000

Hence: r56 =500(56)-25,000/15,000= 28000-25,000/15,000 =20%

r50

= 500(50)-25,000/15,000= 25,000-25,000/15,000= 0%

r44 = 500(44)-25,000/15,000= 22,000-25,000/15,000= -20%

B) For a price p, the margin ratio is

500p − 7,500/500p

A margin ratio 0.3 implies that

500p − 7,500/500p= 0.3=>500p − 7,500=150p

=>p= 7500/350= 21.43

C)For a price p, the margin ratio is

500p − 12,500/500p

A margin ratio 0.3 implies that

500p − 12,500/500p= 0.3=>500p − 12,500=150p

=>p= 12,500/350= 35.71

D). Let p denote the price of Xtel’s stock at the end of the year. The return on this investment, rp, is then

rp =500p − (1.08)7,500 − 17,500/17,500=

500p − 25, 400/17,500

Thus r56= 500(56)-25,400/17,500= 14.86%

r50 = 500(50)-25,400/17,500 = -2.29

and

r44= 500(44)-25,400/17,500= -19.43%

E) For a price p, the margin ratio is then

500p − 7,900/500p

Thus a margin ratio 0.3

implies that;

500p − 5,900/500p

= 0.3 => 500p − 5,900 = 150p

=> p = 5,900/350

= 16.86