Question
In: Economics
An Engineering company is reporting income of $30,000 for the first quarter, income of $32,000 for...
An Engineering company is reporting income of $30,000 for the first quarter, income of $32,000 for the second quarter, and income increasing by $2,000 each quarter through year four. What is the equivalent uniform amount per quarter if the interest rate is 3% per quarter?
Solutions
Expert Solution
Initial Income in the first quarter = $30,000
Increase in income in each subsequent quarter = $2,000
Therefore, the given income flow can be broken down into a uniform quarterly income of $30,000 and a gradient series with G = $2,000
Interest rate = 3% per quarter
Number of compounding periods, n = 4 years = 4 * 4 quarters = 16 quarters
Equivalent uniform quarterly income = $30,000 + $2,000(A/G, 3%, 16)
From the compound interest factor table, we obtain
(A/G, 3%, 16) = 6.874
Equivalent uniform quarterly income = $30,000 + $2,000 * 6.874 = $43,748
Ans: Equivalent uniform amount per quarter = $43,748
Rahul Sunny answered 2 years agoRelated Solutions
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2019
Cash
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$32,000
Accounts receivable
20,500
12,950
Inventory
42,000
35,000
Prepaid rent
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12,000
Prepaid insurance
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Building &Equipment
875,000
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Patents
45,000
50,000
Total assets
918,600
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Accounts payable
22,000
32,000
Income taxes payable
5,000
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Wage payable
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Johns Company's Comparative balance sheet and income statement are presented below. 2020 2019 Cash $30,000 $32,000...
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are presented below.
2020
2019
Cash
$30,000
$32,000
Accounts receivable
20,500
12,950
Inventory
42,000
35,000
Prepaid rent
3,000
12,000
Prepaid insurance
3,100
1,650
Land
125,000
125,000
Building
&Equipment
875,000
800,000
Accumulated Dep.-building
&equipment
(225,000)
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Patents
45,000
50,000
Total
assets
918,600
869,100
Accounts payable
22,000
32,000
Income taxes payable
5,000
4,000
Wage payable
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Long-term notes
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Bonds payable
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