A landscaping firm has quoted a price of $10,500 to fix up Sally's back yard. Five years she put $7,500 into a home improvement account that has earned an average of of 6% per year (annual compounding). Does Sally have enough in this account to pay for the landscaping? Multiple Choice No There is not enough information given to solve this problem Yes Maybe

A landscaping firm has quoted a price of $10,500 to fix up Sally's back yard. Five years she put $7,500 into a home improvement account that has earned an average of of 6% per year (annual compounding). Does Sally have enough in this account to pay for the landscaping? Multiple Choice No There is not enough information given to solve this problem Yes Maybe

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 4PA: Ken Owens Construction specializes in small additions and repairs. His normal charge is $400/day...

See similar textbooks

Similar questions

A home improvement firm has quoted a price of $9,800 to fix up Eric's backyard. Five years ago, Eric put $7,500 into a home improvement account that has earned an average of 5.25% per year. Does Eric have enough money in his account to pay for the backyard fix-up?
Ken Owens Construction specializes in small additions and repairs. His normal charge is $400/day plus materials. Due to his physical condition, David, an elderly gentleman, needs a downstairs room converted to a bathroom. Ken has produced a bid for $5000 to complete the bathroom. He did not provide David with the details of the bid. However, they are shown here. The towns social services has asked Ken if he could reduce his bid to $4000. Should Ken accept the counter offer? B. How much would his income be reduced? C. If the towns social services guaranteed him another job next month at his normal price, could he accept this job at $4000?
Which one of the following statements is false? Group of answer choices A.Bill drives 20 each way between his home to his office – 40 miles round trip each day. During the day he drives to a client site. He drives a total of 63 miles that day. He may deduct the cost of 43 miles. B.Commuting expenses may be deductible if you are transporting tools. C.A consultant works out of her home. She may deduct the cost of driving to a client’s place of business. D.The expenses of driving between your regular job and a second job are deductible.
A refinisher of antiques named Constance has been so successful with her small business that she is planning to expand her shop. She is going to start enlarging her shop by purchasing the following equipment.(a) What would be the net cost to Constance to obtain this equipment? Assume that she can trade the old equipment in for 15% of its original cost. Assume there has been no inflation in equipment prices. (b) Suggest a green engineering approach to constance for disposing of the solvents and lacquers used in her business.
Jane is a roofing contractor. Jane's friend needed a new roof but did not have the cash to pay. Jane's friend instead paid with a used truck that Jane could use in her roofing business, The truck had originally cost the friend $17,500 but it was gently used and only worth $6,000. Jane did not actually need the truck and ended up selling it to a used car dealer for $5,200 a few months later. Explain what amount of gross income Jane must recognize as a result of the truck payment and why. _________________________________________________________________________________________________________________________________________________________________________
Lou buys bottles of water from the grocery store, but is now considering the environmental ramifications of the waste. He is considering getting a water filtration system in his home, but it will cost $1.000, which would mean he would take out a small loan at 7% interest for one year. If bottled water costs $7 a week, what would be the difference in the costs after one year?
Marsha Jones has bought a used Mercedes horse transporter for her Connecticut estate. It cost $54,000. The object is to save on horse transporter rentals.Marsha had been renting a transporter every other week for $219 per day plus $1.95 per mile. Most of the trips are 80 or 100 miles in total. Marsha usually gives Joe Laminitis, the driver, a $30 tip. With the new transporter she will only have to pay for diesel fuel and maintenance, at about $0.64 per mile. Insurance costs for Marsha’s transporter are $2,150 per year.The transporter will probably be worth $34,000 (in real terms) after eight years, when Marsha’s horse Spike will be ready to retire. Assume a nominal discount rate of 7% and a 4% forecasted inflation rate. Marsha’s transporter is a personal outlay, not a business or financial investment, so taxes can be ignored.Calculate the NPV of the investment. (Do not round intermediate calculations. Round your answer to the nearest whole dollar amount.)
Marsha Jones has bought a used Mercedes horse transporter for her Connecticut estate. It cost $35,000. The object is to save on horse transporter rentals. Marsha had been renting a transporter every other week for $200 per day plus $1.00 per mile. Most of the trips are 80 or 100 miles in total. Marsha usually gives the driver, Joe Laminitis, a $40 tip. With the new transporter she will only have to pay for diesel fuel and maintenance, at about $0.45 per mile. Insurance costs for Marsha’s transporter are $1,200 per year. The transporter will probably be worth $15,000 (in real terms) after eight years, when Marsha’s horse Spike, will be ready to retire. Assume a nominal discount rate of 9% and a 3% forecasted inflation rate. Marsha’s transporter is a personal outlay, not a business or financial investment, so taxes can be ignored. Calculate the NPV of the investment.
Camila Torres wants to buy a new high-end audio system for her car. The system is being sold by two dealers in town, both of whom sell the equipment for the same price of $2,000. Camila can buy the equipment from Dealer A, with no money down, by making payments of $173.98 a month for 12 months; she can buy the same equipment from Dealer B by making 36 monthly payments of $66.43 (again, with no money down). Camila is considering purchasing the system from Dealer B because of the lower payment. Find the APR for Dealer A. Round the answer to 2 decimal places. % Find the APR for Dealer B. Round the answer to 2 decimal places. % What do you recommend?
Gloria is planning on opening a cake shop. She has found a location that rents for $15,550 per year and it will cost her another $13,716 to furnish the shop and purchase all the necessary equipment. She plans on charging $20 for a cake and it will cost her $3 per cake for ingredients and $1.92 per cake for decorations and $1.59 per cake for the beautiful, colorful to-go boxes. What is the dollar breakeven point she will need to earn to cover her costs in the first year? Round to the nearest whole number.
If your vacation cabin had rainwater harvesting, you could use it more often. Your water utility charges you $25 per month for basic service and $10 in usage fees. You plan to own the cabin for 10 more years. The gutters, filtration system, and storage tank would cost $4,500 upfront. Because of your roof size, the catchment system would supply all the water you need, and you could disconnect from the water utility. 1. What is the IRR (write as a percentage)? 2. Is it a good idea (Yes or No, based on IRR)?
Teri Silva’s Whisker Watcher pet watching business shut down during the pandemic since people were no longer traveling and therefore didn’t need her pet watching service. To help her until she found a new job, Teri’s credit union offered her a $9,500 personal loan requiring no collateral with payments of $218.78 monthly for 4 years. Calculate her APR by table. (Use Table 14.1)