1. Yardbirds Enterprises is planning to invest $36,000 each year for eight years. What will be the value of the investment at the end of eight years if the company can earn 8%?
2. The following information pertains to April 2019 for Eddington Enterprises:
Beginning inventory 10 units @ $1,000 per unit
First purchase 25 units @ $1,400 per unit
Second purchase 25 units @ $1,800 per unit
Ending inventory 20 units
Using LIFO, determine the total cost of the ending inventory.
1.Future value of annuity=Annuity[(1+rate)^time period-1]/rate
=36000[(1.08)^8-1]/0.08
=36000*10.6366276
=$382918.59(Approx)
2.Goods sold=Beginning inventory+Purchases-Ending inventory
=10+25+25-20=40 units
As per LIFO;ending inventory=10 units @$1000 each+10 units@$1400 each
=$24000
NOTE:As per LIFO;goods purchased last are sold off first.Hence 40 units sold would consist of 25 units of second purchases and the balance=(40-25)=15 units of first purchases.
Hence 20 units of ending inventory would consist of =(25-15)=10 units of first purchases and 10 units of beginning inventory.
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