Answer:
The correct answer is the option C: The recognition and autonomy offered by attending seminars would result in satisfaction, but employees might also be dissatisfied if pay were poor or their ideas were not valued.
Explanation:
To begin with, the fact that some employees will find the seminars very rich in terms of learning more and therefore to increase their knowledge will stimulate the feeling of self improvement and growth not just in the company but also in their professional careers and that is why they will be more motivated at the time of doing their job but they would obviously feel dissatisfied if the pay is not worthy enough for them or even more if their ideas were not valued as they expected them to be and as the company said to them that will be.
Suppose you purchased 100 shares of stock in 2010 for $20 a share, and the price now is $30 a share. If you sell the stock, then your capital gain is:__________.A. $3,000.B. $1,500.C. $1,000.D. indeterminate without knowing the inflation rate.
Answer:
Option D is correct
Explanation:
The cost of purchasing the 100 shares was $20 per share, in other words, the total amount paid for the stock acquisition is $2,000($20*100).
However, the later shares were sold for $3,000($30*100), which means that capital gain is the difference between the sales value and the acquisition value.
Capital gain=$3,000-$2,000=$1000
The correct option is D
A stock just paid an annual dividend of $0.40 per share. The firm expects to increase the dividend by 20 percent per year for the next four years and 3 percent per year thereafter. The discount rate is 11 percent. Which one of these is correct regarding the two-stage growth formula?
Answer:
12.78
Explanation:
Two stage dividend growth model enables us to identify dividend value by incorporating the effect of multiple growth rates. This model assumes that dividend will pass out through 2 stages of growth. In first stage the dividend grows at a constant rate to a specified time then dividend grows at a further rate.
= Do (1 + g) + D1 (1 +g) + D2 (1 +g) + D3 (1 +g) + D3 * (1 +g2) / (r - g2)
0.4 * 1.2 + 0.48 * 1.2 + 0.6 * 1.2 + 0.7 *1.2 + 0.83 * 1.03 / 11 - 3
= 12.78.
What is the annual percentage rate on a loan with a stated rate of 2.75 percent per quarter?A. 11.00 percentB. 11.09 percentC. 11.18 percentD. 11.27 percentE. 11.31 percent
Answer:
A. 11.00 percent
Explanation:
The computation of the annual percentage rate is shown below:-
Annual percentage rate = Percentage of stated rate × Number of quarters per year
= 2.75% × 4
= 11%
Therefore for computing the annual percentage rate we simply applied the above formula i.e multiplying the percentage of the stated rate with the number of quarters in a year
So, the correct option is A.
The annual percentage rate on a loan with a stated rate of 2.75 percent per quarter is 11.27 percent.
To calculate the annual percentage rate (APR) on a loan with a stated rate of 2.75 percent per quarter, we need to use the following formula: APR = (1 + periodic interest rate)^n - 1. Here, the periodic interest rate is 2.75 percent, and n is the number of compounding periods in a year, which is 4. Substituting these values into the formula, we get: APR = (1 + 0.0275)^4 - 1 = 0.1127 or 11.27%. Therefore, the annual percentage rate on the loan is 11.27 percent.
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When any two firms have both a high degree of market commonality and highly similar resources, a ______________ threat is present.
Answer: stronger, competitive
Explanation:
When there is a high identical resources base and and a high degree of market commonality between two firms ,this show that there is a stronger and competitive threat. It should be noted that despite this threat, there may be no competitive action.
A rival in the market may not want to attack a company that shares identical resources base because it can result into an intense battle. Also, attacking them can lead to more motivation and thereby produce a better quality product.
A store has 5 years remaining on its lease in a mall. Rent is $1,900 per month, 60 payments remain, and the next payment is due in 1 month. The mall's owner plans to sell the property in a year and wants rent at that time to be high so that the property will appear more valuable. Therefore, the store has been offered a "great deal" (owner's words) on a new 5-year lease. The new lease calls for no rent for 9 months, then payments of $2,600 per month for the next 51 months. The lease cannot be broken, and the store's WACC is 12% (or 1% per month).
A. Should the new lease be accepted? (Hint: Be sure to use 1% per month.)
B. If the store owner decided to bargain with the mall's owner over the new lease payment, what new lease payment would make the store owner indifferent between the new and the old leases?
C. The store owner is not sure of the 12% WACC. It could be higher or lower. At what nominal WACC would the store owner be indifferent between the two leases?
Answer:
A. Should the new lease be accepted?
No, since the PV of the new deal is much higher than the PV of the current deal.
current deal's PV = $1,900 x annuity factor (1%, 60 periods) = $1,900 x 44.40459 = $84,368.72
new deal's PV:
$2,600 x annuity factor (1%, 51 periods) = $2,600 x 39.79814 = $104,475.16
$104,475.16 / 1.01⁹ = $95,525.80
B. If the store owner decided to bargain with the mall's owner over the new lease payment, what new lease payment would make the store owner indifferent between the new and the old leases?
To determine which lease value would make the store owner indifferent between the two options, we have to determine the future value of the first 9 payments that are not paid. Then that value should be equal to the present value of the increase in rent for the next 51 months:
step 1, calculate future value of 9 payments:
F V = payment x [(1 + r)ⁿ - 1] / r
payment = $1,900 r = 1% n = 9F V = $1,900 x [(1 + 0.01)⁹ - 1] / 0.01 = $17,800
step 2, calculate the present value of the increase in rent:
PV = payment / {1 - [1 / (1 + r)ⁿ] / r}
payment = $17,800r = 1% n = 51PV = $19,674 / ({1 - [1 / (1 + 0.01)⁵¹]} / 0.01) = $17,800 / 39.8 = $447.24
the new lease payment for which the store owner would be indifferent = $1,900 + $447.24 = $2,347.24
C. The store owner is not sure of the 12% WACC. It could be higher or lower. At what nominal WACC would the store owner be indifferent between the two leases?
in order to determine at what WACC would the store owner be indifferent between both alternatives, I used an excel spreadsheet to determine the IRR of the differential amount between both lease amounts:
periods 1 - 9 = -$1,900
periods 10 - 50 = $700
this results in a monthly IRR = 2.74%
WACC = 2.74% x 12 = 32.88%
Which of the following accounting concepts states that an accounting transaction should be supported by sufficient evidence to allow two or more qualified individuals to arrive at similar measures
a. Matching
b. Stable monetary unit
c. Verifiability
d. Periodicty
Answer:
The correct answer is the option C: Verifiability.
Explanation:
To begin with, the accounting concept of "Verifiability" indicates that the accounts of a company are verifiable in the cases when those accounts are reproducible so that indicates that given the same data and assumpitions it is understandable that an independent accountant can produce the same result the company actually did. Therefore that the verifiability is the concept that states that an accounting transaction should be supported by sufficient evidence to allow two or more qualified accountants to arrive at similar measures as it said before.
The accounting concepts states that an accounting transaction should be option c. Verifiability
What is Verifiability?It represents that the accounts of a company are verifiable at the time when those accounts are produced again in order to provide the same data and assumption. So, that verifiability is the concept that states that an accounting transaction should be supported by enough evidence to permit two or more qualified accountants.
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You decide to use your department store charge card .. a lot! After seven weeks you have racked up $1,400 of debt. Your minimum monthly payment is $45, and is paid at the end of each month. If the APR is 16.80%, how long will it take you to pay the loan off? (Assume that you make the minimum payment until the debt is entirely paid off.)
Answer:
41 months
Explanation:
For computing the time period we have to use the NPER formula i.e shown in the attachment
Given that,
Present value = $0
Future value = $1,400
Rate of interest = 16.80% ÷ 12 months = 1.4%
PMT = $45
The formula is shown below:
= NPER(Rate;PMT;PV;-FV;type)
The future value come in negative
So, after applying the above formula, the time period is 41 months
Depreciation by Three Methods; Partial Years Perdue Company purchased equipment on April 1 for $86,670. The equlpment was expected to have a useful life of three years, or 6,480 operating hours, and a residual value of $2,430. The equipment was used for 1,200 hours during Year 1, 2,300 hours in Year 2, 1,900 hours in Year 3, and 1,080 hours in Year 4 Required:Determine the amount of depreciation expense for the years ended December 31, Year 1, Year 2, Year 3, and Year 4, by (a) the straight-line method, (b) units-of-output method, and (c) the double-declining-balance method. r A. Straight-line method Year AmountYear 1 21,060 Year 2 28,080Year 3 28,080Year 4 7,020 B. Units-of-output method Year Amount Year 1 15,600Year 2 29,900Year 3 24,700
Answer:
purchase cost $86,670
useful life 3 years, 6,480 operating hours
residual value $2,430
a. the straight-line method
depreciation expense per year = ($86,670 - $2,430) / 3 = $28,080
depreciation year 1 = $28,080 x 9/12 = $21,060 depreciation year 2 = $28,080 depreciation year 3 = $28,080 depreciation year 4 = $28,080 x 3/12 = $7,020b. units-of-output method.
depreciation per hour = ($86,670 - $2,430) / 6,480 = $13
depreciation year 1 = 1,200 x $13 = $15,600 depreciation year 2 = 2,300 x $13 = $29,900 depreciation year 3 = 1,900 x $13 = $24,700 depreciation year 4 = 1,080 x $13 = $14,040c. the double-declining-balance method.
depreciation year 1 = 2 x 1/3 x $86,670 x 9/12 = $43,335 depreciation year 2 = $14,445 + (2 x 1/3 x $28,890 x 9/12) = $28,090 depreciation year 3 = $4,815 + (2 x 1/3 x $9,630 x 9/12) = $9,630 depreciation year 4 = $1,605 + ($3,210 - $2,430) = $2,385Tax rates other than the current tax rate may be used to calculate the deferred income tax amount on the balance sheet if
Answer:
(A.) the future tax rates have been enacted into law.
Explanation:
In case when the rate of tax instead of the current tax rate used to compute the deferred amount related to income tax for the balance sheet if the rate of future tax is enacted in law i.e means when the future tax rate imposed under the taxation rules and regulations
Therefore option A is correct and the other options are incorrect
Schwiesow Corporation has provided the following information:_________. Cost per Unit Cost per PeriodDirect materials $ 7.05 Direct labor $ 3.50 Variable manufacturing overhead $ 1.65 Fixed manufacturing overhead $ 11,000Sales commissions $ 1.00 Variable administrative expense $ 0.40 Fixed selling and administrative expense $ 5,500For financial reporting purposes, the total amount of product costs incurred to make 5,000 units is closest to:A. $72,000B. $61,000C. $11,000D. $77,000
Answer:
Total product cost= $72,000
Explanation:
Giving the following information:
Direct materials $7.05
Direct labor $3.50
Variable manufacturing overhead $1.65
Total unitary variable cost= $12.2
Fixed manufacturing overhead $11,000
The product costs are the sum of direct material, direct labor, and total manufacturing overhead:
Total product cost= 5,000*12.2 + 11,000
Total product cost= $72,000
Country Kitchen's cost of equity is 19.8 percent and its pretax cost of debt is 8.9 percent. What is the firm's weighted average cost of capital if its debt-equity ratio is 0.66 and the tax rate is 46 percent
Answer:
33.17%
Explanation:
WACC = (D/E) rd (1 - tax rate) + (E/D) re
(D/E) = Debt to equity ratio
rd = pretax cost of debt
(E/D) = equity to debt ratio
re = cost of equity
0.66 x 8.9 x 0.54 + 19.8 x 1.52 = 3.17 + 30 = 33.17%
Indicate whether the following actions would increase, decrease, or not affect Indigo Inc.'s total assets, liabilities, and stockholders' equity:
Question Assets Liabilities Stockholders Equity
1. Authorizing and issuing stock certificates in a stock split
2. Declaring a stock dividend
3. Issuing stock certificates for the stock dividend declared in (2)
4. Declaring a cash dividend
5. Paying the cash dividend declared in (4)
Answer:
Assets Liabilities Stockholder's Equity
1. Authorizing and issuing Not affect Not affect Not affect
stock certificates in a
stock split
2. Declaring a stock Not affect Not affect Not affect
dividend
3. Issuing stock certificates Not affect Not affect Not affect
for the stock dividend
declared in (2)
4. Declaring a cash dividend Not affect Increase Decrease
5. Paying the cash dividend Decrease Decrease Not affect
declared in (4)
Bach Instruments Inc. makes three musical instruments: flutes, clarinets, and oboes. The budgeted factory overhead cost is $2,948,125. Overhead is allocated to the three products on the basis of direct labor hours. The products have the following budgeted production volume and direct labor hours per unit: Budgeted Production Volume Direct Labor Hours Per Unit Flutes 2,000 units 2.0 Clarinets 1,500 3.0 Oboes 1,750 1.5 a. Determine the single plantwide overhead rate.
Answer:
Predetermined manufacturing overhead rate= $391.78 per direct labor hour
Explanation:
Giving the following information:
Budgeted factory overhead= $2,948,125.
Direct labor hours:
Flutes= 2,000*2= 4,000
Clarinets= 1,500*3= 4,500
Oboes= 1,750*1.5= 2,625
Total direct labor hours= 7,525
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 2,948,125/7,525
Predetermined manufacturing overhead rate= $391.78 per direct labor hour
A plan that reports the units or costs of merchandise to be purchased by a merchandising company during the budget period is called a:
Answer:
Merchandise purchases budget.
Explanation:
The Merchandise purchases budget is a plan that reports the units or costs of merchandise to be purchased by a merchandising company during the budget period.
It is prepared by a retail company to make sure it has sufficient inventory on hand. It uses the budgeted sales figures from the Sales Budget to decide the quantity of inventory to be bought at each period
The correct statement is that a plan that reports the units or costs of merchandise to be purchased by merchandising company is called a
It denotes and helps in understanding the formulation of inventories and free cash flows in the hands of the company as on the date of preparation of budgets by a merchandising company.
The requirement of the merchandising company to purchases can be estimated by addition of cost of goods sold and the desired ending cost of inventory which is to be subtracted with opening stock.The formula to calculate the merchandise purchases budget by a merchandising company can be stated as below,[tex]\rm Merchandise\ Purchases\ Budget= \ Costs\ of\ Goods\ sold\ + Desired\ Inventory\ - Stock[/tex]The formula stated above is effective in analyzing how much units are to be produced and the costs that can be reduced or born, if any by such merchandising company.Hence, the correct statement is that a report which suggests merchandise to be purchased by a company for a given accounting period is known as merchandise purchase budgeting report.
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" When marketing research came back with the observation that customers were staying away from his bookstore because of a lack of services like gift cards, return policies and doing special orders, David was shocked. "We have the most generous policies of any store in the region. What more do they want
When marketing research came back with the observation that customers were staying away from his bookstore because of a lack of services like gift cards, return policies and doing special orders, David was shocked. "We have the most generous policies of any store in the region. What more do they want? Nobody asks about them or uses them." David and his bookstore are likely suffering from a:
A. knowledge gap.
B. standards gap.
C. retail policy gap.
D. delivery gap.
E. communications gap.
Answer:
A. knowledge gap.
Explanation:
Knowledge gap is term in business or marketing which describes the difference between the customers' expectations of the service and the company's perception of those expectations.
Hence, knowledge gap arises when a management fails to understand exactly the expectations of customers.
Knowledge gap could occur due to various reasons, some of which are:
1. Lack or inadequate market research.
2. Lack of management and customer interaction.
3. Inability to heed customer complaints.
Hence, in this case, David and his bookstore are likely suffering from a KNOWLEDGE GAP.
On September 1, a company established a petty cash fund of $230. On September 10, the petty cash fund was replenished when there was $81 remaining and there were petty cash receipts for supplies, $53, and postage, $80. On September 15, the petty cash fund was increased to $320.
Required:
Prepare the journal entries, if any, required on September 1, September 10, and September 15. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
September 1, petty cash fund is established
Dr Petty cash fund 230
Cr Cash 230
September 10, petty cash expenses
Dr Supplies expense 53
Dr Postage expense 80
Dr Cash short and over 16
Cr Petty cash fund 149
September 10, petty cash is replenished
Dr Petty cash fund 149
Cr Cash 149
September 15, petty cash fund in increased
Dr Petty cash fund 90
Cr Cash 90
A paint manufacturing company produces three paint bases of differing quality. Due to throughput limitations (measured in gallons) at their facility, they are unable to meet total demand for their products. In determining which of their products they should produce, what should they consider?
a. The gross profit per unit for each product
b. The operating margin per unit for each product
c. The contribution margin per gallon of throughput for each product
d. None of the above
Answer:
c. The contribution margin per gallon of throughput for each product
Explanation:
contribution margin per gallon = Revenue per gallon - variable cost per gallon.
Contribution margin would enable the company to know the amount each product earns in excess after variable cost has been subtracted from revenue.
the product with the highest contribution margin should be considered.
At the date of the business combination, the book values of Spice’s assets and liabilities approximated fair value except for inventory, which had a fair value of, and land, which had a fair value of
Answer:
$830,000.
Explanation:
Step one: determine or Calculate the total number of assets.
Total number of assets = Retained Earnings + inventory(spice) + cash + land fair value + inventory (pumpkin)
Total number of assets = 180,000 + 25,000 + 15,000 + 95,000 + 30,000 = $345,000.
Step two : Calculate or determine the total liabilities.
Total liabilities = retained earnings + bonds payable + Account payable (pumpkin) +
Total liabilities = 180,000 + 40,000 + 10,000 = $230,000.
Step three: determine the value for the total amount of goodwill.
Total amount of Goodwill = A - B
Where A = paid consideration + non controlling interest fair value.= $(210000 + 90000) = $300, 000.
B= acquired Assets - assumed liabilities. = $(345,000 - 230,000) = $115,000.
Total amounts of Goodwill = A - B = $185,000.
Step four: determine the consolidated sheet;
185,000 + 95,000 + 65,000 + 360,000 + 30,000 + 95,000 = $830,000.
Look at the tables below, which show, respectively, the willingness to pay and willingness to accept of buyers and sellers of bags of oranges. For the following questions, assume that the equilibrium price and quantity will depend on the indicated changes in supply and demand. Assume that the only market participants are those listed by name in the two tables.
Person Max Actual
bob 13 8
barly 12 8
bill 11 8
bart 10 8
brent 9 8
betty 8 8
Person Minimum Actual
carlos 3 8
courtney 4 8
chunk 5 8
cindy 6 8
craig 7 8
chad 8 8
Required:
a. Given that the equilibrium price is $8, what is the equilibrium quantity given the data displayed in the two tables?
b. What if, instead of bags of oranges, the data in the two tables dealt with a public good like fireworks displays? If all the buyers free ride, what will be the quantity supplied by private sellers?
c. Assume that we are back to talking about bags of oranges (a private good), but that the government has decided that tossed orange peels impose a negative externality on the public that must be rectified by imposing a $2-per-bag tax on sellers. What is the new equilibrium price?
Answer and Explanation:
a. The equilibrium quantity for the given two tables is
As if the equilibrium price is $8 so the six consumers i.e bob, barly,bill,bart, brent, betty) are paying more than the equilibrium price and on the other hand six producers (carlos, courtney, chunk, cindy, craig, chad) are accepted the price as the equilibrium price is more than the accepted price
Hence, the equilibrium quantity is 6
b. Now if all the buyers are free to ride so the quantity supplied by private sellers is 0 as the minimum accepted price is more than the willingness price as producers is not able to produced
c. At imposing $2 per bag tax on sellers, the new equilibrium price is $9 as the price rise to $9
Ionic Charge, is a newly organized manufacturing business that plans to manufacture and sell 60,000 units per year of a new product. The following estimates have been made of the company’s costs and expenses (other than income taxes).
Fixed Variable per Unit
Manufacturing costs:
Direct materials $25
Direct labor $15
Manufacturing overhead $500,000 $8
Period costs:
Selling expenses $2
Administrative expenses $300,000
Totals $800,000 $50
Required:
a. What should the company establish as the sales price per unit if it sets a target of earning an operating income of $700,000 by producing and selling 60,000 units during the first year of operations? (Hint: First compute the required contribution margin per unit.)
b. At the unit sales price computed in part a, how many units must the company produce and sell to break even? (Assume all units produced are sold.)
c. What will be the margin of safety (in dollars) if the company produces and sells 60,000 units at the sales price computed in part a?
Answer:
a. What should the company establish as the sales price per unit if it sets a target of earning an operating income of $700,000 by producing and selling 60,000 units during the first year of operations?
$64.50b. At the unit sales price computed in part a, how many units must the company produce and sell to break even?
55,173 unitsc. What will be the margin of safety (in dollars) if the company produces and sells 60,000 units at the sales price computed in part a?
$311,341.50Explanation:
variable costs per unit:
direct materials $25
direct labor $15
manufacturing overhead $8
selling expenses $2
total $50
fixed costs per unit:
manufacturing overhead $500,000
administrative expenses $300,000
total $800,000
assuming the company actually produces and sells the 60,000 units
units sold = (fixed costs + expected profits) / contribution margin
60,000 = $870,000 / contribution margin
contribution margin = $870,000 / 60,000 = $14.50
contribution margin = sales price - variable costs
$14.50 = sales price - $50
sales price = $50 + $14.50 = $64.50
break even point = fixed costs / contribution margin = $800,000 / $14.50 = 55,172.41 ≈ 55,173 units
margin of safety = current sales - break even point = (60,000 x $64.50) - (55,173 x $64.50) = $311,341.50
In the classical model of decision making, the most appropriate decision possible in light of what is believed to be the most desirable consequences for the organization is known as the _______ decision. intuitive creative heuristic subjective optimum
Answer:
Optimum
Explanation:
The Classical approach to decision making is specific on making decisions to achieve required outcome. Under this approach, decisions are rationl and geared towards one stable and sustainable goal. The most appropriate decision possible in light of what is believed to be the most desirable consequences for the organization is the Optimum. The decision maker always makes decisions based on what is the best interests of that organization.
Assume for a perfectly competitive firm, the market price of one box of tissues is $2. What is the marginal revenue when sales increase from 100 boxes to 200 boxes?
Answer:
The marginal revenue = $2
Explanation:
Firstly we calculate the value in dollars for the number of boxes sold
For 100 boxes, we have 100 * 2 = $200
For 200 boxes, we have 200 * 2 = $400
Mathematically, the marginal revenue = (cost of 200 boxes- cost of 100 boxes)/difference in quantity
= (400-200)/(200-100) = 200/100 = $2
Thus affirms the fact that for a perfectly competitive firm, marginal revenue MR = P (price)
The company offered Gwendolyn a(n) _____ for living in an unfamiliar country isolated from her family, dealing with a new culture and language, and adapting to new work habits and practices. She received this as a percentage of her base salary.
Answer:
Hardship allowance.
Explanation:
The company offered Gwendolyn a hardship allowance for living in an unfamiliar country isolated from her family, dealing with a new culture and language, and adapting to new work habits and practices. She received this as a percentage of her base salary.
A hardship allowance can be defined as an extra amount of money being paid by an employer to an employee for working in difficult or tedious conditions. Also, when an employee works in an unfamiliar environment, potentially dangerous territory, and deal with risks in living in isolation from his or family members, they are entitled to a hardship allowance from their employer.
Hardship allowance is usually calculated as a percentage of an employee's monthly salary.
For instance, Gwendolyn works for an oil company and he's given an assignment to go work at a rig in a warzone, he is entitled to a hardship allowance from his employer.
If Megan Roberts were given total marketing responsibility over Diet Cherry 7Up, she would hold the position of ____ manager.
Answer: Brand
Explanation:
Brand managers are the ones in charge of how a product is perceived by the public, especially their niche. They do this through Marketing which is publicizing the product.
They are therefore in charge of marketing the product to their niche so that the product can be bought and by being given total marketing responsibility over Diet Cherry 7Up, Ms Roberts is now most definitely, the Brand Manager.
Assume that the U.S. one-year interest rate is 3 percent and the one-year interest rate on Australian dollars is 6 percent. The U.S. expected annual inflation is 5 percent, while the Australian inflation is expected to be 7 percent. You have $100,000 to invest for one year and you believe that PPP holds. The spot exchange rate of an Australian dollar is $0.689. What will be the yield on your investment if you invest in the Australian market
Answer:
4%
Explanation:
you invest $100,000 today and purchase A$145,137.88
in one year, you will have A$152,394.78
since the PPP stands, the spot rate in one year should be:
0.703 US$ per A$ (since Australia's inflation rate is 2% higher than the US inflation rate, the Australian dollar will depreciate by 2%)
with your A$152,394.78, you can purchase $107,133.53
if you invested in the US instead, you would have $103,000
this means that your Australian investment yielded ($107,133.53 / $103,000) - 1 = 0.04 or 4%
A structural engineering consulting company is examining its cash flow requirements for the next 6 years. The company expects to spend $18,000 two years from now, $22,000 three years from now, and $8,000 five years from now. What is the present worth of the planned expenditures at an interest rate of 10% per year, compounded semiannually
Answer:
The total present value of the expenditures= $36,136.7
Explanation:
Giving the following information:
Cash flows:
Cf2= $18,000
Cf3= $22,000
Cf5= $8,000
We need to calculate the present value of the planned expenditures at an interest rate of 10% per year, compounded semiannually.
i= 0.10/2= 0.05
We will use the following formula on each cash flow:
PV= FV/(1+i)^n
Cf2= 18,000/(1.05^4)= $14,808.65
Cf3= 22,000/(1.05^6)= $16,416.74
Cf5= 8,000/(1.05^10)= $4,911.31
The total present value of the expenditures= $36,136.7
What do economists call the period when prices are rising even through the
quantity of goods and services remains constant?
A. Stagnation
B. Contraction
C. Disinflation
D. Inflation
Answer:
D. Inflation
Explanation:
Inflation-a general increase in prices and fall in the purchasing value of money
The situation when prices are rising even through the quantity of goods and services remains constant, is known as inflation. Thus, the correct option is D). Inflation.
What does the term inflation mean?In economics, the term inflation generally refers to the general increase in the prices of goods and services in an economy. It is the rate of increase in prices over a given period of time.
When the general price level rise in an economy, then the particular and each unit of currency buys fewer goods and services that directly means the inflation corresponds to a reduction in the purchasing power of money.
Thus, it can be said the period when prices are rising even through the quantity of goods and services remains constant, the economists call that period inflation.
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Find the present worth in year 0 of $60,000 in year 3 and amounts increasing by 15% per year through year 10 at an interest rate of 11% per year. g
Answer:
Present worth is 398,577
Explanation:
First we need to grow the payment by 15% each year after year 4. Then we need to discount the amounts using the interest rate of 11% each year.
All the workings are done in the pdf file attached with this answer, please find it.
Suppose the reserve requirement ratio is 20 percent. Assuming no bank holds excess reserves and nobody withdraws cash, a $10,000 injection of new reserves by the Fed can create (in the entire mult-banking system), a maximum of:
Answer:
The maximum money created is $50000
Explanation:
The given reserve requirement ratio is = 20 percent
The injection of cash = $10000
So, first, we have to find the money multiplier and then multiply with the injected amount.
Since the reserve requirement is 20 percent so the money multiplier = 1/ 20 = 0.5 or 5.
The Fed can create the maximum money = 10,000 x 5 = 50,000
A customer wishes to place a buy order for a security that has not been registered with the SEC. The security may be purchased if the security:
Complete Question:
A customer wishes to place a buy order for a security that has not been registered with the SEC. The purchase order can be filled if the security:
A. is exempt from SEC registration
B. is traded by at least 2 market makers
C. has been trading in the market for at least 1 year
D. is sold to professional investors
Answer:
Is exempt from SEC registration
Explanation:
The Securities and Exchange Commission (SEC) is a regulatory agency that is saddled with the responsibility of regulating the capital market and ensuring investors are well protected by making sure standard rules are followed.
If a customer wishes to place a buy order for a security that has not been registered with the Securities and Exchange Commission (SEC). The security may be purchased if the security is exempt from SEC registration.
By standard, the SEC states and implore investors to purchase only securities that are registered with the securities and exchange commission (SEC) or only when an exemption is made available. If securities have been trading for about a year or is being traded by a minimum of two companies, no exemption would be given by the SEC.
Also, there isn't any exemption for securities that is sold only to professional investors.
However, investors can purchase municipal and government securities even without it being registered with the securities and exchange commission.
In a nutshell, the customer can only purchase a security that has not been registered only if it is exempted from SEC registration.