Answers
Answer: $310 million
Explanation:
The net income is used to pay dividends as well as being added to equity at the end of the period. If no new stock was issued then the net income would be the increase in equity plus dividends.
Increase in Equity = Equity 2016 - Equity 2015
Equity 2016 = Total assets 2016 - total liabilities 2016
= ( 420 + 1,420) - ( 240 + 920)
= $680 million
Equity 2015 = Total assets 2015 - total liabilities 2015
= ( 310 + 1,200) - ( 210 + 830)
= $470 million
Increase in Equity = 680 - 470
= $210 million
Net Income = Increase in equity + dividends
= 210 + 100
= $310 million
Related Questions
Which law most likely prompted organizations to create codes of ethics and install ethics hotlines?
A) Corporate and Auditing Accountability, Responsibility, and Transparency Act.
B) Federal Sentencing Guidelines for Organizations Act.
C) Procurement Integrity Act.
D) McCarran-Ferguson Act.
Answers
Answer:
B) Federal Sentencing Guidelines for Organizations Act.
Explanation:
The Federal Sentencing Guidelines for Organizations Act (FSGO) was passed on November, 1991, and it provides a guideline for organizations' compliance and ethics programs. It applies to virtually all types of private organizations, including corporations, partnerships, non-profits, labor unions, etc.
Return on Assets is a valuable financial measurement because it indicates how profit margin, asset turnover, and the equity multiplier affect a companies return.True or False?
Answers
Answer:
True
Explanation:
Return on assets (ROA) is she valuable measure in assessing the effectiveness of company management in utilizing company capital. It is calculated
ROA=
Total Assets/
Net Income
where:
Total Assets=Shareholder Equity+Liabilities
Return on assets is closely related to return on equity as they are both almost used for same purpose which is measuring management's effectiveness in capital utilization. Return on equity differs from return on assets by the inclusion or exclusion of the debt factor in calculating them.
The relationship between ROA and ROE is demonstrated in DuPont formula which is given
ROE=profit margin*asset turnover*shareholder equity
Lochmere Corporation is evaluating a taxable bond at 7% and a municipal bond at 5.75%. What is the break-even tax rate?
Answers
Answer:
18%
Explanation:
Lochemere is evaluating a taxable bond at 7%
= 7/100
= 0.07
The municipal bond is 5.75%
= 5.75/100
= 0.0575
Therefore the break even tax rate can be calculated as follows
Municipal bond = taxable bond × (1-tax rate)
0.0575= 0.07 × (1-t)
0.0575= 0.07(1-t)
1-t= 0.0575/0.07
1-t = 0.82
t= 1-0.82
t= 0.18×100
t= 18%
Hence the break-even tax rate is 18%
If Baldwin issued 1000 shares of common stock at last year's end price, the effect on the balance sheet would be:________
a) Save Answer Retained earnings would increase by $6,323
b) Retained earnings would increase by $63,228
c) Equity would decrease by $6,323
d) Equity would increase by $63,228
Answers
Answer:
d) Equity would increase by $63,228
Explanation:
We are not given any information about stock prices, but we do not need them. Whenever new common stocks are issued, stockholders' equity will increase (always).
Retained earnings are affected by net income and dividends:
net income increases retained earnings dividends decrease retained earningsAfter a papercut, activated platelets release chemical signals to activate more platelets. In this example, the chemical signal is the of a feedback loop.
a. Set point
b. Effector
c. Receptor
d. Metabolism
Answers
Answer:
a. Set point
Explanation:
Homeostasis is the maintenance of internal body environment within a given range.
The set point is the range around which normal body environment should be. For example the set point for body temperature is 37°C. The body works to maintain temperatures around this value.
When a stimulus happens the sensory organs sends the final to the control center.
The control centre ascertains if condition is around the set point.
It then sends signals to the effector to restore balance.
So when platelets release chemical signals to activate more platelets, it is a set point feedback loop trying to restore normal conditions.
On January 1, Lumia Company’s liabilities are $60,000 and its equity is $40,000. On January 3, Lumia purchases and installs solar panel assets costing $10,000. For the panels, Lumia pays $4,000 cash and promises to pay the remaining $6,000 in six months. What is the total of Lumia’s assets after the solar panel purchase?
Answers
Answer:
$106,000
Explanation:
The formula for Asset is stated below.
Assets = Liabilities + Equity
Beginning $100,000 = $60,000 + $40,000
Change $6,000 = $6,000 +
$0
Ending $106,000 = $66,000 + $40,000
Therefore, the total of Lumia's assets after the solar panel purchase is $106,000
The total assets available in the statements of the Lumia Company after the purchase of solar panel will be $106,000. as the remaining $6000 were added in the bills payable side of the liabilities in the balance sheet.
The calculation of the balance sheet is based on simple equation that the assets of the company are a summation of liabilities along with the equities of the company as on that date.
The formula for calculation of Assets is known to us as,[tex]\rm Assets= Liabilities\ + Equities[/tex]
It is given to us that the liabilities of the Lumia Co. are $60000 and the equities of the company stand at $40000 so by putting the values in the formula above we get,[tex]\rm Assets\ Before\ Purchase\ of\ Solar\ Panel = 40000+60000[/tex]
So, the assets before the purchase of solar panel were $100,000. We know that the solar panel was purchased for $10000 for which $4000 was paid in cash and the remaining stood as bills payable.
The equation to solve this would be that in the assets side solar panel heads will show a positive balance of $10000 and a negative $4000 in cash in hand. Total assets will amount to $106,000. Whereas on the liabilities side bills payable will have a positive balance of $6000 which would make the total liabilities of the company as $66,000. Now, putting the values in the formula again we get,[tex]106000=66000+40000[/tex]
Assets match the summation of liabilities and the equities of the company and the balance sheet has tallied.Hence, the total assets of Lumia Co. after the purchase of Solar panel will be $106,000.
To know more about the assets and liabilities, click the link below.
https://brainly.com/question/3111021
g If you borrow $12,000 with an interest rate of 4 percent, to be repaid in five equal yearly payments at the end of the next five years, what would be the amount of each payment? Use Exhibit 1-D. (Round time value factor to 3 decimal places and final answer to 2 decimal places.) g
Answers
Answer:
The instalment amount is 2695.53
Explanation:
The present value of money or borrowed amount (PV)= $12000
Interest rate (i) = 4 percent.
Time period (n )= 5 years
Annuity = A
We have to find the instalment amount that the person repay. Below is the following calculation.
P V= A x ((1 – (1 / (1 + r) ^ -n)) / r)
A = PV / ((1 – (1 / (1 + r) ^ -n)) / r)
A = 12000 / (( 1 – (1 / (1+ 4%)^-5))/ 4%
A = 2,695.53
Chester's balance sheet has $86,386,000 in equity. If next year, assets decrease by $4,000,000 and liabilities increase by $2,000,000, what will be Chester's book value? Select: 1Save Answer $80,386,000 $84,386,000 $88,386,000 $31,097,000
Answers
Answer:
$88,386,000
Explanation:
The computation of the chester book value is shown below:
= Equity balance + decrease in assets in the next year - increased in liabilities for the next year
where,
Equity balance is $86,386,000
Decrease in assets is $4,000,000
Increased in liabilities $2,000,000
Now place these values to the above formula
So, the book value is
= $86,386,000 + $4,000,000 - $2,000,000
= $88,386,000
e. Which country has a comparative advantage in producing cars? f. Which country has a comparative advantage in producing grain?
Answers
Answer:
Comparative advantage in Cars - JapanComparative advantage in grain - AmericaExplanation:
The country that has a competitive advantage in producing something is the one that has less opportunity cost when they do so. In other words, they give up less of another good in order to produce a good.
The Japanese can either produce 4 cars or 5 tons of grain in a year. If they forgo 1 car therefore they produce 5/4 = 1.25 tons of grain per year.
If Americans forgo 1 car they produce 10/4 = 2.5 tons of grain.
Japan has a lower opportunity cost producing cars so they have a comparative advantage.
For Japan to produce 1 ton of grain they will forgo 5/4 = 0.8 cars. For Americans to produce 1 ton of grain they will forgo 4/10 = 0.4 cars.
America has a lower opportunity cost producing grain so they have a comparative advantage.
On January 1, 2016, Aspen Company acquired 80 percent of Birch Company's voting stock for $364,000. Birch reported a $320,000 book value and the fair value of the noncontrolling interest was $91,000 on that date. Then, on January 1, 2017, Birch acquired 80 percent of Cedar Company for $108,000 when Cedar had a $108,000 book value and the 20 percent noncontrolling interest was valued at $27,000. In each acquisition, the subsidiary's excess acquisition-date fair over book value was assigned to a trade name with a 30-year remaining life. These companies report the following financial information. Investment income figures are not included. 2016 2017 2018 $ 485,000 $ 767,500 211,500 386,000 Not available 263,700 $ 892,500 622,300 240,000 Sales: Aspen Company Birch Company Cedar Company Expenses : Aspen Company Birch Company Cedar Company Dividends declared: Aspen Company Birch Company Cedar Company $ 332,500 167,000 Not available $ 525,000 $ 635,000 315,000 550,000 244,000 210,000 $ 10,000 $ 45,000 $ 55,000 8,000 18,000 18,000 Not available 2,000 6,000 Assume that each of the following questions is independent:
a. If all companies use the equity method for internal reporting purposes, what is the December 31, 2017, balance in Aspen's Investment in Birch Company account?
b. What is the consolidated net income for this business combination for 2018?
c. What is the net income attributable to the noncontrolling interest in 2018?
d. Assume that Birch made intra-entity inventory transfers to Aspen that have resulted in the following intra-entity gross profits in inventory at the end of each year:
Date Amount
12/31/16 $13,500
12/31/17 16,200
12/31/18 30,400
What is the accrual-based net income of Birch in 2017 and 2018, respectively? Complete this question by entering your answers in the tabs below. Req A to C Req D
a. If all companies use the equity method for internal reporting purposes, what is the December 31, 2017, balance in Aspen's Investment in Birch Company account?
b. What is the consolidated net income for this business combination for 2018?
c. What is the net income attributable to the noncontrolling interest in 2018?
Show less
a. Investment in Birch
b. Consolidated net income
c. Noncontrolling interests' share of the consolidated net income
Answers
Answer:
A.$440,432
B.$354,400
C.$24,036
D.2017 Realized income - Birch $78,840
2018 Realized income- Birch $76,880
Explanation:
a) Calculation for December 31, 2017, balance in Aspen's Investment in Birch Company account
Consideration transferred by Aspen $364,000
Add Noncontrolling interest fair value $91,000
Birch’s business fair value $455,000
Less :Book value ($320,000)
Trade name $135,000
Life 30 years
Annual amortization $4,500
($135,000/30)
Consideration transferred for Cedar by Birch $108,000
Add Noncontrolling interest fair value $27,000
Cedar’s business fair value $135,000
Less Book value ($108,000)
Excess to trade name $27,000
Life 30 years
Annual amortization $900
(27,000/30)
Investment in Birch $364,000
Birch's reported income-2016 $44,500
($211,500 - $167,000)
Less Amortization expense $4,500
Accrual-based income $40,000
Aspen’s percentage ownership 80%
Equity accrual-2016 $32,000
(80%×$40,000)
Dividends received 2016 ($6,400)
($32,000-$40,000)
(-$8,000 x 80%)
Birch's reported income-2017 $71,000
($386,000 - $315,000)
Amortization expense -$4,500
Income from Cedar $15,040
[80% x (263,700 -244,000 - 900]
Accrual-based income $81,540
($71,000+$15,040-$4,500)
Aspen’s percentage ownership 80%
Equity accrual-2013 $65,232
(80%×$81,540)
Dividends received from Birch 2017 ($14,400)
($18,000 x 80%)
Investment in Birch Dec 31,2017 $440,432
($364,000+$32,000+$65,232-$6,400-$14,400)
b) Calculation for the consolidated net income for this business combination for 2018
Consolidated $1,754,800
LessConsolidated expenses ($1,395,000)
Less Total amortization expense ( a) ($5,400)
Consolidated net income for 2018 $354,400
c) Calculation for the net income attributable to the noncontrolling interest in 2018
Cedar’s NCI in consolidated net income
Revenues less expenses $30,000
($240,000 - $210,000)
Less Excess amortization ($900)
Accrual-based income $29,100
Noncontrolling interest percentage 20%
Cedar’s NCI in consolidated net income$5,820
(20%×$29,100)
Birch's NCI in consolidated Net income
Revenues less expenses $72,300
($622,300 - $550,000)
Less Excess amortization ($4,500)
Equity in Cedar income $23,280
[(30,000 – 900) × 80%]
Realized2014 income of Birch $91,080
($72,300+$23,280)
Noncontrolling interest percentage 20%
Birch’s NCI in consolidated net income $18,216 (80%×$91,080)
Total NCIshare of 2018 consolidated net income $24,036
($18,216+$5,820)
d) Calculation for the accrual-based net income of Birch in 2017 and 2018, respectively
2017 Realized income of Birch
prior to accounting for unrealized gross profit(a) $81,540
2016 Transfer-gross profit recognized in 2017 $13,500
Less 2017 Transfer-gross profit to be recognized in 2018 ($16,200)
2017 Realized income - Birch $78,840
2018 Realized income of Birch prior to accounting for unrealized gross profit(c) $91,080
2017 Transfer-gross profit recognized in 2018 16200
Less 2018 Transfer-gross profit to be recognized in 2019 ($30,400)
2018 Realized income-Birch $76,880
What would happen to GDP if a significant number of house-spouses who were previously staying home to care for their children began taking jobs and placing their children in day-care? Would the nation's well-being necessarily be better off?
Answers
Answer:
The GDP will increase.
Explanation:
The number of women taking a job will result in the rise of real GDP because their participation will increase the number of economic activities. Therefore, a rise in economic activities will boost the GDP. But it would be uncertain to say that the well being of the nation will be better off because daycare will harm the bond of children and parents. Moreover, lack of parental supervision will result in the low performance of children at the latter age and if the child is at the age in which breastfeeding is required then lack of breastfeeding may harm child's physical and mental health as well.
Businesses often spend significantly more money on creating customer access for their products/service than they spend on advertising.
A. True
B. False
Answers
Answer:
The correct answer is:
True (A)
Explanation:
Customer access strategy is a framework or a set of standards, guidelines and processes, which defines the means by which a customer and the organization can interact, and means by which the customer has access to:
the relevant information needed to make purchasesthe right logistics for the execution of a purchaseThe arear of access are mainly information (value of the product, price of products, how products work) and logistics (means of getting the products, customer service on the after-purchase needs etc).
It has been studied extensively that companies are spending 3 to 4 times as much money on creating customer access than they do on advertising, this is because even if advertising is successful, the results will not be seen if customer access is not successful, and having an efficient customer access strategy can provide a competitive advantage to the producers.
Variable costs refer to the costs of __________ that can easily be increased or decreased in a __________ period. g
Answers
Answer:
outputs, short
Explanation:
Variable costs is an expense which changes as production output changes. When production is increasing, variable cost is increasing and when production is decreasing, variable cost is decreasing as well.
Variable costs can be seen as short-term as it can be adjusted.
Examples of variable costs are: utility costs, costs of raw materials, direct labor costs, etc.
What tool of monetary policy will the Fed use to increase the federal funds rate from 1 percent to 1.25 percent
Answers
Answer:
Open-market operations
Explanation:
Open-market operations is a term that is used to describes a form of arrangement or process used as monetary policy, whereby the federal government through federal reserves basically trade the nation's treasury securities for the purpose of controlling the flow of in the economy, on the open market.
Hence, the tool of monetary policy the Fed uses to increase the federal funds rate from 1 percent to 1.25 percent is called OPEN-MARKET OPERATIONS
Support functions manage and improve the efficiency of an organization's conversion processes so that more value is created.
a) true
b) false
Answers
Answer:
a) true
Explanation:
Support Function include Information Technology, Human Resources, Finance and Marketing. These are there to ensure that conversion process is efficient by providing support services such as sourcing of talent, fund management, communication.
If individuals forecast future prices by examining the rates of inflationof the present and recent past, they are using:
a. adaptive expectations
b. rational expectations
c. inflationary
d. structural expectations
Answers
Answer:
a. adaptive expectations
Explanation:
When we say someone is using adaptive expectations, it means that they are using past events or experiences in order to predict future behaviors or trends. This methodology is commonly used to predict inflationary rates and how they affect the prices of assets in the future. Generally people will believe that past events will tend to repeat themselves in the future.
Orange Co. is a manufacturer and Pineapple Company is a merchandiser. What is the difference in the budgets the two entities will prepare?
Answers
Answer:
Orange Co.'s budget will include the cost of production, which is made up of raw materials, direct labor, and manufacturing overhead. The above cost of production and the accompanying items will not be found in the budget of Pineapple Company. The latter's budget will focus on purchase of goods for sale (instead of raw materials) and inventories of finished goods (instead of raw materials and work in process). Orange Co. determines its product cost per unit from the cost of production divided by the quantity produced. Pineapple Company's product cost is based on the purchase price of goods, which includes the manufacturer's profit.
Explanation:
The operations and accounting for the cost of production of Orange Co. will be different from Pineapple Company's. The difference is a reflection of their statuses as manufacturer and merchandiser respectively. Orange Co. manufactures and sells goods while Pineapple Company sell manufactured goods.
A loan is offered with monthly payments and a 15.5 percent APR. What is the loan's effective annual rate (EAR)
Answers
Answer:
16.63%
Explanation:
effective annual rate (EAR) = (1 + periodic interest rates)^m - 1
M = number of compounding
periodic interest rates = 15.5 /12 = 1.29%
1.0129^12 - 1 = 0.166269 = 16.63%
What investments could Trafigura make to maximise its market position while maintaining a responsible risk profile
Answers
Answer:
By applying a process of natural hedging, with integrated operational management, logistics and infrastructural investments, Trafigura can diversify its activities and investments so that risks are flattened out. For instance, its investments in storage and shipping capabilities ensure that if the demand for storage is low, the demand for shipping will increase and vice versa.
Furthermore, when Trafigura is not trading actively in the physical commodity, it can use its asset management, logistics, and distribution capabilities and globalized network of subsidiaries and activities to offset the low revenue from trading. These diversified investments and assets, therefore, enhance and complement its various activities so that its risk profile is constantly being managed in a balanced manner without incurring so much risk costs.
Explanation:
Trafigura Group Pte. Ltd. according to sources, is one of the world's "largest independent and integrated commodity traders and a logistics, warehousing, asset management, mining, and energy distribution conglomerate." As a multinational commodity trading company founded in 1993, Trafigura trades in base metals and energy, and is registered and headquartered in Singapore.
West Corp. issued 14-year bonds 2 years ago at a coupon rate of 9.8 percent. The bonds make semiannual payments. If these bonds currently sell for 103 percent of par value, what is the YTM?
Answers
Answer:
the YTM is 9.38 %.
Explanation:
Bond Prices in most countries is expressed per $100. We shall use this as the Price for the bond in question.
Then the Yield to Maturity (YTM), r of the Bond can be determined as follows
Pv = - $103
pmt = ($100 × 9.80) ÷ 2 = $4.90
p/yr = 2
n = (14 - 2) × 2 = 24
Fv = $100
r = ?
Using a Financial Calculator, the Yield to Maturity (YTM), r is 9.38 %
A medical clinic dispenses vaccines at a steady rate of 520 doses per month. Each order placed to the vaccine manufacturer incurs a fixed cost of $140. Each vaccine dose held in inventory incurs a holding cost of $3 per year.Required:a. Using the EOQ model, calculate the optimal order quantity, images , and the optimal average cost per year, images.b. Suppose that the fixed cost K increases. Will images increase, decrease, or stay the same? Briefly explain
Answers
Answer:
a) EOQ = 763 vaccines
annual total cost = $2,289.45
b) if order cost increase, then the EOQ will also increase since the total number of orders placed should decrease in order to keep total costs as low as possible.
Explanation:
EOQ = √(2SD / H)
s = order cost = 140
h= holding cost per unit = 3
d = annual demand = 520 x 12 = 6,240
EOQ = √[(2 x 140 x 6,240) / 3] = 763.15 ≈ 763
annual total cost = [(6,240 / 763) x $140] + [(763 / 2) x $3] = $1,144.95 + $1,144.50 = $2,289.45
if K (I believe K = S) increases to lets says $200:
EOQ = √[(2 x 200 x 6,240) / 3] = 912 units
annual total cost = [(6,240 / 912) x $200] + [(912 / 2) x $3] = $1,368.42 + $1,368 = $2,736.42
if we used EOQ = 763, then:
annual total cost = [(6,240 / 763) x $200] + [(763 / 2) x $3] = $1,635.65 + $1,144.50 = $2,780.15
EBITDA stands for:________
A) Earnings before Income Taxes, Discontinued Operations and Other Adjustments
B) Earnings before Income Taxes, Discontinued Operations and Other Amortization
C) Earnings before Interest, Taxes, Depreciation and Amortization
D) Earnings before Interest, Taxes, Discontinued Operations and Amortization
Answers
Match the expense recognition approaches with the most appropriate accounting event, to satisfy proper matching of revenues with expenses.
Drag statements on the right to match the left.
Cause-and-effect relationship Cost of goods sold
Specific time period Monthly salary payments to an office employee
Without regard to related revenue
in the period incurred Advertising expenditures
Answers
Answer:
Cause-and-effect relationship - Cost of goods sold
This follows the cause and effect relationship because if the goods were not to be sold they would not have incurred a cost. Because the goods were sold, the business incurred costs.
Specific time period - Monthly salary payments to an office employee
The salary is monthly which means that it is for the specific time period of a month.
Without regard to related revenue in the period incurred - Advertising expenditures.
Advertising expenses are made without regard to the related revenue in the period because there is no sure and specific way to measure the impact of advertising on revenue.
"Probably the most fertile areas for career opportunities today can be found in the investments and financial markets fields. " Do you think these two fields are still as fertile as he stated with market fluctuations in the past few years? Defend your answer.
Answers
Answer:
Yes, I think these two fields are the most attractive fields for career opportunities
Explanation:
Following are the reasons why investment and financial institutions are most fertile areas for future and current career opportunities:
Growing Economies: The economies are growing and the wealth is been created as different countries are busy in creating comparative advantages and this has uplifted the living standards of their people.The uplift in living standards of people have created increased investment in financial institution. This is the reason why investment and financial institutions are very attractive to all of the investors.Growing Population and technological advancements has also increased the demand for investments in different sectors which has increased the demand for investment and financial institutions to resolve the funding gap between the investor and the company. The complexity related to the management of treasury departments of companies has increased in the past 2 decades which has resulted in over reliance of treasury departments on the investment and financial institutions.The investment and financial institutions has introduced new products like futures, options, mutual funds, fixed rate account, etc which has increased the investment.The government policies for ease of business also includes the easing the financial institution to provide finance to fund seekers to uplift the economy shows how important is the role of the financial institutions.As the companies are entering international markets, the use of financial products has been increased and near future we will have millions of multinational organizations using investment and financial institution's products.eco 203 According to monetarists, if the money supply expands, how are households most likely to respond
Answers
Answer:
They will spend it
Explanation:
According to Monetarists, when money supply increases/expands, economic activity will increase. That means households will respond to such change by spending it.
The Monetarist Theory is an economic concept which postulates that when there is a change in money supply, the rate of economic growth and behavior of business cycle is determine.
A bond with a coupon rate of 5.16 percent and semiannual coupon payments matures in 12 years. The YTM is 6.37 percent. What is the effective annual yield?
Answers
Answer:
6.47%
Explanation:
The computation of effective annual yield is shown below:-
Annual YTM = 6.37%
Semiannual YTM = 6.37% ÷ 2
= 3.185%
Effective Annual Yield = (1 + Semiannual YTM)^2 - 1
= (1 + 0.03185)^2 - 1
= 1.03185^2 - 1
= 1.0647 - 1
= 0.0647
or
= 6.47%
Hence, the effective annual yield is 6.47% i.e come after applying the above formula
If the nominal interest rate is 4.7% and the inflation rate is 3.4%, what is the real interest rate?
Answers
Answer:
1.3%
Explanation:
The real interest rate is calculated by subtracting the inflation rate from the nominal interest rate.
real interest rate=nominal interest rate-inflation rate
nominal interest rate=4.7%
inflation rate= 3.4%
real interest rate=4.7%-3.4%
real interest rate=1.3%
According to this, the answer is that the real interest rate is 1.3%.
If reserve demand is volatile, in order for the central bank to keep interest rates from being volatile, it must:
Answers
Complete Question:
If reserve demand is volatile, in order for the central bank to keep interest rates from being volatile, it must:
a. Target the quantity of reserves.
b. Set targets for both interest rates and the quantity of reserves.
c. Not target the interest rates.
d. Let the quantity of reserves fluctuate.
Answer:
d. Let the quantity of reserves fluctuate.
Explanation:
Volatility in reserve demand is offset by the central bank allowing the quantity of reserves to fluctuate in line with demand. By manipulating and adjusting the reserve levels, a central bank can prevent volatile fluctuations in currency. It does this by affecting the exchange rate and increasing the demand for and value of the country's own currency. By varying the reserve requirements, the liquidity position of the banks and hence their ability to lend are affected as an anti-inflationary measure with reduction of potential credit expansion.
The extra expense incurred by a business to stay in operation following a fire is an example of a(n)
Answers
Answer:
indirect loss
Explanation:
Indirect loss is the loss, which occurs due to some unavoidable exceptional circumstances. These situations are not generally expected and usually do not comprise the day to day activity.
In the given case also, a fire occurs which destroy the operations, now in order to re-function the operations of the business the company needs to expense on some activities, as the premises require transformation.
Further with these expenses as re installation, repairs and maintenance the company will start operating again, but since they come from an unexpected situation, it was an expense on indirect loss.
You deposited $5,000 from a late uncle on your 9th birthday.
A) If you earned 10.5% interest each year, how much would you have when you turn 65?
B) If you earned 10.5% interest compounded monthly each year, how much would you have when you turn 65?
C) If you wanted to have $2 million when you turn 65, what rate of interest would you need to earn assuming annual compounding?
Answers
Answer:
A) If you earned 10.5% interest each year, how much would you have when you turn 65?
assuming annual compounding:
future value = $5,000 x (1 + 10.5%)⁵⁶ = $1,340,471.47
B) If you earned 10.5% interest compounded monthly each year, how much would you have when you turn 65?
monthly compounding = 10.5% / 12 = 0.875% per month
future value = $5,000 x (1 + 0.875%)⁶⁷² = $1,743,869.89
C) If you wanted to have $2 million when you turn 65, what rate of interest would you need to earn assuming annual compounding?
$2,000,000 = $5,000 x (1 + r)⁵⁶
(1 + r)⁵⁶ = $2,000,000 / $5,000 = 400
(1 + r)⁵⁶ = 400
⁵⁶√(1 + r)⁵⁶ = ⁵⁶√400
1 + r = 1.1129
r = 1.1129 - 1 = 11.29%