Answer:
False
Explanation:
The growth of 4% for 25 years would nominally signify a 100% increase and you might think that the economy has double its size. But you must take into account that’s this is a compound growth then the economy would reach the double of its size before 25 years.
Think that he initial size of the economy is 10 and it grows 4% then an annual growth will be 10,4 now the compound grow is adding up 0,4 to the initial size of 10. Then you recalculate a growth of 4% for the second year this means 10.816 grow.
If you notice the extra 0.016 increase for the second year is the effect of calculating the 4% increase based on the previous size 10 plus 0.4.
Answer:
It will require quarterly deposits of $ 171.06
Explanation:
first we need to calcualte the present value of the retirement funds
and then, we will calcualte the PTM to achieve it.
1) present value of 40,000 semiannually over 10 years descounted at 6% cuarterly
PTM 40,000 dollars
time 20 810 years x 2 payment per year)
rate 0.12 (0.06 x 2)
PV $298,777.75
Now, we calcualte which PTM generate this amount over the course of 20 years
PV $298,777.74
time 80 (20 years x 4 quarter per year)
rate 0.06
C $ 171.063
<u>Answer:</u>
<u>To determine proper allocation of resources since the business is relatively new.</u>
<u>Explanation:</u>
Remember, by using the <em>monthly</em> forcasting method in the first year of operations, it allows for total monthly expenses to be weighed against the total monthly revenue.
However, after gathering some experience from the first year's operations, using the <em>quarterly</em> method would allow for easy comparism of the performance of preceding years. ,
Answer: False
Explanation: The reason is that Retained earning are considered as opportunity cost. Because retained earnings could be used to distribute profit among shareholders and they could invest somewhere to get return. Or retained earnings could be retained by the firm to invest in the company activities itself.
