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2 years ago

A perpetuity pays $100 each and every year forever. the duration of this perpetuity will be:_________

Business

1 answer:

Scrat [10]2 years ago

7 0

Perpetuity pays $100 each and every year forever. the duration of this perpetuity will be 12.11

Yield rate = 9% or 0.09

Duration of perpetuity = (1+ Interest Rate) / Interest Rate

= 1+ 0.09 / 0.09

= 1.09 / 0.09

= 12.11

A perpetual annuity is a never-ending annuity or series of cash payments that lasts forever. True eternity is rare. For example, the UK government has issued them in the past. These were known as consoles and were all eventually redeemed in 2015. Cash flow is endless.

Learn more about perpetuity here: brainly.com/question/24261067

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Work cell at Chris Ellis Commercial Laundry has a workstation with two machines, and each unit produced at the station needs to

choli [55]

Answer:

24 minutes

Explanation:

The computation of the process time of the work cell is shown below:

Throughput time is the time that is needed to produced a finished good product. It involves the manufacturing process time and the time for converting the raw material into a finished product

Therefore

Throughput time = [1 unit × (60 min ÷ 5 units)] × 2

= 24 minutes

6 0

4 years ago

In the circular flow of income, Keynesian equilibrium obtains when a) All the individual sectors are in equilibrium: S=I, T=G, M

olga nikolaevna [1]

Answer:

The answer is B:

The aggregate injections equal aggregate withdrawals S+T+M = I+G+X.

Explanation:

In the circular flow of income, Keynesian equilibrium obtains when The aggregate injections equal aggregate withdrawals S+T+M = I+G+X.

Where S = Saving

T = Taxes

Imports = (M)

I = Investments

G = Government spending

X = Exports

An equilibrium is approached when there is a balance between the savings, taxes and imports and investments, government spendings and exports.

5 0

3 years ago

A company has outstanding accounts payable of $30,000 and a short-term construction loan in the amount of $100,000 at year end.

gayaneshka [121]

Answer:

Explanation:

Accounts payable is included in the current liability according to international financial reporting standards (IFRS). Although the construction loan was actually payable at year-end, if the company has both the willingness and ability to refinance with long-term debt, the $100,000 construction loan may be included at year-end in long-term liabilities. Therefore, current liabilities of $30,000 and long-term liabilities of $100,000 should be reported on the balance sheet.

The extracts of the statement of financial positions are given below:

Non-current liabilities:

Refinanced loan $100,000

Current liabilities:

Accounts payable $ 30,000

5 0

4 years ago

The Optima Mutual Fund has an expected return of 20%, and a volatility of 20%. Optima claims that no other portfolio offers a hi

mel-nik [20]

Answer:

(a) 0.75

(b) 0.2

Explanation:

(a)Calculating Sharpe ratio-

Given-

Expected return = 20%,

Risk free rate of return = 5%,

Volatility = 20%

Sharpe ratio = (Mean portfolio return - Risk free return) ÷ Standard deviation of portfolio

Sharpe Ratio = (20% - 5%) ÷ 20%

= 0.75

(b) Given-

Standard deviation = 40%,

Portfolio return= 11%,

Risk free return will remain same as 5%

Sharpe Ratio of Ebay = (11% - 5%) ÷ 40%

Sharpe Ratio of Ebay = 0.15

Correlation of Ebay with Optima fund:

= Sharpe ratio of Ebay ÷ Sharpe ratio of Optima fund

= 0.15 ÷ 0.75

= 0.2

Sharpe ratio of Optima = 0.75

Correlation of Sub-Optima fund with Optima fund:

= Sharpe ratio of Sub-Optima fund ÷ Sharpe ratio of Optima fund

0.80 = Sharpe ratio of Sub-Optima fund ÷ 0.75

Sharpe ratio of Sub-Optima fund = 0.80 × 0.75

= 0.6

6 0

3 years ago

Agreement and disagreement among economists

BaLLatris [955]

Answer:

differing opinions on the point we are on the Laffer Curve

Explanation:

The Laffer Curve is a supply side economic theory developed by Arthur Laffer in 1974.

The curve depicts the relationship between tax rates and tax revenue

According to this theory, higher income tax rate reduces the incentive of labour to work and invest due to the fact that labour would have to pay higher tax. This means that at some point, increase in the tax rate would decrease government revenue rather than increase it.

The theory submits that there is an optimal tax rate at which tax income is maximised. Once this point is surpassed, increase in tax rate would reduce government revenue

Price ceiling is when the government or an agency of the government sets the maximum price for a product. It is binding when it is set below equilibrium price.

Effects of a binding price ceiling

1. It leads to shortages

2. it leads to the development of black markets

3. it prevents producers from raising price beyond a certain price

4. It lowers the price consumers pay for a product. This increases consumer surplus

A rent ceiling would lead to shortage of houses and a reduction of the quality of available housing.

3 0

3 years ago