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hammer [34]
3 years ago
10

You want to buy an Audi A8 7 years from now. You have priced these cars and found that they currently sell for $83,800. You beli

eve that the price will increase by 10% per year for the next 7 years. You can presently invest to earn 10% annual interest, compounded annually. How much will you need to invest every year (hint: PMT) to be able to afford to buy the car in 7 years?
Business
1 answer:
lana [24]3 years ago
8 0

Answer:

We to invest <em> $ 17,213 per year to buy the car in  seven years from now</em>

Explanation:

<u><em>First, we solve for the future value of the car:</em></u>

Principal \: (1+ r)^{time} = Amount

Principal 83,800.00

time 7.00

rate 0.10000

83800 \: (1+ 0.1)^{7} = Amount

Amount 163,302.49

<u><em>Then, for the PTM to achieve tham amount in 7 years:</em></u>

FV \div \frac{(1+r)^{time} -1}{rate} = C\\

FV 163,302

time 7

rate 0.1

163302.49298 \div \frac{(1+0.1)^{7} -1 }{0.1} = C\\

<em>C  $ 17,212.981 </em>

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A 15% increase in sales resulted in a 40% increase in net income for Company A and a 60% increase in net income for Company B. B
Ivahew [28]

company B has the greater operating leverage

What is operating leverage?

A cost-accounting method called operating leverage assesses how much a company or project can raise operating income by raising revenue. A company with significant operating leverage creates sales with a high gross margin and low variable costs.

The break-even point of a business is determined using operating leverage, which also aids in determining the right selling prices to cover all expenditures and make a profit.

Regardless of whether they sell any units of product, businesses with significant operational leverage must cover a bigger amount of fixed costs each month.

Low-operating-leverage businesses may have high variable costs that are directly related to sales, but they also have fewer monthly fixed expenses.

Learn more about operating leverage with the help of given link:-

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3 0
1 year ago
Managers in international businesses will need to evaluate the attractiveness of a country as a market or location for a facilit
ludmilkaskok [199]

Answer: Please refer to Explanation

Explanation:

When Evaluating a country's attractiveness for investment, there are several factors that should be evaluated. Key amongst them are, Benefits, Costs and Risks.

Under Benefits, the economy is evaluated based on the benefits it brings to the table. It's strengths and Opportunities. The goal is to see if these benefits present the company with adequate enough incentives to want to invest.

Under Costs, the cost of setting up and thriving is evaluated. What does the company have to pay and who do they have to pay it to in order to set up properly.

Under Threats, the factors that could adversely affect the company as a result of Investing in the country are evaluated. This is very important to know so that if need be, contingencies can be established.

Classifying the above.

1. Middle-class population growth potential. EVALUATE BENEFITS.

The middle class are the main purchasers of goods and services in the economy. In evaluating benefits the potential growth rate of the middle class should be evaluated.

2. First-mover advantages. EVALUATE BENEFITS.

Evaluating the potential benefits to be had from investing first in a country is part of Benefits Evaluation.

3. Bribe payments. EVALUATE COSTS.

Bribery payments are a cost when it comes to setting up in corrupt nations. They need to be evaluated as costs.

4. Unexpected political change. EVALUATE RISKS.

Under the evaluation of risks, this should be evaluated because a new Political leadership could have a different attitude to the company and this is a threat.

5. Infrastructure issues. EVALUATE COSTS.

Under the evaluation of cost there must be an evaluation of infrastructural issues in the country. If there are infrastructural challenges, the cost of setting up will be higher because depending on the infrastructure you'd have to bring in infrastructure from other areas and that would be expensive.

6. Resolving contract disputes. EVALUATE COSTS.

What are the costs of resolving contract disputes in the country. If they are favourable then the country is fine.

7. Free market economy. EVALUATE BENEFITS.

A free Market Economy is very useful to Entreprise. The type of economy needs to be evaluated therefore to see if it is a Free Market Economy that can benefit the company.

8. Economic uncertainty. EVALUATE RISKS.

How stable is the economy of the country in question. A country with an unstable Economy is one with a lot of Uncertainty and any company going in there will have to risk suffering losses if the Economy goes through peril.

7 0
3 years ago
Subjective performance evaluations are subject to several rater errors, which makes objective measures seem a better alternative
Mandarinka [93]

Answer:

A Subjective performance evaluation is more feasible when evaluating jobs that cannot easily be evaluated by numbers, in finding problems such as ethical errors that objective evaluation cannot identify and in identifying the rate of achievement of work goals that cannot be recorded in an objective evaluation.

Explanation:

Though Objective evaluation has been the more favored form of evaluation for valid reasons, there are still situations where subjective performance evaluation does a better job in the workplace.

Some jobs for example, the job of an attorney, cannot easily be objectively evaluated. In this situation, it falls on the employer to evaluate the performance of the employee by using measurements like team play, professionalism and client service.

In objective analysis, some ethical approaches are overlooked and the achievement of the set goal is the major criterion for ratings. This affords employees the opportunity to use unethical means to achieve set targets and the objective performance evaluation skips it, leaving them safe and with high ratings. In subjective performance ratings however, the employer having the power to rate employers, could expose these unethical behaviors faster and actions, taken on them.

In the workplace, certain goals are set in overall goals, as a method to achieving the overall set target. In an objective performance rating, an employee could bypass these and still appear to have achieved the overall goal. An objective evaluation will miss this but a subjective evaluation could pick this out and make rating each employee based on these soft goals and overall goal achievable.

3 0
3 years ago
All of the following statements about exit in monopolistic competition are true, except: Select the correct answer below: When e
Murljashka [212]

Answer:

When economic losses induce firms to leave the industry, demand for the original firm decreases.

Explanation:

A monopolistic competition is when there are many firms selling differentiated products in an industry. A monopoly has characteristics of both a monopoly and a perfect competition. the demand curve is downward sloping. it sets the price for its goods and services.

An example of monopolistic competition are restaurants  

When firms are earning positive economic profit, in the long run, firms enter into the industry. This drives economic profit to zero

If firms are earning negative economic profit, in the long run, firms leave the industry.  This drives economic profit to zero

in the long run, only normal profit is earned

5 0
2 years ago
Leader Corporation Company uses a job-order costing system with a single plantwide pre-determined overhead rate based on machine
taurus [48]

Answer:

Selling price per unit= $196

Explanation:

<u>First, we need to calculate the predetermined overhead rate:</u>

<u></u>

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= (400,000 / 50,000) + 6

Predetermined manufacturing overhead rate= $14 per machine hour

<u>Now, we can allocate overhead and calculate the total cost:</u>

<u></u>

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Allocated MOH= 14*100= $1,400

Total cost= 1,400 + 750 + 2,750

Total cost= $4,900

<u>Finally, the selling price per unit:</u>

<u></u>

Unitary cost= 4,900/40= $122.5

Selling price= 122.5*1.6

Selling price= $196

3 0
3 years ago
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