Answer:
3.73%
Explanation:
The computation of the rate of interest that makes the equivalent is shown below:
As we know that
Present value=Cash flow × Present value discounting factor ( interest rate% , time period)
Let us assume the interest rate be x
where,
Present value of $400,000 is
= $400,000 ÷ 1.0x ^5
And,
Present value of $1,000,000 be
= $1,000,000 ÷ 1.0x^30
Now eqaute these two equations
$400,000 ÷ 1.0x^5 = $1,000,000 ÷ 1.0x^30
(1.0x^30) ÷ (1.0x^5) = $1,000,000 ÷ $400,000
1.0x^(30 - 5)=2.5
1.0x^25=2.5
1.0x = (2.5)^(1 ÷ 25)
x =1.03733158 - 1
= 3.73%
Answer:
$1,758.71
Explanation:
NPV = -$62,000 + $16,500 / 1.148 + $23,800 / 1.1482 + $27,100 / 1.1483 + $23,300 / 1.1484
NPV = $1,758.71
Answer:
<u><em>By means of a budget he prepared.</em></u>
Explanation:
According to the information available, Shing-fong has a carefully thought out strategy. Here's some of what he does;
- he keeps tracks of his finances by means of a budget plan.
- he views all his transactions also checking his debit or credit cards to keep track of how much he spends
- Shing-Fong avoids eating out as much as he used to and preparing cheaper food at home.
- he also avoids unnecessarily spending with friends whenever he is invited.
Vision, decision-making style, and delegation.
Answer:
A stock market crash will cause aggregate demand to decrease, which the Fed could offset by purchasing bonds.
Explanation:
A stock market crash happens when the prices of stocks fall generally and suddenly that investors are taken unawares. It triggers some reactions which further threatens the market overall and depresses aggregate demand. It also weakens investors' confidence, reduces productivity, consumption, and the ability of firms to fund their activities, and leads the economy to recession.
Stock market crashes are triggered by unexpected economic event, catastrophe, or crisis. For example, the collapse of Lehman brothers as a result of bankruptcy. They are further exacerbated by panic reactions, underlying economic underperformance, and investors' fear.
The Fed as the US central bank in charge of the monetary policy can try to stem the downward spiral caused by a stock market crash by purchasing bonds. This makes more money available in the economy for consumption.
Before the crash, the Fed can decide to bail out the institution, e.g. an airline or a financial institution, that could trigger a crash. But, most stock market crashes are not foreseen.
