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harina [27]
3 years ago
13

Irene plans to retire on January 1, 2020. She has been preparing to retire by making annual deposits, starting on January 1, 198

0, of 2300 dollars into an account that pays an effective rate of interest of 8.4 percent. She has continued this practice every year through January 1, 2001. Her goal is to have 1.35 million dollars saved up at the time of her retirement. How large should her annual deposits be (from January 1, 2002 until January 1, 2020) so that she can reach her goal
Business
1 answer:
worty [1.4K]3 years ago
7 0

Answer:

$16,876

Explanation:

first we have to calculate how much money Irene saved until January 1, 2001:

P = PMT ×   [(1 + r)ⁿ - 1] / r

  • PMT = 2,300
  • r = 8.4%
  • n = 22

P = 2,300 ×   [(1 + 8.4%)²² - 1] / 8.4% = $134,089

if she stops making any more payments, in 19 years those $134,089 will be worth:

FV = PV x (1 + r)ⁿ

  • PV = $134,089
  • r = 8.4%
  • n = 19

FV = 134,089 x (1 + 8.4%)¹⁹ = $620,797

that means she still needs to get $1,350,000 - $620,797 = $729,203

we can use the first formula to determine the payments she will need to make during the next 19 years:

P = PMT ×   [(1 + r)ⁿ - 1] / r

  • P = 729,203
  • r = 8.4%
  • n = 19
  • PMT = ???

PMT = P /  {[(1 + r)ⁿ - 1] / r}

PMT = 729,203 / {[(1 + 8.4%)¹⁹ - 1] / 8.4%} = 729,203 / 43.21 = $16,876

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Answer:

A) Information asymmetry.

Explanation:

An information asymmetry can be defined as a situation where there is an imbalance of information between two parties in their knowledge of important points, factors and details. Thus, because one party has more information or knowledge than the other, this usually results in an inefficient outcome and or failure.

The theory of information asymmetry was developed and introduced by three (3) notable Nobel prize winning economists, namely; Michael Spence, George Akerlof and Joseph Stiglitz.

In this scenario, Matthew a divisional manager at Venus Inc. reports to the CEO of the company. Matthew has more employees working for him than required and he has not told the CEO about this, even though there are other departments that are in need of more employees.

<em>Hence, the concept illustrated here is an information asymmetry.</em>

3 0
3 years ago
Consider the following two separate events for a company during the year: 1. Loss on sale of investments = $30. 2. Unrealized ga
Serggg [28]

Answer:

A.) Net income = $(30); Comprehensive income = $(10).

Explanation:

First, the multiple choices to the question

A.) Net income = $(30); Comprehensive income = $(10).

B.) Net income = $(30); Comprehensive income = $20.

C.) Net income = $0; Comprehensive income = $(10).

D.) Net income = $(10); Comprehensive income = $20.

The question is to determine the effect of the two events listed on the Net Income as well as the comprehensive income

First, we look at event one:

The loss of sales of investment = #30

The effect of this is to debit the income statement because it is a net loss of $30. It brings a reduction to the income side. Income will usually have a credit balance, but a net loss reduces income therefore, it will be debited.

Second, the Unrealized gain on investment from increase in fair value = $20

The effect is $10 which represents $30 from the loss - $20 from the unrealised gain. It will however, also decrease the comprehensive income by the $10.

7 0
3 years ago
Carmen is a member of a student taskforce that was asked to recommend solutions to the university's budget problem. when she not
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Answer: democratic leadership

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Carmen left some room for discussion and this means it is a democratic approach in leadership.  


8 0
3 years ago
According to mesmer-magnus and viswesvaran, organizational employees have three options to address an unsatisfactory situation f
zavuch27 [327]

According to Mesmer-Magnus and Viswesvaran, organizational employees have three options to address an unsatisfactory situation faced within an organization. These include: exiting the organization, remaining silent, voice discontent.

<h3>What are organizational employees?</h3>

They are the ones who effectively contribute to an organization's smooth operation. They work really hard to deliver what they promise and complete the specified tasks by the deadline. The culture of the workplace is significantly influenced by the personnel.

Through negotiation techniques, organizational members develop their identities as runners. Members take up the role of models for new members in a continuing identity. Running as a societal norm might be supported by an organization.

The foundation of a solid, long-lasting corporation is its workforce. No matter what level, employees are in charge of the company. This means that their fortitude, fidelity, and devotion, as well as their emotional ties to the company, cannot be valued as assets.

Mesmer-Magnus and Viswesvaran assert that there are three ways for organizational personnel to deal with problematic circumstances they encounter. These include leaving the company, keeping quiet, and voicing your dissatisfaction.

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7 0
1 year ago
Trusper Company was organized on January 1, Year 1 and has had 1,000 shares of $200 par value, 10% cumulative preferred stock ou
snow_tiger [21]

Answer:

$50,000

Explanation:

Generally, preferred stockholders receive dividends earlier than common stockholders. Moreover, as the preference shareholders are cumulative, if they do not receive dividends current year, they will receive in the next year. Finally, preferred dividend is fixed until there are new issuance of preferred stock.

Preferred dividends for Year 1 = 1,000 shares × $200 × 10% = $20,000

For year 2 = $20,000

Given, total dividends in year 1 = $15,000

Therefore, company provides $15,000 to preferred dividends. No common dividends in year 1.

However, in the next year (Year 2), the company will pay $5,000 + $20,000 = $25,000 to preferences shareholders.

Therefore, remaining dividends are for common stockholders.

Year 2 common stockholders dividends = $75,000 - $25,000 = $50,000.

8 0
3 years ago
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