Answer:
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- <em><u>Option e. $41,442.89</u></em>
Explanation:
An annual payment over a <em>10-year period</em>, with the<em> first payment one year from now </em>and <em>3.5 percent annual growth</em> is modeled by the equation:
![PV=\dfrac{C}{r-g}\times \big (1-\big(\dfrac{1+g}{1+r}\big)^n\big)](https://tex.z-dn.net/?f=PV%3D%5Cdfrac%7BC%7D%7Br-g%7D%5Ctimes%20%5Cbig%20%281-%5Cbig%28%5Cdfrac%7B1%2Bg%7D%7B1%2Br%7D%5Cbig%29%5En%5Cbig%29)
Substitute with:
- C = $5,000
- r = 6.5% = 0.065
- g = 3.5% = 0.035
- n = 10
![PV=\dfrac{\$ 5,000}{0.065-0.035}\times \big (1-\big(\dfrac{1+0.035}{1+0.065}\big)^{10}\big)](https://tex.z-dn.net/?f=PV%3D%5Cdfrac%7B%5C%24%205%2C000%7D%7B0.065-0.035%7D%5Ctimes%20%5Cbig%20%281-%5Cbig%28%5Cdfrac%7B1%2B0.035%7D%7B1%2B0.065%7D%5Cbig%29%5E%7B10%7D%5Cbig%29)
![PV=\$ 41,422.89\leftarrow answer](https://tex.z-dn.net/?f=PV%3D%5C%24%2041%2C422.89%5Cleftarrow%20answer)
Answer:
The objective of present Value is to present a set of cash flows based on their estimated fair value; to help decision makers in assessing the viability or otherwise of an option of investments.
Values don't stay the same year on year, various influences act to most times make the same $ amount lessened by tomorrows valuation; some factors like inflation, obsolescence, opportunity cost of not investing in other activities (cost of capital)....all these play a role in determining time value of money.
Present value attempts to harmonize all these influences and present a fair value of our $ dollar estimate of future values based on the impact of these factors.
Answer:
The correct answer is option b.
Explanation:
A worker in Freedonia can produce either 6 units of corn or 2 units of wheat per year.
A worker in Sylvania can produce either 2 units of corn or 6 units of wheat per year.
The opportunity cost of a unit of corn for Freedonia
= ![\frac{2}{6}](https://tex.z-dn.net/?f=%5Cfrac%7B2%7D%7B6%7D)
= 0.33
The opportunity cost of a unit of corn for Sylvania
= ![\frac{6}{2}](https://tex.z-dn.net/?f=%5Cfrac%7B6%7D%7B2%7D)
= 3
So, we see that Freedonia has a comparative advantage in producing corn as it has a lower opportunity cost.
The opportunity cost of a unit of wheat for Freedonia
= ![\frac{6}{2}](https://tex.z-dn.net/?f=%5Cfrac%7B6%7D%7B2%7D)
= 3
The opportunity cost of a unit of wheat for Sylvania
= ![\frac{2}{6}](https://tex.z-dn.net/?f=%5Cfrac%7B2%7D%7B6%7D)
= 0.33
So, we see that Sylvania has a comparative advantage in producing wheat as it has a lower opportunity cost.
With 10 workers, Freedonia will produce 60 units of corn and 0 units of corn and Sylvania will produce 60 units of wheat and 0 units of corn.
Without trade, Freedonia produces and consumes 30 units of corn and 10 units of wheat per year. Sylvania produces and consumes 10 units of corn and 30 units of wheat.
The war has caused the combined yearly output of the two countries to decline by 20 units of corn and 20 units of wheat.
Answer:
e) $23.89
Explanation:
The question is to determine the value of Canine Crates stock today based on a return rate of 13%
The first step is to determine the yearly value based on the dividend for three years as follows
D1= The annual dividend x 2 ( since Canine Crates plans to double the amount each year for three years
D1= $0.45 x 2 = $0.9
D2= $0.90 x 2 = $1.80
D3= $1.80 x 2 = $3.60
Based on these calculations, we calculate the value of the stock by adding the present values of the dividend of each year.
This is based on the following formula
Dividend per year / (1+r)∧n
= Dividend per year
r = required rate
n= period
Value of the stock = $0.9 / (1.13) + $1.80 / (1.13)∧2 + $3.60/ (1.13)∧3
The value of the stock = $23.89
Answer:
1,304 copies
Explanation:
Overage cost (Co) means like cost of over ordering
Co = Cost price - Salvage value
Co = $1.50 - $0 (No salvage value)
Co = $1.50
Underage cost (Cu) means like cost of under ordering
Cu = Selling price - Cost price
Cu = $5.00 - $1.50
Cu = $3.50
Service level = Cu / (Cu + Co)
Service level = $3.50 / ($3.50 + $1.50)
Service level = $3.50 / $5.00
Service level = 0.7
Z-value = NORMSINV (Service level), Using Ms Excel
Z-value = NORMSINV (0.7)
Z-value = 0.52
Optimal Order Quantity (Q) = Mean Demand + (Z-value*Standard deviation)
Optimal Order Quantity Q = 1,200 + (0.52*200)
Optimal Order Quantity Q = 1,200 + 104
Optimal Order Quantity Q = 1,304 copies