5. Which of the following is an example of global economies of scale? a. Johnson & Johnson makes fourteen different varietie
1 answer:
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Answer:
Yes
Explanation:
From her current age of 28 to her retirement age of 65, RuthAnn has (65 - 28 =) 37 more years to work.
If she saves 11% of her annual income of $36,278.13 into a 401(k), she will be setting aside (11% * 36,278.13 =) $3,990.59 into the 401(k) account annually.
At 7.1% compounding rate, in 37 years, RuthAnn would have set aside an amount estimated by the future value of an annuity formula.
where FV is the future value, the amount that would have been set aside,
A = is the annual savings,
r = is the compounding rate, and
n = is the number of years.
Therefore, the total amount that would be saved up after 37 years =
= (3,990.59 * 11.6535)/0.071
= $654,990.31.
By spending $32,523 annually from an account earning 7.1% compound interest rate for 30 years, the present value of the total amount needed by RuthAnn today that will be sufficient for her retirement spending can be estimated using the present value of an annuity formula.
=
= (32523 * 0.8723)/0.071
= $399,574.83.
Since the amount saved up ($654,990.31) is more than the total amount required for RuthAnn's retirement ($399,574.83), RuthAnn has more than sufficient to meet her Retirement goal.
Specifically, the amount she has saved up can support a maximum annual spending which can be estimated from the present value of an annuity formula.
where PV = the amount saved up, $654,990.31,
A = the annual spending which we are estimating,
r = the 7.1% compound interest rate,
n = the number of years to retirement.
= 654,990.31 = (A * 0.8723)/0.071
= A = 654,990.31/0.8723 * 0.071
= A = 53,312.29
Thus, the amount saved up can support a maximum retirement spending of $53,312.29, which is higher than the $32,523 annual income needed by RuthAnn for her retirement.
The decrease in demand would be illustrated by a change from A to C.
<h3>What will be the change?</h3>The demand curve is a downward sloping curve that shows the relationship between price and the quantity demanded. There is a negative relationship between price and quantity demanded.
A change in demand is caused by other factors other than the price of the good. Other factors include a change in income, a change in consumer taste or a change in the price of substitute goods.
When there is a change in demand, the demand curve would shift either to the right or to the left. When demand decreases, the demand curve would shift to the left. When demand increases, the demand curve would shift to the right.
Since, the demand for donuts have decreased, the demand curve would shift to the left. This would be a shift from A to C.
Please find attached the complete question. To learn more about the demand curve, please check: brainly.com/question/25140811
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