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lawyer [7]
3 years ago
7

If Gerry makes a deposit of $1,500 at the end of each quarter for five years, how much will he have at the end of the five years

assuming a 12% annual return and quarterly compounding?
Business
1 answer:
Basile [38]3 years ago
7 0

Answer:

The Final Value is $40,305.56

Explanation:

Giving the following information:

Gerry deposits $1,500 at the end of each quarter for five years.

Interest rate= 12% quarterly compounding

To calculate the final value, we need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= quarterly deposit= 1,500

i= 0.12/4= 0.03

n= 5*4= 20

FV= {1,500*[(1.03^20)-1]} / 0.03

FV= $40,305.56

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If the firm sells its product at the market price of $10 per unit, how many workers should the firm employ to maximize profit if
Bingel [31]

Answer:

the data regarding output and the quantity of labor is missing, so I looked for a similar question and found the attached image.

if one employee is hired, total production = $80, and total cost = $55

if two employees are hired, total production = $150, and total cost = $110

if three employees are hired, total production = $210, and total cost = $165

if four employees are hired, total production = $260, and total cost = $260

hiring <u>four employees</u> should maximize profits since MC = MR

7 0
3 years ago
Blue Spruce Corp. uses the percentage-of-receivables basis to record bad debt expense and concludes that 2% of accounts receivab
dedylja [7]

Answer:

The adjusting journal entry would be:

Debit: Bad debts expense $5,317

Credit: Allowance for Doubtful Accounts $5,317

Explanation:

Debit: Bad debts expense $5,317

Credit: Allowance for Doubtful Accounts $5,317

Explanation of the entry:

Allowance for doubtful debts at the end of the year = $402,000 × 2% = $8,040

Credit balance at the start = $2,723

Allowance for doubtful accounts = $8,040 - $2,723 = $5,317

The Allowance for Doubtful Accounts presently has a credit balance of $2,723 and allowance for doubtful debt at the end of year is $8,040, you need to enter an additional credit amount of $5,317 into the Allowance for Doubtful Accounts. The other part of this adjusting entry will be a debit of $5,317 to Bad Debts Expense.

6 0
3 years ago
Starset, Inc., has a target debt-equity ratio of 1.15. Its WACC is 8.6 percent, and the tax rate is 21 percent.
aev [14]

Answer:

a. 4.94%

b. 11.48%

Explanation:

Here in this question, we are interested in calculating the pretax cost of debt and cost of equity.

We proceed as follows;

a. From the question;

The debt equity ratio = 1.15

since Equity = 1 ; Then

Total debt + Total equity = 1 + 1.15 = 2.15

Mathematically ;

WACC = Cost of equity x Weight of equity + Pretax Cost of debt x Weight of debt x (1-Tax rate)

Where WACC = 8.6%

Cost of equity = 14%

Weight of equity = 1/(total debt + total equity) = 1/(1+1.15) = 1/2.15

Pretax cost of debt = ?

Weight of debt = debt equity ratio/total cost of debt = 1.15/2.15

Tax rate = 21% = 0.21

Substituting these values, we have;

8.6% = 14% x 1/2.15 + Pretax cost of debt x 1.15/2.15 x (1-21%)

8.6% = 14% x 1/2.15 + Pretax cost of debt x 1.15/2.15 x (1-21%)

Pretax cost debt = (8.6%-6.511628%)/(1.15/2.15 x (1-21%))

Pretax cost of debt = 4.94%

b. WACC = Cost of equity x Weight of equity + After tax Cost of debt x Weight of debt

8.6% = Cost of equity x 1/2.15 + 6.1% x 1.15/2.15

Cost of equity = (8.6%-3.26279%)/(1/2.15)

Cost of equity = 11.48%

6 0
3 years ago
You sell t-shirts in the street corner in order to support some of your tuition costs. Around the middle of the semester, your f
Mariana [72]

Answer: (B) Inelastic

Explanation:

 According to the question, when the price of the t-shirt get increased then it generate the high revenue. This result into the decrease in the given quantity and it is smaller change as compared to the change in the price.

This process of the quantity results into the good in the inelastic. Inelastic is the term which is refers to the static quantity of the various types of good and the services and its price are get changed.

Therefore, Option (B) is correct.

7 0
3 years ago
Worker A is more effective than Worker B. Both workers become less effective as their workloads increase. Both workers are paid
sineoko [7]

Answer: False

Explanation:

Question mentions that even though Worker A and Worker B are both paid the same salary and become less effective as their workload increase, Worker A is still more effective than Worker B.

The optimal allocation therefore would be one where Worker A get more of the 200 units of production than Worker B because they would be able to produce more as they are more effective.

8 0
3 years ago
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