Answer:
financial freedom
Explanation:
the reasons people start their own business is usually because they desire financial freedom meaning they would like have more disposable resources for themselves.
Answer:
Deposited amount will decrease by 1% and $2,000
Explanation:
Inflation rate will effect the value of money due to decrease in purchasing power of the currency holder.
We will use following formula to calculate the impact
Nominal rate = Real interest rate + Inflation rate
5% = Real interest rate + 6%
Real interest rate = 5% - 6% = -1%
The deposited amount will be decreased by 1%.
Deposit value = $200,000 x ( 1 - 1% ) = $198,000
Decrease in value = $200,000 - $198,000 = $2,000
Answer:
The journal entry is as follows:
Cash A/c Dr. $18,000
Equipment (Fair value) A/c Dr. $9,000
To N's capital $27,000
(To record the investment bought by Nichols)
Workings:
Cash contributed by Nichols = $18,000
Equipment's Book value = $6,300
Fair value of equipment = $9000
Nichols capital = $18,000 + $9,000
= $27,000
Answer:
$4,013.10.
$3,329.54.
Explanation:
If discount rate is 8%
PV of Cash Flows :
($830 / 1.08^1) + ($1,150 / 1.08^2) + ($1,410 / 1.08^3) + ($1,550 / 1.08^4)
$768.52 + $985.94 + $1,119.30 + $1,139.30
$4,013.10
If discount rate is 16%
PV of Cash Flows :
($830 / 1.16^1) + ($1,150 / 1.16^2) + ($1,410 / 1.16^3) + ($1,550 / 1.16^4)
$715.52 + $854.64 + $903.33 + $856.05
$3,329.54.
Answer:
a. 9,50%
b. $47.09
Explanation:
a) Discount rate on the stock
Average Risk Premium of Stock = 7.60%
Current risk-free rate = 1.60%
Discount Rate = 7.60% + 1.90%
Discount Rate = 9.50%
b) Current Price = ($41 + $2) / (1 + 9.50%)^1
Current Price = $43 / (1.0950)^1
Current Price = $43 / (1.0950)^1
Current Price = $43 / 0.91324
Current Price = $47.0851035872278
Current Price = $47.09
Note: Stock price equals the present value of cash flows for a 1-year horizon (Fv + Dividend)/(1+ Discount rate)^n
