1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
svet-max [94.6K]
3 years ago
15

Fidelity Mutual (an insurance company) has offered you a single premium annuity that will pay you $12,000 at the end of each yea

r for the next 15 years. If you must pay $109,296 today for this annuity, what is your expected rate of return?
Business
1 answer:
Travka [436]3 years ago
8 0
Given:
Initial Investment = 109,296
annual return = 12,000 for 15 years.

Usually the expected rate of return uses rates in percentage form. ERR is calculated by taking the average of the probability distribution of all possible <span>returns.
</span>However, based on the given figures, I think the best formula for this would be the accounting rate of return.

ARR = Average Accounting Profit / Average Investment
ARR = 12,000 / 109,296
ARR = 0.10979 
ARR = 0.10979 100% = 10.979 or 10.98%

The expected rate of return is 10.98%


You might be interested in
Fine Lines Inc. is a notebook manufacturing company based in Ohio. Fine Lines' main market is Ohio. It aims at providing its pro
likoan [24]

Answer:

a.mechanistic

Explanation:

Based on the scenario being described within the question it can be said that it seems that Fine Lines Inc. is using a mechanistic structure. This type of structure, also known as a bureaucratic structure, is a structure based on a single formal and centralized network where authority comes from the top-level managers who make most of the decisions.

8 0
3 years ago
Read 2 more answers
Fiscal policy is defined as changes in federal ________ and ________ to achieve macroeconomic objectives such as price stability
wariber [46]

Answer:

expenditures and taxes

Explanation:

Fiscal policy refers to a government action to adjust taxes and expenditures to influence economic growth. Taxes are the main sources of income for the government. A rise in taxes increases revenue to the government but lower individual disposable income. High taxes discourage investments and business expansion.

Government expenditure in infrastructure and other projects creates employment and incomes in the economy. Reduced spending by the government may result in a lower aggregate demand. The government uses fiscal policies together with monetary policies to achieve its economic goals.

5 0
2 years ago
The ledger of American Company has the following work in process account. Work in Process—Painting 5/1 Balance 3,690 5/31 Transf
liubo4ka [24]

Answer:

How many units are in process at May 31?

physical units ending WIP:            740

equivalent units WIP materials:    740

equivalent units WIP conversion: 296

Explanation:

We will add the beginning and started units, then subtract the trasnaferrd out to get the ending WIP inventory.

physical units:

beginning             490

started                1,650

transferred-out<u> (1,400) </u>

ending                  740

Now we will multiply by the percentage of completion to get the equivlent units of WIP on each category:

<u>equivalent units for ending WIP:</u>

materials    740 x 100% = 740

conversion 740 x 40% = 296

4 0
3 years ago
After graduation in 2 years, Antwone would like to take a much needed vacation to the Caribbean Islands. He anticipates that the
Arisa [49]

Answer: $3,580.30 (converted to 2decimal places).

Antwone need to deposit " $3,580.30008” into the account each semi-annual period in order to take his vacation in 2 years

Explanation:

By using compound interest formula below to solve the question

A = p ( 1 + r/n)^nt

A = amount (future value)= $3,800

P = principal (present value) ?

r = annual nominal rate = 3%= 0.03

n = today number of compounding years = semiannually (2 interest payments period in a year) = 2

t = time in years =2

3,800 = p ( 1 + 0.03/2)^2(2)

3,800 = p ( 1 + 0.015 )^4

3,800 = p ( 1.015 ) ^4

3,800 = 1.06136355 p

divide both sides by 1.06136355

p = 3,800 / 1.06136355

p = $3,580.30008

≈$3,580.30 ( rounded off to 2d.p)

3 0
2 years ago
Allowance for Doubtful Accounts has a credit balance of $500 at the end of the year (before adjustment), and bad debt expense is
andrew11 [14]

Answer:

The correct answer is c) $9,000

Explanation:

If net credit sales are $300,000 and bad debt expense is estimated at 3% of net credit sales.

$300,000 x 3%= $9,000

or

$300,000 x 0.03= $9,000

The amount of the adjusting entry to record the estimated uncollectible accounts receivables is $9,000

7 0
3 years ago
Other questions:
  • Each Cutco knife goes through 30 steps to ensure that it meets the firm's standards and provides a good value for a premium prod
    9·1 answer
  • Managerial accounting is an activity that helps managers determine costs of products and services, plan future activities, and c
    7·1 answer
  • Xion Co. budgets a selling price of $81 per unit, variable costs of $35 per unit, and total fixed costs of $281,000. During June
    10·1 answer
  • Wilbur decides to sell his collection of rare stamps through an online auction site. When he is filling out the information abou
    15·1 answer
  • A deadweight loss is a consequence of a tax on a good because the tax
    12·1 answer
  • Atlantis Corporation has​ 12,000 shares of​ 14%, $78 par noncumulative preferred stock outstanding and​ 29,000 shares of​ no-par
    15·1 answer
  • Successful firms of today would ?
    10·1 answer
  • Which margin is at the very bottom of the page when printing worksheets?
    8·2 answers
  • The price of a gallon of gasoline in bonland is? $3.20. however, just before the? election, the government decides to fix the pr
    6·1 answer
  • The Conner Company uses a two-step process for making wooden boards with holes in them. Step 1 is drilling and Step 2 is sanding
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!