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SCORPION-xisa [38]
3 years ago
15

Kathy Myers frequently purchases stocks and bonds, but she is uncertain how to determine the rate of return that she is earning.

For example, three years ago she paid $13,000 for 200 shares of Malti Company?s common stock. She received a $420 cash dividend on the stock at the end of each year for three years. At the end of three years, she sold the stock for $16,000. Kathy would like to earn a return of at least 14% on all of her investments. She is not sure whether the Malti Company stock provided a 14% return and would like some help with the necessary computations. (Ignore income taxes.)
a. Determine the net present value. (Any cash outflows should be indicated by a minus sign. Round discount factor(s) to 3 decimal places and final answers to the nearest whole dollar.)
Business
1 answer:
Andre45 [30]3 years ago
5 0

Answer:

The net present value is $1,224.886

Explanation:

The computation of the Net present value is shown below

= Present value of all yearly cash inflows after applying discount factor - initial investment

The discount factor should be computed by

= 1 ÷ (1 + rate) ^ years

where,  

rate is 14%  

Year = 0,1,2,3

Discount Factor:

For Year 1 = 1 ÷ 1.14^1 = 0.8772

For Year 2 = 1 ÷ 1.14^2 = 0.7695

For Year 3 = 1 ÷ 1.14^3 = 0.675

So, the calculation of a Present value of all yearly cash inflows are shown below

= Year 1 cash inflow × Present Factor of Year 1 + Year 2 cash inflow × Present Factor of Year 1 + Year 3 cash inflow + sale value × Present Factor of Year 1

= $420× 0.8772 + $420 × 0.7695 + $420 + $16,000 × 0.675

= $368.424 + $323.19 + $110,83.50

= $11,775.114

So, the Net present value equals to

= $13,000 - $11,775.114

= $1,224.886

We take the first four digits of the discount factor.

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The nurse educator asks a student to list the 5 main categories of complementary and alternative medicine (CAM), developed by th
kifflom [539]

Answer:

Explained below.

Explanation:

A nurse educator questions to a student, to list the 5 main categories of complementary and alternative medicine CAM, developed by the NCCAM. The statements which were made by the nursing student indicates a need for further teaching regarding CAM categories are as follows:

* Massage therapy as well as magnetic therapy are a focus of CAM.

* Massage therapy, as well as magnetic therapy, are therapies within particular categories of CAM.

7 0
3 years ago
Discuss the Sarbanes-Oxley Act 2002 and how it helps curb accounting fraud.
Soloha48 [4]

The Sarbanes-Oxley Act of 2002 was used to curb accounting fraud by improving financial disclosure of corporations, and checking and fixing frauds if they were found.

hope this helps

4 0
3 years ago
Read 2 more answers
Possession utility is most closely related to which part of the marketing mix plz help​
defon

Answer:

price

Explanation:

Possession utility is the value customers have while buying a product and they have the choice to use the product for the purpose it was made for or finding a new way to use the product.

Buying and selling of anything involves transfer of ownership from one to another. So to be successful in this throat cutting competition one should strategize to make this transfer of possession easy. So possession utility is what lets customer physically asses what they bought.

6 0
3 years ago
Your neighbor Bob has two annuities. The first annuity will pay him $10,000 per month for the next 10 years. The second annuity
german

Answer:

$1,643,344.308

Explanation:

These are Ordinary annuities because if it is not mentioned that the payments are made at the <em>beginning </em>of the year which is the case for Annuity Due.

You can use a financial calculator to find the Present value of these two ordinary annuities.

<u> PV of Annuity 1 from (yr1-yr10)</u>

Recurring payment; PMT = 10,000

Total duration ; N = 10 *12 = 120 months

Monthly interest rate in this case ; I/Y = 6%/12 = 0.50%

Future value ; FV = 0 (use 0 if annuity variable is not given )

then CPT PV= $900,734.533

<u>PV of Annuity 1 from (yr11-yr20)</u>

This will happen in 2 steps sice it is a forward-starting annuity;

Recurring payment; PMT = 15,000

Total duration ; N = 10 *12 = 120 months

Monthly interest rate in this case ; I/Y = 6%/12 = 0.50%

Future value ; FV = 0 (use 0 if annuity variable is not given )

then CPT PV( at t=10)= $1,351,101.80

Next find the PV of $1,351,101.80  at t=0;

$1,351,101.80 /(1.005^120) = $742,609.7754

Next, find the sum of these two PVs to find the answer;

=$900,734.533 + $742,609.7754

PV = $1,643,344.308

6 0
3 years ago
In a recent annual report, Apple Computer reported the following in one of its disclosure notes: "Warranty Expense: The Company
Bezzdna [24]

Answer: The matching principle

       

Explanation: Matching principle is a combination of accrual accounting and revenue recognition. It states that the expenses of a company must be recorded at the same accounting period in which they were incurred to earn such revenues.

In the given case, Apple is reporting the warranty expenses at the same time period in which the revenue from such expenses is recognized.

Hence we can conclude that the given case illustrates the matching principle.

6 0
3 years ago
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