Answer:
A
Explanation:
The formula for calculating future value:
FV = P (1 + r)^n
FV = Future value
P = Present value
R = interest rate
N = number of years
Security A : 11 = 1( 1 + r)^15
11^(1/15) = 1( 1 + r)
1.173 = 1 + r
r = 1.173 - 1
r = 17.33%
Security A : 16 = 1( 1 + r)^15
16^(1/15) = 1( 1 + r)
1.20 = 1 + r
r = 1.2 - 1
r = 0.2
r = 20%
Security B earned a higher average annual rate of return as 20% is greater than 17.33%
They can go to a well known reputable counsellor and both present their points of view and their reasoning and discuss it with the counsellor who should be able to delve into the reasoning for their moral positions and perhaps find common ground for the two positions or point out inconsistencies in the arguments of one to increase understanding of the other parties's position and arrive at a mutually beneficial result.
Answer:
PV(after-tax net return in 7th year) = 70.55 (Approx)
Explanation:
Given:
Number of year = 7
Pre-tax net returns (Fn) = $100
Growth rate = 4% = 0.04
Inflation = 3% = 0.03
Marginal tax rate = 30% = 0.3
Discount rate = 10% = 0.1
Computation:
Fn = Fo(1+g)ⁿ = 100(1.04)⁷
Fn = 131.6
Nominal net returns = 131.6(1.03)⁷
Nominal net returns = 161.85
After tax return = 161.85 (1 - 0.3)
After tax return = 113.30
After-tax, risk adjusted discount rate = 0.1(1-0.3) = 7%
PV(after-tax net return in 7th year) = 113.30
(1+0.07)⁻⁷
PV(after-tax net return in 7th year) = 70.55 (Approx)
Answer:
Production Budget
Explanation:
Production Budget is usually substituted <em>with</em> Purchasing budget for a retail company.
The operating budget usually consist of the:
- production budget,
- manufacturing overhead budget.
However, for a retail company that usually do not produce their products or inventory but purchase them, the Production Budget is usually substituted <em>with</em> Purchasing budget or merchandise inventory to be purchased; meaning since they do not have raw materials they<em> substitute </em>the number of units to be purchased, to the number of units to be produced.
