Answer:
$855,903.20
Explanation:
Real discounting rate=> i= [i'-f]/[1+f]. Where i is the real interest rate. i' is the nominal interest rate which is given as 5% and f is the rate of inflation
i = (5%-3%)/1+3%)
i = 2/1.3
i = 1.94%
Her after tax earnings = 45,000*(1-0.15) = $38,250
Personal consumption = 25% of this, 38,250*0.75 = $28,688.
We are discounting her earnings back 45 years at 1.94%. The equation will be: 28,688 * {1-(1+0.01940)^-45} / {0.01940}
= 28,688 * {1 - 0.42120322099] / 0.01940
= 28,688 * 29.83488551597938
= 855903.1956824165
= $855,903.20
So, the amount of life insurance necessary for Jenny using the Human Life Value method is $855,903.20
Answer:
<u>Details April May June </u>
Unit to be produced 576 630 608
Explanation:
The production budget For April, May, and June can be prepared as follows:
Ruiz Co.
Production Budget
For April, May, and June
<u>Details April May June </u>
Next month's budgeted sales (A) 640 590 680
Ratio of inventory to future sales (B) 20% 20% 20%
Budgeted ending inventory (C = A * B) 128 118 136
Budgeted unit sales for month (D) 560 640 590
Req'd units of avail. production (E = C + D) 688 758 726
Budgeted beginning inventory (F) 112 128 118
Unit to be produced (G = E - F) 576 630 608
Answer:
(a) 
(b) 
(c) X=4.975 percent
Explanation:
(a) Find the z-value that corresponds to 5.40 percent
.


Hence the net interest margin of 5.40 percent is 2.5 standard deviation above the mean.
The area to the left of 2.5 from the standard normal distribution table is 0.9938.The probability that a randomly selected U.S. bank will have a net interest margin that exceeds 5.40 percent is 1-0.9938=0.0062
(b) The z-value that corresponds to 4.40 percent is
The net interest margin of 4.40 percent is 0.5 standard deviation above the mean.
Using the normal distribution table, the area under the curve to the left of 0.5 is 0.6915
Therefore the probability that a randomly selected U.S. bank will have a net interest margin less than 4.40 percent is 0.6915
(c) The z-value that corresponds to 95% which is 1.65
We substitute the 1.65 into the formula and solve for X.




A bank that wants its net interest margin to be less than the net interest margins of 95 percent of all U.S. banks should set its net interest margin to 4.975 percent.
Answer:
Growth Rate = 5.73%
Explanation:
The present value of stock formula can be used here to solve this problem.
The formula is:

Where
is the current stock price
is the dividend to be paid next year
r is the rate of return required
g is the growth rate expected
Now, the first 3 variables are given, we need to find g. Substituting, we find our answer:

In percentage, it is
<u>Growth Rate = 5.73%</u>