Answer:
The man will made 15 drawins for 31,468 at their retirement age.
Explanation:
We solve for the future value of the annuity-due (deposits at the beginning)
C 1,000.00
time 25
rate 0.04
FV $375.1168
Now, we calcualte the amount of the withdrawals considering the new rate:


C $ 31.468
Answer:
False
Explanation:
Most interest rates in the economy are not set by federal reserve. For example, banks decide what interests to pay different kind of deposits and charge loans of different risks on their own (with consideration for competition and profitability).
What the Fed does is set important rates (discount rate and funds rate) that influence other interest rates in the economy.
Answer:
The answer is 7.65%
Explanation:
The cost of capital is equal to the cost of debt in this example as it involves a debt instrument. The formula for the cost of debt is as follows:
(Interest Expense x (1 – Tax Rate) ÷ (Amount of Debt – Debt Acquisition Fees + Premium on Debt – Discount on Debt)
In the example, the given values are the following:
Interest Expense = 7% x $1,000 = $70 (no tax rate was provided)
Amount of debt = $1,000 (face value of the bond)
Debt acquisition fee = $15
Discount on debt = $70 ($1,000 face value vs. the $930 proceeds of the bond, the bond was issued at a discount)
Solution:
$70 ÷ ($1,000 - $15 - $70) = 7.65% cost of capital (cost of debt)
Answer:
The total fixed costs must be:
$36,000.
Explanation:
a) Data and Calculations:
Contribution margin ratio for the new product = 0.2
Target operating income = $60,000
Targeted sales volume in dollars = $480,000
Fixed costs = targeted sales volume in dollars multiplied by contribution margin ratio, minus target operating income
Fixed costs = ($480,000 * 0.2) - $60,000 = $36,000
b) The focus should be on the break-even formula for dollar sales with a target profit. When the formula is reversed, the fixed costs can be calculated as shown above.
Answer:
$5,000= ending inventory
Explanation:
Giving the following information:
Gross margin is normally 40% of sales.
Sales= $25,000
beginning inventory= $2,500
purchases= $17,500
First, we need to determine the cost of goods sold:
COGS= 25,000*0.6= 15,000
Now, using the following formula, we can calculate the ending inventory:
COGS= beginning inventory + cost of goods purchased - ending inventory
15,000= 2,500 + 17,500 - ending inventory
5,000= ending inventory