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Vera_Pavlovna [14]
3 years ago
9

Lynda Jones College Plan On her 10th birthday Linda Jone's parents decide to deposit $4,000 in a 529 account for their daughter

to go to college. They intend to put an additional $4,000 in the account each year on her 11th, 12th, ..., 17yh birthdays. Assume all account balances will earn 8% per year. On Lynda's 18th, 19th, 20th, and 21st birthdays, her parents will withdraw $20,000 to pay for Linda's college education. Questions: Is the $4,000 savings per year sufficient to cover the anticipated college expenses? Is Linda's 529 account underfunded? What should be the annual deposit in Lynda's 529 account to cover entirely her tuition and fees? What will be the PV of Lynda's college tuition on her 18th birthday? Summarize the results of your analysis and provide your recommendation in this quizz. Create a spreadsheet and submit it in you Drop Box.
Business
1 answer:
dimulka [17.4K]3 years ago
6 0

Answer:

Is the $4,000 savings per year sufficient to cover the anticipated college expenses?

  • No, since the maximum withdrawal per year (for 4 years) earning an 8% interest rate is $12,846.23. Her parents will be $7,153.77 short every year.

Is Linda's 529 account underfunded?

  • Yes, her account will have $42,548 when she turns 18 and that isn't enough to cover her college expenses.

What should be the annual deposit in Lynda's 529 account to cover entirely her tuition and fees?

  • $6,227.51

What will be the PV of Lynda's college tuition on her 18th birthday?

  • If Lynda's parents want to cover her college expenses, they need to have $66,242 on her 529 account.

Explanation:

Lynda's 529 account will have the following balance when she is 18:

future value = annual payment x annuity factor (FV annuity factor, 8%, 8 periods) = $4,000 x 10.637 = $42,548

her parents will make 4 withdrawals:

present value = annual withdrawal x annuity factor (PV annuity factor, 8%, 4 periods)

maximum annual withdrawal = $42,548 / 3.3121 = $12,846.23

required balance = $20,000 x 3.3121 = $66,242

annual payment = $66,242 / 10.637 = $6,227.51

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The answer to this question is Upward.

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CSIRT is at lower level then the organizational and IT/infoSec management in the hierarchical structure.

So if the CSIRT sends some information to organizational and IT/infoSec the flow should be considered as upward flow.

Hence we that the answer to this question is upward.

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Everything else equal, an asset's value is:
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The correct option is A, an asset's value is inversely related to the rate of return investors require to purchase it

Explanation:

The asset value is the initial purchase price determined by discounting the future cash flows from the asset to present values using a the required rate of return.

Ultimately, the higher the required return, the lower the present value of the investment whose price is being determined and the lower the discount the rate of return used in discounting relevant cash flows to present values the higher the present values.

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Fill in the missing amounts.
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Let understand that the organized table are intended to calculate missing numbers on Income Statement for the two companies are drawn below.

  • Here, we are calculating missing columns for Monty Corp. and Whispering Winds Corp.

  • Also understand that the bold numbers are the columns calculated according to the question.

Particulars                             Monty Corp.    Whispering Winds Corp.

Sales revenue                         $90,000                $111,000

Sales return and allowance   <u>$6,000</u><u>  </u>                 <u>$5,000</u>

Net sales                                 $84,000                 $106,000

Cost of goods sold                 <u>$53,760 </u>                <u>$65,720</u><u>   </u>

Gross profit                             $30,240                 $40,280

Operating expenses               <u>$15,120 </u>                 <u>$19,080 </u>

Net income                              <u>$15,120</u><u> </u>                 <u>$21,200</u>

In conclusion, the formulae used to derived the bolded answers are:

  • Sales revenue - Net sales = Sales returns and allowance
  • Net sales - Cost of goods sold = Gross profit
  • Gross profit - Operating expenses = Net income
  • Net sales + Sales return and allowance = Sales revenue
  • Net sales - Gross profit = Cost of goods sold
  • Gross profit - Net income = Operating expenses

See similar solution here

<em>brainly.com/question/15062414</em>

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Purchasing power parity is most popularly known as the PPP. It may be defined as the measure of the prices of the various countries which makes use of the price of some specific goods in order to compare the absolute purchasing capability or power for the countries' currencies.

It is used to measure and compare prices at different locations.

The purchasing power does not hold good in the short to the medium run as different countries produces different goods and as such all the goods are not internally traded all over the locations or countries.

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