Which of the following management styles is generally best used in a crisis situation?

Mary and John, a young couple, come to you asking for financial advice. They recently graduated and have found entry-level posit

dolphi86 [110]

a) The lump-sum investment means that the young couple, Mary and John, will invest the total sum of $54,000 (18 x $3,000) at the beginning of the investment period, which yields a future value worth $154,134.31 at the end of the 18-year investment period,

On the other hand, the annuity investment of $3,000 implies that Mary and John will invest $3,000 annually, which yields a future value worth $98,279.98 at the end of the 18-year investment period.

b) The advantage of the lump-sum investment strategy over the annuity investment lies in the total interest generated, which is also compounded over the years.

Interest compounding means that Mary and John would be earning interest on interest.

The disadvantage of the lump-sum strategy, which becomes the advantage of the annuity investment, is that Mary and John may not afford the lump-sum at the beginning of the investment.

c) Since Mary and John could only afford to invest $3,000 annually, they should go ahead with the annuity investment.

The recommendation of the investment strategy is based on the financial status of Mary and John at the beginning of the investment because they are:

Financially literate
Moderate risk-takers.

<h3>What is future value?</h3>

The future value of an investment is the value of the cash flows in a future period. The future values of each investment strategy can be determined using the following future value formula:

FV = PV (1+r)^{n}

FV = future value

PV = present value

r = annual interest rate

{n} = number of periods interest held

Alternatively, it can be computed using an online finance calculator as follows:

Data and Calculations:

Lump-sum investment:

N (# of periods) = 18 years

I/Y (Interest per year) = 6%

PV (Present Value) = $54,000

PMT (Periodic Payment) = $0

Results:

FV = $154,134.31

Total Interest = $100,134.31

Annuity Investment:

N (# of periods) = 18 years

I/Y (Interest per year) = 6%

PV (Present Value) = $0

PMT (Periodic Payment) = $3,000

Results:

FV = $98,279.98

Sum of all periodic payments = $54,000 (18 x $3,000)

Total Interest = $44,279.98

Learn more about lump-sum and annuity investments at brainly.com/question/16522689

4 0

3 years ago

In the MBTI, which dimension relates to the manner in which you gather information?

lesya [120]

Answer:

In MBTI, the Sensation/Intuition relates to how we gather information.

Explanation:

MBTI stands for Myers-Briggs Type Indicator. MBIT use to increase the productivity of a person.

MBTI supporters see the testing system as a valuable help for personal growth and development.

Sensation/intuition A physical sensation or perception resulting from something that comes into contact with the body or happens to it.

some people feel uncomfortable with the touch of others.

4 0

3 years ago

List four characteristics of the accumulated goods that make up economic wealth

dsp73

The four characteristics are:
Utility, which means that the accumulated goods must be able to fulfill the needs of a certaion costumer
tangibility, The goods could be measured in some way
scarcity, The goods need to be gotten by doing a certain sacrifice
Transferab, the goods's ownership could move from one person to the other

3 0

3 years ago

What is paid first before the balance on a credit card?

AysviL [449]

Interest has to be paid...

7 0

3 years ago

Roan Paper Co. produces the paper used by wallpaper manufacturers.

son4ous [18]

Answer:

Roan Paper Co.

Mixing Department

Production Cost Report for March:

Direct Direct Manufacturing Total Costs

Materials Labor O/h Allocated

Beginning inventory $350 $245 $200 $795

Costs added during

March 4,940 3,000 3,225 11,165

Total costs $5,290 $3,245 $3,425 $11,960

less Ending inventory $115 $71 $74 $260

Cost of production $5,175 $3,174 $3,351 $11,700

2. General Journal:

Date Description Debit Credit

March

Cost of production $11,700

Direct Materials $5,175

Direct Labor $3,174

Manufacturing overhead $3,351

To record the cost of production for march.

Direct Materials costs $5,175

Direct Labor costs $3,174

Manufacturing overhead $3,351

Cash Account $8,526

Wages Payable $3,174

To record costs of materials, labor and overhead.

Explanation:

a) Data and Calculations for March:

Direct Direct Manufacturing Total Costs

Materials Labor O/h Allocated

Beginning inventory $350 $245 $200 $795

Costs added during

March 4,940 3,000 3,225 11,165

Total costs $5,290 $3,245 $3,425 $11,960

Total units = 5,000 ( Beginning = 300, March started = 4,200 and Ending = 500 units)

Beginning inventory of 300 and started and completed, 4,200 were 100% complete = 4,500

Ending inventory of 500 were 20% complete = 100 units.

b) Calculation of Equivalent units:

Direct Direct Manufacturing Total Costs

Materials Labor O/h Allocated

Units completed 4,600 4,600 4,600 4,600

Ending inventory 100 100 100 100

Production for March 4,500 4,500 4,500 4,500

Unit cost per

equivalent unit $1.15 $0.71 $0.74 $2.60

Cost of Ending WIP $115 $71 $74 $260

Cost of production $5,175 $3,174 $3,351 $11,700

b) Equivalent units are the units under production multiplied by their percentage of completion. Usually, completed units have 100% completion, while work in process do not have 100% completion with respect to conversion costs, especially. The purpose of calculating equivalent units is to determine accurate costs of units completed.

c) The weighted-average method in allocating production costs means that the beginning inventory, units started and completed in the period, and the equivalent units of ending inventory are added. Then the costs of materials, labor, and overhead are allocated based on the average costs.

8 0

3 years ago