As a financial planner, you offer unbiased advice to your clients. Which principle of ethics are you complying with?

You are saving for retirement. To live comfortably, you decide you will need to save $ 4 million by the time you are 65. Today

olasank [31]

Answer: $50,846.3701

Explanation:

Need to save $4 million to live comfortably,

Interest rate, r = 3%

N = 40 years

$Present\ value=\frac{FV_{N} }{(1+i)^{N}}$

$Present\ value=\frac{4,000,000 }{(1+0.03)^{40}}$

$Present\ value=\frac{4,000,000 }{3.262}$

= 1,226,241.57

$Present\ value\ of\ annuity= C\times\frac{1}{i}\times(1-\frac{1}{(1+i)^{N}}) + C$

$1,226,241.57= C\times\frac{1}{0.03}\times(1-\frac{1}{(1.03)^{40}})+C$

$1,226,241.57=C[\frac{1}{0.03}\times(1-0.3065)+1]$

$1,226,241.57=24.1166\times C$

$C=\frac{1,226,241.57}{24.1166}$

= $50,846.3701

Hence, $50,846.3701 will be the annual payment to have $4 million in the account on 65th birthday.

7 0

2 years ago

Partner A has a smaller capital balance than Partner L. Partner A, however, has a higher profit-and-loss-sharing percentage than

mixer [17]

Answer:

(C) Partner A will have a smaller loss absorption potential than L

6 0

2 years ago

Chiquita produces bananas for an average explicit cost of $0.25 per banana and sells 1 million bananas per week for a price of $

Sergio039 [100]

Answer:

Option (A) is correct.

Explanation:

Given that,

Implicit costs per week = $200,000

Average explicit cost per banana = $0.25 per banana

Per week bananas sold = 1 million

Explicit cost = Average explicit cost per banana × No. of banana sold

= $0.25 × 1,000,000

= $250,000

Total revenue = No. of banana sold × Selling price of each banana

= 1,000,000 × $0.50

= $500,000

Accounting profit = Total revenue - Explicit cost

= $500,000 - $250,000

= $250,000

Economic profit:

= Total revenue - Explicit cost - Implicit costs

= $500,000 - $250,000 - $200,000

= $50,000

5 0

2 years ago

Bob makes his first $ 800 deposit into an IRA earning 7.4 % compounded annually on his 24th birthday and his last $ 800 deposit

Likurg_2 [28]

Answer:The answer is $17,387.67

Explanation:

Let Principal = P, Rate = R% per annum, Time = n years

Amount = P ( 1 + R/100)∧n

P = $800, R = 7.4%, n = 24

A = 800 ( 1 + 7.4/100)∧24

A = 800 ( 1 + 0.074)∧24

A = 800 ( 1 .074)∧24

A = 800 (5.547569512)

A = 800× 5.5475569512

A = $4,438.05

Deposit made at 39th birthday

P = $800, R = 7.4%, n = 39

A = 800 ( 1 + 7.4/100)∧39

A = 800 (1 + 0.074)∧39

A = 800 (1.074)∧39

A = 800 (16.187022604)

A = 800× 16.187022604

A = $12,949.62

How much is in the IRA when Bob retires will be

$4,438.05 + 12,949.62

= $17,387.67

6 0

2 years ago

On July 1, 20X1, James and Short formed a partnership. James contributed cash. Short, previously a sole proprietor, contributed

Brrunno [24]

Answer:

James and Short LLC

Short's capital account on July 1, 20X1 should be recorded at the fair value of contributed property minus the mortgage liability, which the partnership assumed.

Explanation:

The fair value of contributed property is the current market value of the contributed property by Short. It is the market value that will determine how the contributed property can be valued. The market value assumes that the contributed property is being sold in pieces and not as a whole. This is why the value is considered a fair basis for recognizing the capital contribution of Short into the partnership.

3 0

2 years ago