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coldgirl [10]
3 years ago
12

Chris Bowie is trying to determine the amount to set aside so that he will have enough money on hand in 5 years to overhaul the

engine on his vintage used car. While there is some uncertainty about the cost of engine overhauls in 5 years, by conducting some research online, Chris has developed the following estimates.
Engine Overhaul Estimated Cash Outflow Probability Assessment
$300 10%
470 30%
740 50%
880 10%

How much รhould Chris Bowie deposit today in an account earning 6%, compounded annually, so that he will have enough money on hand in 3 years to pay for the overhaul?
Business
1 answer:
stealth61 [152]3 years ago
6 0

Answer:

$515.53

Explanation:

CALCULATION OF THE ESTIMATED CASH OUTFLOW EXPENSES FOR ENGINE OVERHAUL

Engine Overhaul                          Probability                 Estimated Cash

estimated cash outflow(X)                 (Y)                           flow ( X * Y)

$370                                             10%                                $37

$470                                             30%                               $141

$720                                             50%                               $360

<u>$760                                             10%                                $76</u>

<u>$2320                                                                                 $614</u>

Present Value Factor, PVF, of 3 years and 6% = 0.839619(from the table)

hence, value = $614 x 0.839619

                     = $515.53

Amount Deposited = $516 (approx)

<u />

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statuscvo [17]

Answer:

b.Experience-rating plan

Explanation:

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This is done by comparing the experience of an individual insured to the average insured in the same classification. Therefore, using the insured's past experience, the experience modification is determined by comparing the actual losses to expected losses.   An insured with better than average experience will produce a credit experience modification factor, while an insured with worse than average experience will produce a debit experience modification factor.  A credit experience modification factor, less than 1.00, results in a premium reduction. A debit experience modification factor, greater than 1.00, results in a premium increase. An experience modification factor of 1.00, or unity, does not change premium.

6 0
2 years ago
According to recent data, obese patients are less likely than nonobese patients to obtain preventive health services and exams,
Blizzard [7]

The statements that are true based on the obese pations are statements 1 and 2. Henvce Both the first and second statements are true.. Option 2

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6 0
1 year ago
Flounder has year-end account balances of Sales Revenue $843,779, Interest Revenue $12,160, Cost of Goods Sold $531,052, Adminis
ella [17]

Answer:

Dr Sales Revenue $843,779

Dr Interest Revenue $12,160

Cr Income Summary $855,939

Dr Income Summary $745,754

Cr Cost of Goods Sold $531,052

Cr Administrative Expenses $177,930

Cr Income Tax Expense $36,772

Dr Income Summary $110,185

Cr Retained Earnings $110,185

Dr Retained Earnings $17,793

Cr Dividends $17,793

Explanation:

Preparation for the year-end closing entries.

Dr Sales Revenue $843,779

Dr Interest Revenue $12,160

Cr Income Summary $855,939

($843,779+$12,160)

Dr Income Summary $745,754

($531,052+$177,930+$36,772)

Cr Cost of Goods Sold $531,052

Cr Administrative Expenses $177,930

Cr Income Tax Expense $36,772

Dr Income Summary $110,185

($855,939-$745,754)

Cr Retained Earnings $110,185

Dr Retained Earnings $17,793

Cr Dividends $17,793

5 0
2 years ago
Authority to conduct open market operations, which consists of buying and selling of , rests with the Committee. Reserves equal
katovenus [111]

Answer:

If the Fed conducts an open market purchase by specifically buying government securities from the Bank, banks' reserves increase and the quantity of money increases.

Explanation:

The Federal Reserve (Fed) buys and sells government securities to control the money supply. This activity is called open market operations (OPO). By buying and selling government securities in the free market, the Fed can expand or contract the amount of money in the banking system and pursue its monetary policy.

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3 years ago
Data concerning Farm Corporation's single product appear below: Selling price per unit $ 320.00 Variable expense per unit $ 76.8
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Answer:

$224,000

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Contribution margin = Selling price - Variable cost

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= $243.2

Contribution margin ratio = Contribution margin / Sales

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= $224,000

7 0
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