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NeTakaya
3 years ago
7

A group of concerned citizens has established a trust fund that pays 5% interest, compounded monthly, to preserve a historical b

uildingby providing annual maintenance funds of $80,000 forever. Compute the capitalized equivalent amount for these building maintenance expenses.
Business
1 answer:
Mila [183]3 years ago
6 0

Answer:

The value of the stablish fund is 1,563,663.64 dollars

Explanation:

First, we solve for the effective annual rate as this is a rate which compounds monthly:

(1+APR/m)^m-1 = r_e\\(1+0.05/12)^{12} - 1 = r_e\\r_e = 0.051161898

Now, we solve for the Principal of a perpetuity which interest over the year are 80,000:

\frac{Annuity}{Principal} = rate\\Principal = Annuity \div rate\\Principal = 80,000 \div 0.051161898

Principal = 1.563.663,64

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uppose your firm has decided to use a divisional WACC approach to analyze projects. The firm currently has four divisions, A thr
Ivenika [448]

Answer:

WACC for A: 9.05%

WACC for B: 9.50%

WACC for C: 12.20%

WACC for D: 12.65%

Explanation:

WACC for a division will be equal: Percentage of Debt in capital employed by the Division x Cost of Debt + Percentage of Equity in capital employed by the Division x Cost of equity = 50% x 6% + 50% x ( Risk free rate + Beta of each Division x Risk premium) = 3% + 50% x ( 4% + beta of each Division x Risk premium)

Risk premium for the 4 Divisions is equal to (Cost of equity for the whole firm - Risk free rate) / beta = 9%

Thus WACC for a division will be equal:  3% + 50% x ( 4% + beta of each Division x 9%).

Substitute beta of each Division from A to D provided in the question, we have: WACC for A: 9.05%; WACC for B: 9.5%; WACC for C: 12.2%; WACC for D: 12.65%.

7 0
4 years ago
Corporate social responsibility (csr) means that a corporation should:
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<span>Corporate Social Responsibility (CSR) can be described as an approach of business that contributes to continuous development of business by providing/delivering economic, environmental and social benefits to all the stakeholders of the company. CSR means that a corporation should take accountability of its actions on people, community and the environment in which it exists.</span>
6 0
3 years ago
Fred is a 45-year-old man. He has an analog television without a satellite connection. His savings are low. Therefore, he does n
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<u>Answer:</u> Option C

<u>Explanation:</u>

The customers are categorized based on their time of adoption to a new product. Innovators are the first people to try the product they are few in the market. Early adopters based on the opinion of the people move to new products in the market. Early majority is a large group of people who move on with new products seeing that is the latest product and that the product which they use may become obsolete.

Laggards are the last group of people who adopt to new products. Laggards are traditional people who would like to go by old ways. Fred is a laggard who has low income and does not wished to switch to new digital technology.

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3 years ago
The Puyer Corporation makes and sells only one product called a Deb. The company is in the process of preparing its Selling and
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Answer:

The total budgeted fixed selling and administrative expenses for February is $170,400.  The answer is D.

The calculation is as follows:

a) Advertising -  $50,100

b) Executive Salaries -$60,100

c) Depreciation - $20,100

d) Others - $40,100

Total = $170,400.

Explanation:

To obtain the above answer, we add up all the budgeted fixed selling and administrative expenses, excluding variable elements.

Fixed costs are costs which do not vary according to the level of production or activity.

Since the other elements of cost, e.g sales commision, shipping, and part of advertising are variable, these are excluded in getting the fixed selling and administrative expenses.

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4 years ago
Every time 2-year old rosa goes near the stove, her mother stops her and says, "no, hot!" rosa's mother is providing her with a
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Rosa's mother is providing her with a SCAFFOLD to help her internalize.Scaffold is an instructional method that is temporarily used to impress understanding on a young child. Children learn effectively through the process of scaffolding. 
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