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Trava [24]
3 years ago
5

2. You retire at age 60 and expect to live another 23 years. On the day you retire, you have $568,900 in your retirement savings

account. You are conservative and expect to earn 5.2% on your money during your retirement. How much can you withdraw from your retirement savings each month if you plan to die on the day you spend your last penny? i. (15 pts) Write down the discounted cash flow equation. ii. (10 pts) Solve the equation to find the monthly withdrawal amount.
Business
1 answer:
hichkok12 [17]3 years ago
5 0

Answer:

The monthly withdrawals are $3,537.85 and will last for 23 years.

Explanation:

We have to calculate the monthly installment of an annuity:

PV \div \frac{1-(1+r)^{-time} }{rate} = C\\

PV 568,900.00

time 276 (23 years x 12 months)

rate 0.004333333 (5.2% = 5.2 / 100 = 0.052 per year we now divide by the 12 months of a year and get the rate for monthly withdrawals.

568900 \div \frac{1-(1+0.00433)^{-276} }{0.00433} = C\\

C  $ 3,537.85

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ra1l [238]

Answer:

D. It has broadened the marketing efforts to include a wider customer base which could improve sales.

Explanation:

The most suitable alternative for this issue is the letter D, Broadened marketing efforts to include a larger customer base, which could improve sales.

This is because when developing an advertising campaign focused on raising awareness of diversity, the company reaches new customers through inclusion and representativeness, especially when it comes to the black public, which is still often overlooked by advertising campaigns.

It is also important to emphasize the importance of an organization presenting a multicultural base of employees, because through it and the employees' personal experience it was possible to identify problems that helped the company to achieve such benefits.

3 0
3 years ago
Regarding the trade-off theory, a firm would reach its optimal capital structure if:
netineya [11]

Answer:

The Correct Answer is C.

the trade-off theory posits that a firm would reach it's optimal capital structure if the tax savings from additional borrowing results in lower financial distress costs.  

Explanation:

The combination of debt and equity used by a company to finance its operations and growth is referred to as it's <em>capital structure</em>. Debt comes in the form of bond issues or loans, while equity may come in the form of common stock, preferred stock, or retained earnings.

A company capital structure is affected by cost of capital. The higher the cost of borrowing the less the present value of the firm’s future cash flows, discounted by the Weighted Average Cost of Capital (WACC) and vice versa.

The weighted average cost of capital (WACC) is arrived at by calculating a firm's cost of capital in which each category of capital and proportionately weighing them. Categories of capital include including common stock, preferred stock, bonds, and any other long-term debt, are included in a WACC calculation.

Thus, the primary objective of the office of the finance manager should be to find the optimal capital structure that will result in the lowest WACC and the maximum value of the company (shareholder wealth).

Why?

The <em><u>optimal capital structure</u></em> is estimated by calculating the mix of debt and equity that minimizes the weighted average cost of capital (WACC) of a company while maximizing its market value.

Thus when additional borrowing results in lower financial distress costs, the firm achieves the potential to reach it's Optimal Capital Structure.

Cheers!

     

3 0
4 years ago
Read 2 more answers
In the declaration of independence the colonists complained that the king imposed taxes without ther consent/approval. In the un
Leokris [45]

Answer:

The branch of the US government that has the power to "lay and collect taxes" is:

the Congress, according to Article I, Section 8.

Explanation:

The Congress is made up of the people's elected representatives.  As such, people's consent and approval are always sought and given through the Congress for the laying and collection of taxes.  The IRS is a creation of Congress.  Congress empowers it to collect taxes.  Even when the Executive branch proposes tax changes, they are subject to the approval of the Congress.

4 0
3 years ago
While working at a busy law firm, Bruce is using Skype to meet with a client in another state. Although Bruce is trying to conce
Neporo4naja [7]

Answer:

Information overload

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6 0
3 years ago
When using the periodic system the physical inventory count is used to determine Select one: a. both the cost of the goods sold
AlexFokin [52]

Answer:

a. both the cost of the goods sold and the cost of ending inventory.

Explanation:

The physical count is used in the periodic inventory system to calculate the amount of ending inventory. However the cost of goods sold can be derived from using the ending inventory count. Suppose we have ending inventory of 100 units and Purchases were 500 units  Also there were no beginning inventory units so the Cost of goods Sold can be calculated as

Cost of Goods Sold= Beginning Inventory Add Purchases Less Ending Inventory

Cost of Goods Sold=  0 + 500- 100= 400

8 0
3 years ago
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