Answer: It is NOT a good investment.
Explanation:
Your bank account pays an interest of 9% per annum. This can be used as a discount rate to discount the dividends and the final Sales price to the present to see if the present value of Future benefits is more than what the stock is valued at now.
If the Present Value of the future benefits is higher than the cost now, XYZ is a good investment.
$4 are expected every year for 3 years and then on the third year, the stock will be sold for $100.
Discounting therefore gives us,
= (4 / (1 + 9%) ) + (4 / (1 + 9%)^2) + ( 4 / ( 1 + 9%) ^ 3) + ( 100 / ( 1 + 9%) ^ 3)
= 87.34
= $87.34
The Present Value of the future benefits including the future sales price is $87.34 which is less than the current cost of the stock at $90.
XYZ is NOT a good investment.
Answer:
Discretionary income
Explanation:
Discretionary income is what is left of a person's income for spending, investing, or saving after paying taxes and necessities.
Answer:
Journal Entry
Debit Pension Expense $111,691 Credit Bank $111,691
Explanation:
Computation of Pension expense
Service cost $88,500
Service cost amortization $10,600
Return on Plan asset - $63,100
Interest on liability $75,691
(688,100*11%)
Pension Expense $111,691
Answer:
a. Define the basic business functions that you need the software to be able to perform.
Explanation:
The main function of a business needs to be determined so that business strategy can be formulated. The office manager has made an agreement to spend up to $1000 on the new software. It is now required to determine the basic functions which are needed in the new software for business functioning.
Answer:
Human resources.
Explanation:
Human resources. are the employees who work for a business
