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Mumz [18]
3 years ago
11

In 2000 Amelia was being paid $7,200 per week. The CPI was 0.418 in 2000. In 2020 Amelia found a job paying $35,000 per week. Th

e CPI is 2.40 in 2020. Amelia’s job in 2000 paid ________ in nominal terms and ________ in real terms than her 2020 job.
Business
1 answer:
AleksAgata [21]3 years ago
7 0

Answer:

Explanation:

Real wage is defined as the nominal wage divided by the general price level, CPI. It is also the purchasing power of nominal wage.

Nominal wages are the wages received by a worker in the form of money.

Given:

In 2000:

Amelia nominal salary = $7,200 per week. CPI = 0.418

In 2020:

Amelia nominal salary = $35,000 per week

CPI = 2.40

Where CPI is an inflation measure.

Real salary = salary /(1 + inflation rate)

Inflation rate = (CPI2 - CPI1)/CPI1 × 100

Real salary I = salary/CPI

Real salary in 2000 = 7200/0.418

= $17224.88 per week

Real salary in 2020 = 35000/4.74

= $7384 per week

Nominal salary in 2000 compared to that in 2020,

Finding the difference = $7200 - $35000

= -$27800 per week

Real salary in 2000 compared to that in 2020,

Finding the difference = $17224.9 - $7384

= $9840.9 per week

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aliya0001 [1]

Answer:

Years to maturity       Price of Bond C            Price of Bond Z

         4                               $1,084.42                       $711.03

         3                               $1,065.93                       $774.31

         2                               $1,045.80                      $843.23

         1                                $1,023.88                       $918.27

Explanation:

Note: See the attached excel for the calculations of the prices of Bond C and Bond Z.

The price of each bond of the bond can be calculated using the following excel function:

Bond price = -PV(rate, NPER, PMT, FV) ........... (1)

Where;

rate = Yield to maturity of each of the bonds

NPER = Years to maturity

PMT = Payment = Coupon rate * Face value

FV = Face value

Substituting all the relevant values into equation (1) for each of the Years to Maturity and inputting them into relevant cells in the attached excel sheet, we have:

Years to maturity       Price of Bond C            Price of Bond Z

         4                               $1,084.42                       $711.03

         3                               $1,065.93                       $774.31

         2                               $1,045.80                      $843.23

         1                                $1,023.88                       $918.27

Download xlsx
4 0
2 years ago
Terri davis is planning to buy a new car. While on the internet she learned that the car has a base price of $16,007, options th
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I’m pretty sure that the answer is 17,621.66
5 0
3 years ago
Cost of Debt KatyDid Clothes has a $150 million (face value) 30-year bond issue selling for 104 percent of par that carries a co
Ivahew [28]

Answer:

the annual pre-tax cost of debt is 10.56%

Explanation:

the beore-tax component cost of debt will be the actual market rate of the bonds, as they offer an interest rate of 11% but are selling at 104 points not at par thus, there is a difference between the rates.

We solve for the rate which makes the coupon and maturity 104

with excel or a financial calculator

PV of the coupon payment

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

C 5.500 (100 x 11%/2)

time 60 (30 years x 2 payment per year)

rate <em>0.052787474</em>

5.5 \times \frac{1-(1+0.0527874736258532)^{-60} }{0.0527874736258532} = PV\\

PV $99.4338

PV of the maturity

\frac{Maturity}{(1 + rate)^{time} } = PV  

Maturity   100.00

time   60.00

rate  <em>0.052787474</em>

\frac{100}{(1 + 0.0527874736258532)^{60} } = PV  

PV   4.57

<em><u>Adding both we should get 104 which is the amount the bonds is selling:</u></em>

PV coupon $99.4338 + PV maturity  $4.5662 = $104.0000

The rate is generated using goal seek or wiht a financial calculator.

This rate is a semiannual rate, so we multiply by 2 to get the annual cost of debt:

0.052787474 x 2 = 0.105574947

The cost of debt for the firm is 10.56%

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2 years ago
What effect will each of the following have on the demand for small automobiles such as the Mini-Cooper and Fiat 500?
icang [17]

Answer:

a. Demand will increase.

b. Demand will increase.

c. Demand will increase.  

d. Demand will decline.

e. Demand will increase.

Explanation:

a. If small automobiles become more fashionable, people will prefer them more. This will lead to an increase in demand for autos.  

b. If there is an increase in the price of large automobiles and the price of the small automobiles remain the same, people will prefer the cheaper substitutes. This will cause the demand for small automobiles to increase.  

c. Inferior goods have a negative income effect. SO, when income declines the demand for small autos will increase and vice versa.  

d. If consumers expect the price of small autos to fall in the near future, they will hold their money to buy autos when their price fall. This will cause the current demand to fall.  

e. When the price of gasoline drops it will become cheaper to use autos. This will lead to an increase in demand for autos.

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2 years ago
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Assessments of the currency of diversity plan
FinnZ [79.3K]

An equality and diversity policy is basically a written agreement for your organization on how you will avoid discrimination and provide a safe and inclusive environment for your members and service users.

<h3>What is meant by currency of a plan?</h3>

The currency in which the Policy is denominated, as described in the Policy Schedule, is referred to as the Policy Currency.

The assessment of the currency of diversity plan or policy therefore, is the process of ensuring that a diversity policy or plan is up to date.

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1 year ago
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