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Pie
3 years ago
11

A medical student will complete her residency and go into medical practice in 4 years. She needs to purchase expensive medical e

quipment to start the practice. In order to determine the amount of money that must be invested today to meet this capital need, all of the following are needed except:___________.1. Current cost of medical equipment2. Assumed rate of return3. Expected inflation rate
Business
1 answer:
OverLord2011 [107]3 years ago
6 0

Answer:

3. Expected inflation rate

Explanation:

To determine the amount of money that the medical student must invest today to meet this capital need, she needs to know the current cost of medical equipment to have the the amount she needs to be able to buy the equipment. Also, she has to know the assumed rate of return to determine the amount of interest she will receive as the formula to calculate the money she needs today is:

PV= FV/(1+r)^n, where:

PV= present value

FV= future value

r= rate of return

n= number of periods of time

According to this, the answer is that the option that she doesn't need to find the amount of money that must be invested today to meet this capital need is the expected inflation rate as the formula to calculate the present value considers the amount she will need, the rate of return and the period of time.

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Suppose a tire manufacturer wants to set a mileage guarantee on its new XB 70 tire. Tests revealed that the tire's mileage is no
kogti [31]

Answer:

The manufacturer should announce a guaranteed mileage of 44528 miles

Explanation:

Problems of normally distributed samples are solved using the z-score formula.

In a set with mean \mu and standard deviation \sigma, the zscore of a measure X is given by:

Z = \frac{X - \mu}{\sigma}

The Z-score measures how many standard deviations the measure is from the mean. After finding the Z-score, we look at the z-score table and find the p-value associated with this z-score. This p-value is the probability that the value of the measure is smaller than X, that is, the percentile of X. Subtracting 1 by the pvalue, we get the probability that the value of the measure is greater than X.

In this problem, we have that:

\mu = 47900, \sigma = 2050

What guaranteed mileage should the manufacturer announce

Only until the 5th percentile will have to be replaced, which is the value of X when Z has a pvalue of 0.05. So it is X when Z = -1.645.

Z = \frac{X - \mu}{\sigma}

-1.645 = \frac{X - 47900}{2050}

X - 47900 = -1.645*2050

X = 44528

The manufacturer should announce a guaranteed mileage of 44528 miles

6 0
3 years ago
Read 2 more answers
Laura says that the present value of $700 to be received one year from today if the interest rate is 6 percent is less than the
Andrews [41]

Answer:

The correct answer is A. Both Laura and Cassie are correct.

Explanation:

Since Laura says that the present value of $ 700 to be received one year from today if the interest rate is 6 percent is less than the present value of $ 700 to be received two years from today if the interest rate is 3 percent, and Cassie says that $ 700 saved for one year at 6 percent interest has a smaller future value than $ 700 saved for two years at 3 percent interest, to determine who is right, the following calculations must be performed:

700 x 1.06 = 742

700 x 1.03 ^ 2 = 742.63

Therefore, both Laura and Cassie are correct in their claims.

5 0
2 years ago
On May 15, 2000 you enter into a 1-year forward rate agreement (FRA) with a bank for the period starting November 15, 2000 to Ma
Artyom0805 [142]

Answer:

a.

3.51%

b.

0%

Explanation:

a.

First, we need to calculate the YTM of 6 months zero-coupon bond by using the following formula

Price = Face value / ( 1 + YTM )^numbers of years

96.79 = 100 / ( 1 + YTM )^1

1 + YTM = 100 / 96.79

1 + YTM = 1.0331646

Now calculate the YTM of 1 Year zero-coupon bond

93.51 = 100 / ( 1 + YTM )^1

YTM = 1.0331646 - 1

YTM = 0.0331646

YTM = 3.31646%

YTM = 3.316%

1 + YTM = 100 / 93.51

1 + YTM = 1.06940

YTM = 1.06940 - 1

YTM = 0.06940

YTM = 6.940%

YTM = 6.94%

Hence the forward rate is calculated as follow

Forward rate = [ (1 + YTM of 1 year zero coupon bond ) / ( 1 + YTM of 6 months year zero coupon bond ) ] - 1 = ( 1 + 6.94% ) / ( 1 + 3.316% ) = [ 1.0694 / 1.03316 ] - 1 = 1.03508 - 1 = 0.03508 = 3.508% = 3.51%

b.

At the time of inception the formward rate is 0.

7 0
2 years ago
Wang Company began operations on January 1, 2018, by issuing common stock for $70,000 cash. During 2018, Wang received $88,000 c
posledela

Answer:

Wang Company

Statement of financial position

Equity and liabilities

Issued share capital  $70,000

Retained earnings     $45,000

                                   115,000

Assets

Non-Current assets

Fixed assets               $22,000

Current assets

Cash in hand               $93,000

                                     $115,000            

Wang company

Income statement

Net sales                      $88,000

Cost of sales                 $38,000

Gross margin                $50,000

Less:admin expenses   $5,000

Net Profit                       $45,0000

3 0
3 years ago
ssume that Kish Inc. hired you as a consultant to help estimate its cost of capital. You have obtained the following data: D 0 =
Rufina [12.5K]

Answer:

Option (D) is correct.

Explanation:

Given that,

Dividend, D0 = $0.90

Price, P0 = $27.50

Growth rate, g = 7.00% (constant)

D1 = D0 (1 + g)

    = $0.90 × (1 + 0.07)

    = $0.90 × 1.07

    = $0.963

Cost of equity, Ke = [ D1 ÷ P0 ] + g

                               = [$0.963 ÷ $27.50 ] + 0.07

                              = 0.0350 + 0.07

                               = 0.1050 i.e 10.50 %

7 0
3 years ago
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