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Tpy6a [65]
3 years ago
14

Sarah Wiggum would like to make a single investment and have ​$2 million at the time of her retirement in 35 years. She has foun

d a mutual fund that will earn 4 percent annually. How much will Sarah have to invest​ today? If Sarah invests that amount and could earn a 14 percent annual​ return, how soon could she​ retire, assuming she is still going to retire when she has ​$2 ​million?
Business
2 answers:
Anarel [89]3 years ago
5 0

Answer:

Solution please, where did you get .2534?

ra1l [238]3 years ago
3 0

Answer:

a) Amount to be invested today = $506,830.9

b) She will retire in 10.5 years time

Explanation:

The amount to be invested by Sara Wiggum today at 4%  to accumulate $2 million in 35 years is called the Present Value.

Present value (PV) is  the discounted value of a future amount at the opportunity cost rate of return .  The amount to be invested now at a particular rate of return to equal a future sum.

Present Value (PV)= (1+r)^(-n) × Future cash flow

For Sarah, the

PV = (1+0.04)× (-35) × 2,000,000

    = 0.2534 × 2,000,000

     = 506,830.9415

Amount to be invested today = $506,830.9

<em>How soon will She retire at rate of 14% per annum?</em>

The PV is still  506,830.9415,

FV is still 2,000,000,

But rate now is - 14%, and

n - ?.  

so we need to work out "n"

Work out "n" as folows:

(1+0.14)^(-n) = 2000000/506,830.9

(1+0.14)^(-n)   = 3.9406

n =  log 3.9406/log 1.14

n = 10.5 years

She will retire in 10.5 years time

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alexandr402 [8]

Answer:

c.  I, II, and III only

Explanation:

As we know that

Free cash flow = Earnings before Interest and Taxes ×  (1-Tax Rate) + Amortization and Depreciation expense - Change in Net Working Capital -Capital Expenditure

And, the Net income is determined after considering all cash and non cash expenses.

Therefore, I, II and III statements are considered

Hence, the option c is correct

6 0
2 years ago
What are some ways to manage a stakeholder relationship closely? Give examples of how you might manage relationships differently
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3 years ago
When the balance of an equity account, like Capital Stock, increases, it means that the account has been: Multiple Choice Deposi
Soloha48 [4]

Answer:

Credited

Explanation:

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So, when the account increased, we say it has been credited. This means further stock has been issued to new or existing owners.

8 0
3 years ago
A stock has annual returns of 5 percent, 21 percent, -12 percent, 7 percent, and -6 percent for the past five years. The arithme
sergij07 [2.7K]

Answer:

Arithmetic = 3%

Geometric = 2.37%

Explanation:

The arithmetic average of 'n' returns is given by:

A = \frac{\sum r_i}{n}

For five returns of 5% ,21%, -12%, 7%, and -6%:

A=\frac{0.05+0.21-0.12+0.07-0.06}{5}\\ A=0.03=3\%

The geometric average of 'n' returns is given by:

G=\sqrt[n]{(1+r_1)*(1+r_2)*...*(1+r_n)}-1

For five returns of 5% ,21%, -12%, 7%, and -6%:

G=\sqrt[5]{(1+0.05)*(1+0.21)*(1-0.12)*(1+0.07)*(1-0.06)}-1\\G=0.0237=2.37\%

8 0
3 years ago
A process includes 9 tasks and there are 3 workers. Each task can be assigned to only one worker and each worker must be assigne
Katen [24]

Answer:

24.8 per hour

Explanation:

There are 3 workers and hence are three workstations. Consecutive activities are assigned to each workstation such that workload is as uniform as possible

Hence the time in each workstation (WS) is,  

WS1 = 45+55+15 = 115 seconds

WS2 = 25+50+5+30 = 110 seconds

WS3 = 95+50 = 145 seconds

Workstation 3 has the highest processing time and hence is the bottleneck and determines the capacity of the process

Therefore capacity = 1/145 per second = 3600/145 per hour = 24.8 per hour

8 0
2 years ago
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