Answer:
Accounting
Explanation:
Accounting is the process of recording, measuring and presenting the fnancial information of a company. Accounting allows to understand and analyze the financial health of an organization and make the appropiate decisions based on that. Because of this, the answer is that the system that maintains records of a company's operations and then communicates that information to decision makers is referred to as accounting.
The correct answers are B) as inflation rises, the buying power of the fixed pension plan will not be able to keep up if the same fixed income is earned in 1990 as it was in 1980. And C) inflation will have dramatically increased living expenses and it will be difficult to maintain the same purchasing power.
An increase in inflation above expectations will affect the worker's purchasing power in retirement in the following ways: as inflation rises, the buying power of the fixed pension plan will not be able to keep up if the same fixed income is earned in 1990 as it was in 1980. Also, inflation will have dramatically increased living expenses and it will be difficult to maintain the same purchasing power.
That is the problem with pensions. When people retire from work, they will receive a fixed amount of money on a monthly basis. But inflation is always a factor that makes prices to be higher. So if the income level of the individual stays the same, inflation will limit is purchase capacity because the person will still receive the same pension although the prices of products and goods could dramatically change in the case of an increase in inflation above expectations.
This one is tricky, only because you aren't sure if they are adding the percentage before you deposit 4,000 more, or after. Since both are annually.
But I would add 11,122.76 and 4,000 =15,122.76 add 12% which is 1814.73 making your total for the first year = 16,937.49.
Then assume it again, you add 4,000. That's 20,937.49
add 12% of 20,937.49 which is 2512.50 so that equals =23,449.99 by the end of year 2.
so add 4,000 again, that's 27,449.99
find 12% and add it to get =3294 add that to the total =30,743.99 by year 3.
(I'm sure they want you to round, which I keep doing with my decimals, but it'll probably go faster if you round ahead of time, but I'm trying to be accurate)
Keep going....
34,743.99 which 12% added is 4169 or a total of $38,912.99 by end of year 4.
add 4,000 to get =42,912.99 and 12% that's roughly a total of 48,063 rounded by the end of year 5.
52,063 at 12% 58,310 by year 6.
58,000 add 12% = 64,960 at end of year 7
68,960 add 12%= 77235 at year 8
81,235 add 12% =90,983 by year 9
94,983 add 12% =106,380 by year 10 (this is where you can assume that they'd want you to double it and it's be 20 years and 210,000. But in real math, the amount is increasing so much because it's 12% of the current balance)
123,626.56 year 11
142,942 by year 12
164,574 by year 13
188,803 by year 14
203, 939 by year 15
So you'd go over 210 by year 16.
Now again, this depends if they add the 12% before or after you deposit 4,000 each year. It also has to have an easier equation, but to be accurate I did it this way. I'm sure that they want you to do like x=years and you'd go 11,122.76+4,000 multiplied by 12% and then try different years to see the number you get until you'd come to 16.
Answer:
At 10 percent capitalization rate the price of the stock is $104.49
At 7 percent capitalization rate the price of the stock is $156.48
Explanation:
D1 = 5
D2 = 5 x 1.2 = 6
D3 = 5 x 1.2^2= 7.2
D4 = 5 x 1.2^3 = 8.64
D5 = 5 x 1.2^4 = 10.37
D6 = 5 x 1.2^5 = 12.44
At 10 percent capitalization rate the price of the stock can be computed by first calculating the present value of the dividends computed above
5/1.1 = 4.54
6/1.1^2 = 4.96
7.2/1.1^3 = 5.41
8.64/1.1^4 = 5.90
10.37/1.1^5 = 6.44
12.44/1.1^6 = 7.02
Price after six years when the stock will experience zero growth should be
P = 12.44/0.1 = 124.4
The present value of the price six years after should be
124.4 / 1.1^6 = 70.22
Adding up all the p[resent values gives us the price of the stock today
4.54 + 4.96 + 5.41 + 5.90 + 6.44 + 7.02 + 70.22 = $104.49
At 7 percent capitalization rate the price of the stock can be computed by first calculating the present value of the dividends computed above
5/1.07 = 4.67
6/1.07^2 = 5.24
7.2/1.07^3 = 5.88
8.64/1.07^4 = 6.59
10.37/1.07^5 = 7.39
12.44/1.07^6 = 8.29
Price after six years when the stock will experience zero growth should be
P = 12.44/0.07 = 177.71
The present value of the price six years after should be
177.71 / 1.07^6 = 118.42
Adding up all the p[resent values gives us the price of the stock today
4.67 + 5.24 + 5.88 + 6.59 + 7.39 + 8.29 + 118.42 = 156.48