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stealth61 [152]
3 years ago
9

Loaded-Up Fund charges a 12b-1 fee of 1.00% and maintains an expense ratio of 0.50%. Economy Fund charges a front-end load of 3.

0%, but has no 12b-1 fee and an expense ratio of 0.25%. Assume the rate of return on both funds’ portfolios (before any fees) is 12% per year. How much will an investment in each grow to after 1 year?

Business
1 answer:
stira [4]3 years ago
8 0

Answer:

The complete question is found in the attachment

Explanation:

End Value of Investment = Investment * (1 - Front-end load) * (1 + r - True Expense Ratio)T

Loaded-up fund:

True Expense Ratio = Expense Ratio + 12b-1 fee = 0.5% + 1% = 1.5%

a). 1-year:

End Value of Investment = $1,000 * (1 - 0) * (1 + 0.06 - 0.015)1 = $1,000 * 1 * 1.045 = $1,045.00

b). 3-years:

End Value of Investment = $1,000 * (1 - 0) * (1 + 0.06 - 0.015)3 = $1,000 * 1 * 1.1412 = $1,141.17

c). 10-years:

End Value of Investment = $1,000 * (1 - 0) * (1 + 0.06 - 0.015)10 = $1,000 * 1 * 1.5530 = $1,552.97

Expense Fund:

a). 1-year:

End Value of Investment = $1,000 * (1 - 0.03) * (1 + 0.06 - 0.0025)1

= $1,000 * 0.97 * 1.0575 = $1,025.78

b). 3-years:

End Value of Investment = $1,000 * (1 - 0.03) * (1 + 0.06 - 0.0025)3

= $1,000 * 0.97 * 1.1826 = $1,147.13

c). 10-years:

End Value of Investment = $1,000 * (1 - 0.03) * (1 + 0.06 - 0.0025)10

= $1,000 * 0.97 * 1.7491 = $1,696.58

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Answer:

393 units will need to be sold to breakeven

Explanation:

Break even point is the point where a Company makes neither makes a profit nor a loss.

Step 1 : Calculate new variables

New Sales = $250 x 1.40 = $350

Variable Costs = $250 x 30 % = $75

New Fixed Costs = $120,000 x 90 % = $108,000

Step 2 : Break even (units)

Break even (units) = Fixed Costs ÷ Contribution per unit

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Catamount Company had current and accumulated E&P of $500,000 at December 31, 20X3. On December 31, the company made a distr
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Answer:

D. No loss recognized and a reduction in E&P of $200,000

Explanation:

Given that:

  • Current and accumulated E&P : $500,000
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From that, we can see that the current and accumulated E&P is greater than its distribution of land so no loss would be reported so there will be reduction in earning and profits of the company of $200,000.

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Answer:

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Answer:

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