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Anastasy [175]
4 years ago
6

QUESTION 14 Which of the following bank accounts has the lowest effective annual return? a. An account that pays 8% nominal inte

rest with annual compounding. b. An account that pays 8% nominal interest with daily (365-day) compounding. c. An account that pays 7% nominal interest with daily (365-day) compounding. d. An account that pays 7% nominal interest with monthly compounding. e. An account that pays 8% nominal interest with monthly compounding.
Business
1 answer:
Whitepunk [10]4 years ago
5 0

Answer:

<u><em>lowest </em></u>effective annual return

b. An account that pays 7% nominal interest with monthly compounding

Explanation:

The reasoning is because lesstimes a rate compounds, less interest it generated:

So between daily and monthly compounding, the lower effective rate is monthly compounding

<u>The Compound interest formula:</u>

Principal * (1+ r)^{time} = Ammount

<u>The compound interest with subperiodic compounds:</u>

Principal * (1+ \frac{r}{n} )^{time* n} = Ammount

Assuming time and Principal equal to 1 and we got:

(1+ r) = Ammount

and

(1+ \frac{r}{n} )^{n} = Ammount

Using your numbers, you will notice that as more subperiodic compounds, the more it grows the ammounts.

Resuming: at equal rate and principal, the most compunding has higher effective rate.

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Newton, Inc. just paid an annual dividend of $0.95. Their dividends are expected to increase by 4% annually. Newton Company stoc
Eduardwww [97]

Answer:

The required rate of return is 12.2%

Explanation:

Dividend growth model is used to calculate the price of the stock based on the dividend, its growth and required rate of return.

Formula to calculate the price

Price = Dividend / ( Required rate of return - Growth rate )

P = D / ( r - g)

P = $11.54

D = $0.95

g = 4%

Now placing the given values in the formula

$11.54 = $0.95 / ( r - 4% )

r - 4% = $0.95 / $11.54

r - 4% = 8.2%

r = 8.2% + 4%

r = 12.2%

8 0
4 years ago
Explain how the looting of shops and malls will affect businesses in terms of the relationship between social responsibility and
Ulleksa [173]

Social responsibility means an acceptable theory which is applies to everyone, expecting that the act of individual must benefit the whole of society.

Corporate Social Responsibility refers to practices and policies undertaken by  firms and other business, who are intending to have a positive influence on the environment and world at large.

Triple bottom line​ is also a concept that state that in addition to the <em>major objectives</em> of firms which is to make profit, they should ensure they impact the society and environment as well.

The looting of shops and mall will take a toll on the moral effort of firms and businesses adhering to the  triple bottom line​ concept as well as the corporate social responsibility as they have to count on the loss incurred, caused by the masses.

Despite that insurance provision and government can provide compensation for the looted goods, still, the morale of the firms authorities and business owners towards the social responsibility concept and triple bottom line​ concept will be negative

Learn more about this here <em>brainly.com/question/1341005</em>

5 0
3 years ago
A city assesses property owners $50 million to extend sewer lines to their neighborhood. By year-end, however, it has not begun
Rama09 [41]

Answer:

Recognize the assessments as assessments receivable and revenue.

Explanation:

Practically, this will result in a receivable in the reserve fund, if the amounts are not received when due.

This could be seen when an/a corporation may decide on the amount of an assessment years before the cash is been used.

But cannot really obtain the revenue at the time of the decision, since the corporation can change its decision up until the day the amount is due. Also there are no specific parties being assessed, until the owner on record is known on the day the assessment is due, also the assessment should be recognized as revenue of the reserve fund when due.

8 0
3 years ago
2 Points
Elza [17]

Answer:

C

Explanation:

As unsold items end up being stale and get wasted , it is good for a business to avoid such as much as  possible in order to maximize profit.

The customers buying pattern can easily reveal what they prefer to buy and what they do not buy . This can serve as a guide to the producer in what to sustain or increase producing and what to reduce or eliminate in the production line so as to maximally control the level of waste generated due to outdated or unsold stock.

7 0
3 years ago
Marko, Inc. is considering the purchase of ABC Co. Marko believes that ABC Co. can generate cash flows of $5,000, $9,000, and $1
nika2105 [10]

Answer:

$21,435.74

Explanation:

Marko will pay as much as the discounted present value of the cash flow:

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

Maturity  $5,000.00

time  1.00

rate  0.14000

\frac{5000}{(1 + 0.14)^{1} } = PV  

PV   4,385.9649

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

Maturity  $9,000.00

time  2.00

rate  0.14000

\frac{9000}{(1 + 0.14)^{2} } = PV  

PV   6,925.2078

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

Maturity  $15,000.00

time  3.00

rate  0.14000

\frac{15000}{(1 + 0.14)^{3} } = PV  

PV   10,124.5727

We add them together and get the total price for ABC Co

\left[\begin{array}{ccc}#&Cashflow&Discounted\\&&\\1&5000&4385.96\\2&9000&6925.21\\3&15000&10124.57\\&total&21435.74\\\end{array}\right]

8 0
4 years ago
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