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Ray Of Light [21]
3 years ago
5

What single investment made today, earning 12% annual interest, will be worth $6,000 at the end of 6 years? b. What is the prese

nt value of $6,000 to be received at the end of 6 years if the discount rate is 12%? c. What is the most you would pay today for a promise to repay you $6,000 at the end of 6 years if your opportunity cost is 12%? d. Compare, contrast and discuss your findings in parts a through c.
Business
1 answer:
ankoles [38]3 years ago
4 0

Answer:

The results a-c  are the same $3,039.79  

However, the rate of return is given different names in each of the scenario.

In the first scenario, it was named annual interest which implies rate of return on an investment.

Annual interest is the same as discount rate because discounting an amount means stating in today's terms,which also applies to the amount to be invested when the future cash flow repayable is known, the amount to be invested can be brought back to equivalent amount today by discounting.

Finally, opportunity cost means the interest rate forgone by choosing to invest in one security,which is also the desirable rate of return convincing enough for the investment to be made.

A rate of return can be tagged annual interest, opportunity cost or discount rate,they are synonymous.

Explanation:

a.

The $6000 is the future value, the unknown is present value.

PV=FV*(1+r)^-N

r is the rate of return of 12% while N is 6 years

PV=$6000*(1+12%)^-6

PV=$3,039.79

b.the requirement also is PV with FV of $6,000 with discount rate of 12%,that rate of return,with N being 6 years

PV=$6000*(1+12%)^-6  

PV=$ 3,039.79  

c,The most to be paid for $6,000 with an opportunity cost of $12% is given below;

PV=$6000*(1+12%)^-6

    =$3,039.79  

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2 years ago
In many of the examples of specialization and trade it sometimes seems that one country is?
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In many of the examples of specialization and trade it sometimes seems that one country is?

It is getting favored more ideal arrangement over another, but we have near the no experience with the overall thriving created by the trade or prosperity produced by the exchange.

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To learn more about specialization enable countries to trade with one to another country

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6 0
1 year ago
A justification for job training programs is that they improve worker productivity. Suppose that you are asked to evaluate wheth
patriot [66]

Explanation:

1. The ceterus paribus effect gives us to what extent, the effect of a variable has on another variable, while holding all other factors fixed. Analysing job training of workers on productivity will give us results that are not biased since we will not be taking account of other factor variables in the calculations. When 2 firms are the same in almost every aspect apart from number of hours on training, then we will find out that each firm would have different levels of workers output. So we should know if workers output increases due to job training.

2. When it comes to provision of training, furms do these based on characteristics of the workers. Some of these characteristics are measurable while some are immeasurable

Measurable:

Experience on the job,

Productivity

Level of education,

immeasurable :

Skill set

Vision

Likeliness to bstay at firm

3. Apart from worker characteristics, productivity also depends on other factors one of which is technological change. A technological change can bring about increased efficiency and greater output by the worker. Different firms using different capital and technological combination are quite likely to have different output levels.

4. A positive correlation between job training and productivity cannot be used to ascertain if job training makes worker more efficient this is due to the fact that correlation only tells us if variables are in coexistence. So a positive correlation does not tell us that job training is indeed bringing about changes in the productivity of workers.

8 0
3 years ago
A country in South America is experiencing high inflation, around 15% annually, and high unemployment, around 25%. According to
Assoli18 [71]

Answer:

The correct answer is the option D: A negative real shock

Explanation:

To begin with, in the case presented where the economy has suffered from high inflation and unemployment rates then the most likely situation that could have happened before to explain this outcome is that the country and its economy were harmed badly by a negative real shock. This tend to happen when the aggregate supply is low and this one tends to decline rapidly affecting the economy in its whole due to the fact that the sellers are now producing less of the products and services and therefore the consumption and the real GDP decreases dramastically.

5 0
3 years ago
During March, the production department of a process operations system completed and transferred to finished goods 25,000 units
never [62]

Answer:

$2.10

Explanation:

The computation of the cost per equivalent unit for direct material is shown below:

= (Direct material cost + Beginning inventory cost) ÷ (equivalent units for the materials)

where,

Equivalent units would be

= Completed and transferred units + beginning work in progress units + additional units

= 25,000 + 110,000 + 30,000

= 165,000 units

And, all the other things would remain the same

= ($253,000 + $93,500) ÷ (165,000 units)

= $2.10

Since all the units are completed with 100% and we consider it same

7 0
3 years ago
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