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german
3 years ago
7

Suppose you have $1,000,000 today and starting a year from now you intend to spend this money over the next 30 years. Assume the

nominal rate of interest is 9.2%, inflation rate of 5% and the real rate of interest is 4%. How much can you spend annually in real dollar terms over the next 20 years to ensure constant spending in real terms?
Business
1 answer:
elena55 [62]3 years ago
7 0

Explanation:

Here Initial amount = $10,00,000

Nominal Interest Rate = 9.2%

inflation  Rate = 5%

Real Interest Rate = 4%

in question it was asked to give in real then we will use the real discount rate to know annual spent amount

Present Value = PMT×PVIFA ( at 4% and 20 years)

Therefore, PMT = Present Value of Cash / PVIFA ( at 4% and 20 years)

= 1000000 / 13.5903

= $73581.75

Where,  PMT = Annual Spent Amount

PVIFA = Present Value interest Factor Annuity

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The richest 1% of the world's population owns more wealth than the rest of the 99% combined. True or False
zimovet [89]

The distribution of wealth on Earth is such that the richest 1% are wealthier than the rest of the 99% combined so this is <u>True</u>.

<h3>How is income distributed?</h3>

The top 1% of the human population are so wealthier that they own more than the combined assets of the other 99%.

This was confirmed in 2016 by Oxfam, and the scary part is that this trend is set to continue.

Find out more on income distribution at brainly.com/question/4993794

#SPJ1

5 0
2 years ago
Cara writes an e-check on Monday to pay a bill in the simulation. What is the earliest it will be applied to the vendor account?
Andrei [34K]

Based on the length of time an e-check generally takes, the earliest it might be applied to a vendor's account is on <u>Thursday</u>.

<h3>What day will the payment be applied to the vendor's account?</h3>

When an e-check is written, it has to be verified by the bank first. This process takes about 24 to 48 hours.

After verification, the bank can then send the funds to the vendor's account. This part of the transaction can take between 3 to 5 business days from the day the check was issued.

Considering the earliest time is 3 business days, an e-check written on Monday will reach a vendor's account three days later on a Thursday.

Find out more on online payments at brainly.com/question/1109723.

4 0
2 years ago
Edgewater Enterprises manufactures two products. Information follows: Product A Product B Sales price $ 13.50 $ 16.75 Variable c
olasank [31]

Answer:

The break-even point is $25,900 units

Explanation:

In this question we use the formula of break-even point in unit sales which is shown below:

= (Fixed expenses) ÷ (Contribution margin per unit)

where,  

Contribution margin per unit for product A = (Selling price per unit - Variable cost per unit) ×product mix

= ($13.50 - $6.15) × 40%

= $2.94

Contribution margin per unit for product B = (Selling price per unit - Variable cost per unit) ×product mix

= ($16.75 - $6.85) × 60%

= $5.94

So, the total contribution margin would be equal to

= $2.94 + $5.94

= $8.88

And, the fixed cost is $230,000

Now put these values to the above formula

So, the value would be equal to

= $230,000 ÷ $8.88

= $25,900 units

8 0
3 years ago
Which of the following choices correctly depicts whether McDonald's, the University Wisconsin, and Apple Inc. would have a need
Crazy boy [7]

Answer:

a. The division of activities into unit level, batch level, product sustaining level and facility level categories is commonly known as cost.

Explanation:

The managerial accounting is important for any service business. McDonalds have service business and they run on zero tolerance for disruption in consumer service. Management accounting enables to identify cost for product sustaining and batch producing.

3 0
3 years ago
Olivia is ordering trendy necklaces and earrings made with semi-precious stones from a supplier in Belize, for her city boutique
PtichkaEL [24]

Answer:

<u>b. False</u>

<u>Explanation:</u>

<em>Remember, </em>the term social responsibility in this context refers to an individual doing what would benefit society first, over any gain he may derive if he does otherwise.

For example, we are told that there is "low paying wages in Belize," which means low worker welfare, thus, even if no labor laws were been broken in his country, Olivia has a social responsibility to pay fair prices for the necklaces and earrings.

5 0
3 years ago
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