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3 years ago

the nominal interest rate is 7 percent and the expected inflation rate is 4 percent. the real interest rate is

Business

1 answer:

Hoochie [10]3 years ago

6 0

Answer:

2.88%

Explanation:

According to the fisher equation :

(1 + Nominal interest ) = (1 + real interest) (1 + inflation rate)

(1.07) = (1.04) x (1 + real interest)

(1.07) / (1.04) = (1 + real interest)

1.028846

real interest rate = 2.88%

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Instructions: Questions 1-4 use the financial model on tab Q1-4 in the Exam Workbook. Complete the model by filling in the blank

Ad libitum [116K]

1. The completion of the financial model with the Sales Units and Sales Revenues is as follows:

Financial Model (showing the Sales Units and Sales Revenue)

2014 2015 2016 2017 2018

Sales units 200,000 210,000 237,300 272,895 297,456

Sales Revenue 9,998,000 10,497,900 11,862,627 13,642,021 14,869,825

2. The forecast revenue in 2017 is <u>$13,642,021</u>.

<h3>Data and Calculations:</h3>

2014 2015 2016 2017 2018

Growth Rate of Units Sold: 5% 13% 15% 9%

Sales units 200,000 210,000 237,300 272,895 297,456

Sales Price per unit = $49.99

Sales Revenue 9,998,000 10,497,900 11,862,627 13,642,021 14,869,825

The sales revenue = Sales Units x Sales Price per unit.

Thus, the forecast revenue in 2017 is $13,642,021.

Learn more about forecasting revenue in future years at brainly.com/question/11033682

4 0

3 years ago

You've collected the following information about Molino, Inc.: Sales $ 215,000 Net income $ 17,300 Dividends $ 9,400 Total debt

evablogger [386]

Answer:

(a) 15.46%

(b) $11,904.11

(c) 6.15%

Explanation:

(a) Sustainable growth rate:

$Return\ on\ equity\ (ROE)=\frac{Net\ income}{Total\ equity}$

$Return\ on\ equity\ (ROE)=\frac{17,300}{ 59,000}$

= 29.32%

Retention Ratio = 1 - Dividend Payout

$=1-[\frac{9,400}{17,300}]$

= 45.66%

$Sustainable\ growth\ rate=\frac{(ROE\times Retention\ Ratio)}{(1-ROE\times Retention\ Ratio)}$

$Sustainable\ growth\ rate=\frac{(0.2932\times 0.4566)}{(1-0.2932\times 0.4566)}$

$=\frac{0.1338}{0.8662}$

= 0.15446

= 15.46%

(b) Additional borrowing:

New Total Asset = (Total debt + Total equity) × (1 + Sustainable growth rate)

= (77,000+59,000) × (1 + 15.46%)

= 157025.4

$New\ Debt=\frac{D}{D+E}\times New\ Total\ Asset$

$New\ Debt=\frac{77,000}{77,000+59,000}\times 157024.4$

= $88904.11

Increase in Borrowing = New debt - old debt

= $88,904.11 - $77,000

= $11,904.11

$ROA=\frac{Net\ income}{Debt+equity}$

$ROA=\frac{17,300}{77,000+59,000}\times 100$

= 12.72%

$Internal\ growth\ rate=\frac{(ROA\times Retention\ Ratio)}{(1-ROA\times Retention\ Ratio)}$

$Internal\ growth\ rate=\frac{(0.1272\times 0.4566)}{(1-0.1272\times 0.4566)}$

$=\frac{0.0580}{0.942}$

= 0.0615

= 6.15%

6 0

3 years ago

Which of the marketing mix elements corresponds to what the buyer gives up in the marketing exchange?.

vazorg [7]

Price is the element of the marketing mix that corresponds to what the buyer gives up in the marketing exchange.

<h3 /><h3>What is the marketing mix?</h3>

They are the set of activities performed by marketing to promote a product or service and increase the profitability of a company. The four Ps of marketing are:

Product
Price
Place
Promotion

Therefore, the objective of the marketing mix is to increase the value of the brand and its positioning through the creation of value for the consumer.

Find out more about marketing mix here:

brainly.com/question/859394

#SPJ1

3 0

2 years ago

Which of the following is unlikely to be a primary building block in a company's organizational structure?

pishuonlain [190]

Answer and Explanation:

The correct answer is option C

C. Empowered employee departments

7 0

3 years ago