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ipn [44]
3 years ago
12

An investment offers a total return of 14.0 percent over the coming year. Janice Yellen thinks the total real return on this inv

estment will be only 5.5 percent.
Required:
What does Janice believe the inflation rate will be over the next year?
Business
1 answer:
Oduvanchick [21]3 years ago
7 0

Answer:

8.06%

Explanation:

According to the Fisher equation

( 1 + Total rate of return) = (1 + real rate of return) x ( 1 + inflation rate)

(1.14) = (1.055) x ( 1 + inflation rate)

Inflation rate = 1.080569 - 1 = 0.080569 = 8.06%

You might be interested in
The following cost data pertain to the operations of Montgomery Department Stores, Inc., for the month of July. Corporate legal
deff fn [24]

Answer:

1.$134,000

2.$183,800

3.$124,050

Explanation:

1. Computation for the total amount of the costs that are direct costs of the Apparel Department

Apparel Department cost of sales - Evendale store $116,100

Apparel Department sales commission-Evendale store $7,950

Apparel Department manager's salary-Evendale store $9,950

Total direct costs for the Apparel Department

$134,000

2. Computation for the total amount of the costs that are direct costs of the Evendale Store

Apparel Department cost of sales - Evendale store $116,100

Store managers salary - Evendale store $18,300

Apparel Department sales commission-Evendale store $7,950

Store utilities - Evendale store $17,800

Janitorial costs - Evendale store $13,700

Apparel Department manager's salary-Evendale store $9,950

Total direct cost for the Evendale store $183,800

3. Computation for the total amount of the Apparel Department's direct costs that are variable costs with respect to total departmental sales

Apparel Department cost of sales - Evendale store $116,100

Apparel Department sales commission-Evendale store $7,950

Total variable cost-Apparel department $124,050

6 0
3 years ago
How many years would it take for money to increase to 3 times the initial amount at an interest rate of 18% per year?
arlik [135]

Answer:

7 years (to the nearest year)

Explanation:

Given that;

A = amount

P= principal

t = time

r = rate

A =3P(given in the question)

Formula for compound interest;

A = P(1 + r)^t

Substituting values;

3P = P(1 + 18/100)^t

3P/P= (1.18)^t

3 = (1.18)^t

log 3 = t log 1.18

t = log 3/log 1.18

t = 0.4771/0.0719

t = 6.6 years

t = 7 years (to the nearest year)

3 0
2 years ago
The treasurer of a major U.S. firm has $40 million to invest for three months. The interest rate in the United States is .28 per
diamong [38]

Answer:

Check the explanation as follows.

Explanation:

a) If it is invested in US

Current= $40 million

Interest rate= 0.28% p.m

Interest for 1 month= $40 million*0.28%= $0.112 million

Interest for 3 months= $0.112*3= $0.336 million

Total value after 3 months= $40 million+$0.336 million = $40336000.

b) If it is invested in Great Britain.

Convert $40 million into Pounds= $40 million*0.639 = Pound 25.56 million

Ivest in Great Britain for 3 months @ 0.32%

Interest per month= 25.56 million*0.32% *3 = 0.245376

Total Pounds after 3 months= Pound 25.805376

Convert into $= 25.805376/0.642 = $40195289.7156

Value if invested in great britain= $40195289.7156

8 0
3 years ago
Newtech Inc. hires John for the position of a software programmer to work on their new project. Salary paid to John by Newtech I
mote1985 [20]

Answer:

Direct Cost.

Explanation:

As Newtech Inc. has hired John for the position of a software programmer to work on their new project. Salary paid to John by Newtech Inc. would be direct cost. Direct costs are the costs which can be tied directly to the manufacturing of products and services and they can be traced very easily as well. Labor cost, commissions, manufacturing supplies, direct material are the direct costs which can traced back to the manufacturing products quite easily.

3 0
3 years ago
All the following are examples of start-up costs EXCEPT
Zolol [24]

Answer:

A . payroll taxes.

Explanation:

Payroll taxes are imposed on the employers or employees of the company. In the examples of the question, the costs except for the payroll taxes are all paid by the company. Besides, payroll taxes are also not taxed on the company instead of on the employees' wages, which is funded by them. That is why all the examples are start-up costs except the payroll taxes

6 0
3 years ago
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