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maw [93]
2 years ago
6

Sarah Wiggum would like to make a single investment and have ​$2.4 million at the time of her retirement in 40 years. She has fo

und a mutual fund that will earn 5 percent annually. How much will Sarah have to invest​ today? If Sarah invests that amount and could earn a 15 percent annual​ return, how soon could she​ retire, assuming she is still going to retire when she has ​$2.4 ​million?
Business
1 answer:
Ulleksa [173]2 years ago
4 0

Answer:

The correct answer for present value is 340,909.64 and for time is 13.96 years.

Explanation:

According to the scenario, the given data are as follows:

Future value(A) = $2,400,000

Rate of interest (r) = 5% or 0.05

Time period = 40 years

So, we can calculate present value by using following formula:

P = A / (( 1 + r )^t)

=  2,400,000 / ((1 + 0.05)^40)

= 2,400,000 / 7.03998871212

= 340,909.64

Now, we calculate time at 15% rate then,

A = P(1 + r)^t

where, P = 340,909.64

r = 15% or .15

A = $2,400,000

So, by putting the value we get,

$2,400,000 = 340,909.64 ( 1 + 0.15)^t

t = log(2400000/340,909.64) / log(1.15)

t = 13.96 years

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Answer:

Explanation:

There are different categories of evaluations a manager must make when examining a country's attractiveness such as Evaluation of Benefits, Evaluation of Costs and Evaluation of Risks. All these evaluation are necessary for high and sustained economic growth rates as well as means of attraction for location for international business for countries with market-based economic policies.

Cost evaluation provide insight on the total cost of the project.

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B. Evaluate Costs

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C. Evaluate Risks

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Which one of the following statements is not true about statements of cash flows prepared according to U.S. GAAP?a. The operatin
Nutka1998 [239]

Answer:

The correct answer is b. In the indirect method statement, the period's depreciation is added to net income because it is a source of cash

Explanation:

Indirect method make adjustment to reconcile the net income to cash. It depends on the account if it is added or subtracted to net income.

We are going to analyze the options

a. The operating section of the indirect method starts with the net income of the period TRUE

b. In the indirect method statement, the period's depreciation is added to net income because it is a source of cash

FALSE,  depreciation is not a source of cash

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TRUE

d. The investing section of the direct method statement for a period is identical to the investing section of the indirect method statement for the same period TRUE

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Paradise, Inc., has identified an investment project with the following cash flows. Year Cash Flow 1 $625 2 875 3 1,150 4 1,250
MissTica

Answer:

(a) If the discount rate is 11 percent, what is the future value of these cash flows in year 4?

To solve this problem, we must find the FV of each cash flow and add them.

To find the FV of a lump sum, we use:

FV = PV(1 + r)^t

[email protected]% = $625(1.11)^3 + $875(1.11)^2+ $1,150(1.11) + $1,250 = $4459

(b) What is the future value at a discount rate of 18 percent?

FV = PV(1 + r)^t

[email protected]% = $625(1.18)^3+ $875(1.18)^2+ $1,150(1.18) + $1,250 = $4852

(c) What is the future value at discount rate of 30 percent?

FV = PV(1 + r)^t

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