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4 years ago

What were the main reasons grange decided to leave school in order to start his own team?

1 answer:

3 0

One of the main reason is He <span>Knocked out in one of the games during high school. Grange remained unconscious for two days after the blow and started to experience difficulity in speaking. This make his career became really blurry and none of the team want to sign him. In the end, he had to make his own team.</span>

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Frank is lending $1,000 to Sarah for two years. Frank and Sarah agree that Frank should earn a 2 percent real return per year. I

egoroff_w [7]

Answer:

a. 23%.

b. Frank should charge Sarah 2% more than the inflation rate.

Explanation:

a. Find the nominal rate of interest.

To find this value we must follow this equation:

$NI=RI+IR$

Where NI = Nominal Interest, RI= Real Interest, and IR= Inflation Rate.

a.1. Find the real interest rate.

The problem statement gives us this value: 2% real return per year, as agreed by Sarah and Frank.

a.2. Find the inflation rate.

Here we follow this equation:

$IR=(\frac{CPI_{F} -CPI_{B} }{CPI_{B} } )*100$

Where:

CPI(F) is the CPI of the final year, in this case, it would be 121 (the expected CPI for two years, which is the established loan time).

CPI (B) is the CPI of the base year, that is, the CPI in force at the time that Frank makes the loan, 100 in this case.

We replace these values:

$IR=(\frac{121-100}{100} )*100$

$IR=(\frac{21}{100} )*100$

$IR=0.21*100$

$IR=21%$

The inflation rate equals 21%.

a.3. Replace in the equation of the nominal rate of interest.

$NI=RI+IR$

$NI=0.02+0.21$

$NI=0.23$

So, the nominal rate of interest Frank should charge Sarah equals 23%.

b. Find out how much Frank should charge Sarah (regarding inflation and considering that it is unknown).

The inflation rate reduces the return expected by Frank. Therefore, the nominal interest rate charged must be higher than the inflation rate, in order to ensure a positive real returns. In this case, since it is not known exactly what that inflation rate is, Frank must charge 2% (expected return) above what the inflation rate can record.

Hence, the short answer is: Frank should charge Sarah 2% more than the inflation rate.

8 0

3 years ago

you lend a friend 10,000 dollars for which your friend will repay you 27,027 dollars at the end of 5 years. What interest rate a

Step2247 [10]

Answer:

The interest rate is "21.999%".

Explanation:

The given values are:

Amount lent,

= 10,000

Amount repaid,

= 27,027

Years (n),

= 5

As we know,

⇒ $Amount \ repaid = Amount \ lent\times (1+r)^n$

On substituting the given values, we get

⇒ $27,027=10,000\times (1+r)^5$

⇒ $\frac{27,027}{10,000}=(1+r)^5$

⇒ $2.7027=(1+r)^5$

⇒ $1+r = (2.7027)^{(1/5)}$

⇒ $1+r=1.21999$

On subtracting "1" from both sides, we get

⇒ $1+r-1=1.21999-1$

⇒ $r=0.21999$

i.e.,

⇒ $r=21.999 \ percent$

5 0

3 years ago

Drogo, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding with 14 years to maturity that is qu

just olya [345]

Answer:

a. 7.30%

b. 4.745%

Explanation:

For computing the pretax cost of debt we have to applied the RATE formula i.e to be shown in the attachment below:

Given that,

Present value = $1,000 × 106% = $1,060

Assuming figure - Future value or Face value = $1,000

PMT = 1,000 × 8% ÷ 2 = $40

NPER = 14 years × 2 = 28 years

The formula is shown below:

= Rate(NPER;PMT;-PV;FV;type)

The present value come in negative

So, after applying the above formula

a. The pretax cost of debt is

= 3.65% × 2

= 7.30%

b. And, the after tax cost of debt would be

= Pretax cost of debt × ( 1 - tax rate)

= 7.30 % × ( 1 - 0.35)

= 4.745%

4 0

3 years ago

TB MC Qu. 1-150 Haack Inc. is a merchandising company ... Haack Inc. is a merchandising company. Last month the company's cost o

Sever21 [200]

Answer:

$87,200

Explanation:

The computation of the total amount of merchandise purchase is shown below:

As we know that

Cost of goods sold = Beginning merchandise inventory + purchase of merchandise - ending merchandise inventory

$69,400 = $11,600 + purchase of merchandise - $29,400

$69,400 = -$17,800 + purchase of merchandise

So, purchase value of merchandise is

= $69,400 + $17,800

= $87,200

5 0

3 years ago

In an attempt to have funds for a down payment, Jan Carlson plans to save $3,700 a year for the next five years. With an interes

Sveta_85 [38]

Answer:

$20,857.24

Explanation:

This is an ordinary annuity question which can be solved using a financial calculator. The inputs are as follows;

Total duration of investment; N = 5

Interest rate per year; I/Y = 6%

Recurring annual payment; PMT = 3,700

One time cashflow; PV = 0

then compute the future value of the annuity; CPT FV = 20,857.244

Therefore, Jan will have $20,857.24 as down payment in 5 years.

7 0

3 years ago