Answer:
CPI = (4+6) / (2+5) = 1.43
INFLATION RATE = 1.43 / (2+5) = 0.2 x 100 = 20%
Explanation:
The people of Fort Worth buy only juice and cloth. The CPI market basket contains the quantities bought in 2009.
The average household spent
ITEM OLD PRICE NEW PRICE
JUICE $2.00 $4
CLOTH $5.00 $6
CPI = NEW PRICE / OLD PRICE
CPI = (4+6) / (2+5) = 1.43
INFLATION RATE = CHANGE IN PRICE (CPI) / OLD PRICE x 100
INFLATION RATE = 1.43 / (2+5) = 0.2 x 100 = 20%
Answer: $112
Explanation:
The following information can be gotten from the question:
Growth Rate = 5%
Dividend at end of year,D1 = 5.60
Required return, ke = 10%
Then, the current market value will be:
P0 = De/(ke-g)
= 5.60/(10% - 5%)
= 5.60 / 5%
= 5.60/0.05
= $112
Therefore, the current market value of a share of IBM stock is $112.
I will you choose expensive luxury vocation
Answer: $17.28
Explanation:
6 month free concession in first year drops rent to:
= 20 / 2
= $10
Effective rent = [Present value of Year 1 rent + Present value of Year 2 rent + Present value of Year 3 rent ] / [ 1 - (1 / (1 + rate)^ number of years) / rate]
= [(10 / (1 + 10%) ) + (21 / (1 + 10%)²) + (22 / (1 + 10%)³)] * [1 - (1 / (1 + 10%)³/ 10%)]
= (9.09 + 17.355 + 16.5289) / 2.48685
= $17.28