Indicate whether each of the following statements is true or false.

Farrell wants to retire in six years. To have sufficient assets to fund retirement, Farrell needs to accumulate an additional $4

Mademuasel [1]

Answer:

$73,070.5

Explanation:

Inflation erodes the value of money. It makes more quantity of money to required to buy the same basket of food and services in the future.

With inflation, to calculate the the quantity of Dollars needed in n years time, we use the formula;

Inflated amount = h × (1 + f)^n

h= amount required today, f - inflation rate, n- number of years

So if Farrell needs $400,000 in 6 years time in real terms, with an inflation of 5% per year, he would need to have a quantity of money equal to

1.05^6 × 400,000 = $536,038.3.

To provide for $536,038.3 in 6 years time, he would need to contribute into a sinking fund on a yearly basis, an equal amount denoted as "A" in the formula below:

FV = A × ((1+r)^n - 1)/r

FV - 536,038.3, r - 8%, n = 6

536,038.3 = A × ((1+0.08 )^(6) - 1)/0.08)

536, 038.3 = A × 7.3359

536,038.3/7.3359 = A

$73,070.5 = A

Farrell should invest at the end of every year

$73,070.5

7 0

3 years ago

You see a television commercial for a product you may want to buy, and there is a telephone number you must call to place an ord

bulgar [2K]

Answer:

krkfkfgkgkgkgkf

Explanation:

nxnxnxxnxnxckfk

8 0

3 years ago

?if a corporation issued $8,000,000 in bonds which pay 5% annual interest, what is the annual net cash cost of this borrowing if

MrRissso [65]

$8,000,000 - corporate issued
5 % - annual interest
30 % - income tax rate
Annual net cash cost - ?

Formula and Solution - (8,000,000 x 0.05) x 0.7 = 280,000
Answer: The Annual net cash cost - $280,00

4 0

3 years ago

Assume that price level in the ABC Islands, a U.S. trading partner, increases signalling inflation in the economy. Using aggrega

lubasha [3.4K]

Answer:

The effects of inflation in the U.S. trading partner, will pass through the U.S. economy in the form of exports: since the U.S. imports goods from ABC islands, the higher prices in the ABC islands will make imports from there more expensive, contributing to a small raise in inflation in the overall U.S. economy.

However, exports from ABC Islands are likely to be a small component of U.S. Aggregate demand, so the effect in overall inflation is likely to be small.

Despite this, the fed can step in and raise interest rates by contracting the money supply. This is contractionary monetary policy, and it is used when inflation is rising. It lowers the value of the U.S. dollar in international markets, but it increases output price level.

8 0

3 years ago

Marketing efforts that reward the frequent purchase and consumption of an offering are ________.

Kazeer [188]

Answer:

Loyalty Programs

Explanation:

Loyalty program - a set of marketing activities for the development of repeated sales to existing customers in the future, selling them additional goods and services, promoting corporate ideas and values, and other types of potentially profitable behavior. It is carried out mainly at the stage of maturity of the product life cycle.

A typical example of a company’s loyalty program is a discount card, with further purchases using a discount card, discounts can be provided, including on a funded system, and there may also be bonus and gift systems. In addition, upon receipt of such cards, as a rule, a questionnaire is filled out, which indicates the recipient’s contacts, which gives the organization the opportunity to notify the buyer of new and potentially interesting products and services.

For automated analysis of client behavior and management, CRM systems are used. With an in-depth analysis of data on purchases made by the client, it is possible to identify goods and services in which the client is potentially interested. For example, an online store, based on an analysis of customer purchases, may show an authorized user a list of recommendations - products that may interest him. In stores using RFID technology, it is planned to introduce similar services

7 0

3 years ago