Answer:
300 comic books
Explanation:
<em>Purchasing power of money at any point in time is the quantity of goods and services that can be acquired using the stock of money at the prevailing price level.</em>
As at the time the $3000 money was deposited, the price per book stood at $10.
Purchasing power of $3000
= $3000/$10
= 300 comic books
Answer: 10%
Explanation:
Using the Gordon Growth Model, the price of a stock can be calculated as follows:
Price = Next dividend / (Required return - growth rate)
Notice that we are provided with all the figures in the formula above except the growth rate so we can calculate the growth rate with these figures:
50 = 5 / (20% - growth rate)
50 * (20% - growth rate) = 5
20% - growth rate = 5 / 50
-growth rate = 10% - 20%
-Growth rate / -1 = -10% / -1
Growth rate = 10%
Answer:
nonforfeiture provision.
Explanation:
A nonforfeiture provision in a cash value life insurance policy allows a policy owner to terminate the policy in return for a reduced paid-up policy of the same type.) (A partial surrender allows the policyowner to withdraw the policy's cash value interest free.)
Answer:
B) no greater than 4.53 percent
Explanation:
We need to calculate the present value of $300 million using both discount rates:
present value₁ = $300 / 1.0453⁷ = $220
present value₂ = $300 / 1.0581⁷ = $202
In order for a project to be accepted, its NPV ≥ 0, and only if we use the 4.53% discount rate will our project have a NPV of 0 (= $220 - $220).
So the company will decide to build the factory only if the interest rate (discount rate) is no greater than 4.53%.
