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Sunny_sXe [5.5K]

3 years ago

13

Hugh has the choice between investing in a city of heflin bond at 6.45 percent or a surething bond at 10.40 percent. assuming th

at both bonds have the same nontax characteristics and that hugh has a 40 percent marginal tax rate. what interest rate does surething inc., need to offer to make hugh indifferent between investing in the two bonds?

1 answer:

netineya [11]3 years ago

3 0

Surething Inc. must give an interest rate of 17.33 percent to generate a 10.40 percent after-tax return and make Hugh indifferent between investing in the two bonds.

To solve for the pretax rate of return, we can use this formula:

<span> After-tax return = Pre-tax return x (1 – Marginal Tax Rate). </span>

10.40% = Pre-tax return x (1 – Marginal Tax Rate);

<span>Pre-tax return = 10.40% / (1 – Marginal Tax Rate) = 17.33%</span>

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You save for retirement over 30 years by investing $850/month in a stock account that yields 10%. You invest $350/month in a bon

sergejj [24]

Answer:

$13,287.70

Step-by-step explanation:

The future value of the stock account is computed as the sum of a geometric series. This computation assumes that the annual yield is compounded monthly.

FV = p((1+r/12)^(12n) -1)/(r/12)

For the stock account, p=850, r=0.10, n=30, so the future values is ...

FV = 850((1+.10/12)^360-1)/(.10/12)) = 1,921,414.74

For the bond account, p=350, r=.06, n=30, so the future value is ...

FV = 350((1+.06/12)^360 -1)/(.06/12) = 351,580.26

The combined account value at the end of 30 years is ...

$1,921,414.74 + 351,580.26 = $2,272,995.00

_____

The monthly payment that can be made over a 25 year period is given by the amortization formula.

A = P(r/12)/(1 -(1 +r/12)^(-12n))

= $2,272,995.00(.05/12)/(1 -(1+.05/12)^-300) = $13,287.70

You can withdraw $13,287.70 each month assuming a 25-year withdrawal period.

6 0

3 years ago

Kareem made $273 for 13 hours of work. at the same rate, how many hours would he have to make to work to make $147?

klio [65]

Answer:

105

Step-by-step explanation:

273/13 × 5= 105

That's the correct answer

5 0

2 years ago

The following data comparing wait times at two rides at Disney are listed below: Position Pirates Splash Mountain Sample Size 32

myrzilka [38]

Answer:

a) $(14.68 -18.77) - 2.39 \sqrt{\frac{11.87^2}{32}+\frac{16.79^2}{30}} =-12.968$

$(14.68 -18.77) + 2.39 \sqrt{\frac{11.87^2}{32}+\frac{16.79^2}{30}} =4.788$

b) $t=\frac{14.68-18.77}{\sqrt{\frac{11.87^2}{32}+\frac{16.79^2}{30}}}}=-1.10$

Step-by-step explanation:

Data given and notation

$\bar X_{A}=14.68$ represent the mean for Pirates

$\bar X_{B}=18.77$ represent the mean for Splash Mountain

$s_{A}=11.87$ represent the sample standard deviation for the sample Pirates

$s_{B}=16.79$ represent the sample standard deviation for the sample Slpash Mountain

$n_{A}=32$ sample size selected for Pirates

$n_{B}=30$ sample size selected for Splash Mountain

$\alpha=0.02$ represent the significance level for the hypothesis test.

t would represent the statistic (variable of interest)

$p_v$ represent the p value for the test (variable of interest)

Part a

The confidence interval would be given by:

$(\bar X_A -\bar X_B) \pm t_{\alpha/2} \sqrt{\frac{s^2_{A}}{n_{A}}+\frac{s^2_{B}}{n_{B}}}$

The degrees of freedom are given by:

$df = n_A +n_B -2 = 32+30-2 = 60$

Since we want 98% of confidence the significance level is $\alpha =1-0.98 =0.02$ and $\alpha/2 =0.01$ , we can find in the t distribution with df =60 a critical value that accumulates 0.01 of the area on each tail and we got:

$t_{\alpha/2}= 2.39$

And replacing we got for the confidence interval:

$(14.68 -18.77) - 2.39 \sqrt{\frac{11.87^2}{32}+\frac{16.79^2}{30}} =-12.968$

$(14.68 -18.77) + 2.39 \sqrt{\frac{11.87^2}{32}+\frac{16.79^2}{30}} =4.788$

Part b

State the null and alternative hypotheses.

We need to conduct a hypothesis in order to check if the means are equal, the system of hypothesis would be:

Null hypothesis: $\mu_{A} = \mu_{B}$

Alternative hypothesis: $\mu_{A} \neq \mu_{B}$

the statistic is given by:

$t=\frac{\bar X_{A}-\bar X_{B}}{\sqrt{\frac{s^2_{A}}{n_{A}}+\frac{s^2_{B}}{n_{B}}}}$ (1)

t-test: "Is used to compare group means. Is one of the most common tests and is used to determine whether the means of two groups are equal to each other".

Calculate the statistic

We can replace in formula (1) the info given like this:

$t=\frac{14.68-18.77}{\sqrt{\frac{11.87^2}{32}+\frac{16.79^2}{30}}}}=-1.10$

6 0

3 years ago

Marysya12 [62]

I think its option D

3 0

3 years ago

For brainliest and 100 points and no files or you will be reported and just to get points.

marshall27 [118]

Answer:

w=- $\frac{3u}{2}$ +2

Step-by-step explanation:

8 0

3 years ago

Read 2 more answers