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USPshnik [31]
3 years ago
7

Today, you turn 21. Your birthday wish is that you will be a millionaire by your 40th birthday. In an attempt to reach this goal

, you decide to save $75 a day, every day, until you turn 40. You open an investment account and deposit your first $75 today. What rate of return must you earn to achieve your goal? Note: Ignore Leap Years.
Business
1 answer:
JulsSmile [24]3 years ago
5 0

Answer:

rate of 0.000171716533316905 = 0.017% daily

Explanation:

we need to solve for the rate of an annuity for 19 years with daily deposits of 75 dolllars to yield a principal of 1,000,000 dollars

365 days x 19 years = 6,935 days

we use goal seek on excel as follow:

on A1 we write 0.01 this will be a placeholder for the rate

then on A2 we write  =FV(A1;6935;75)

then with goal seek we definethat we want A2 equal to 1,000,000 changing A1 (rate)

which give us:

0.000171717  = 0.017% per day to achieve the goal:

C \times \frac{(1+r)^{time} -1}{rate} = FV\\  

C 75

time 6935

rate 0.000171717

75 \times \frac{1-(1+0.000171716533316905)^{-6935} }{0.000171716533316905} = FV\\  

FV $999,999.9999  

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Briefly describe the differences among international bond, bank and equity markets. Would you support an MNC that favors financi
Katen [24]

Answer:

Answer to this question is explained below in detail.

Explanation:

This question is not complete. This has two parts a) and b). Part a) is complete and b) is incomplete. I have written down the complete question and will try to answer completely.

a) Briefly describe the differences among international bond, bank and equity markets.

b) Would you support an MNC that favors financing through bonds issues or would you rather support one that favors financing through stock issues?

Solution:

a) We are asked to differentiate between international bond, bank and equity markets.

All three terms are related to raising funds, lending or borrowing to raise the capital for some government or for any company.

Let's start with International Bonds first.

International Bonds : In this globalized world, a company can raise its capital through getting debt in the form of international bonds from international institutions over the assets value of the company. For example: XYZ company has a asset value of 10 million dollars, so it can get international bonds accordingly.  

International Equity markets: Again due to interlinked world, companies and institutions all over the world can invest their funds in any company around the globe. And through equity markets companies can sell their shares to raise its capital depending upon the asset value of the company.

International Banks: International banks are international institutions which raise capital in particular country and have branches all over the world. It can lend funds to companies on particular interest rates. Furthermore, all those bonds are generated in these banks as well.

b) Supporting an MNC that favors financing through bonds issues or through equity markets or stock issues will depend on the debt/equity ratio of the company. If it is low, company should go for debt or bond issues. If it is high then it should opt for stock issues.

6 0
3 years ago
Southern Foods just paid an annual dividend of $1.10 a share. Management estimates the dividend will increase by 10 percent a ye
Gnoma [55]

Answer:

$16.21

Explanation:

Worth of the stock is the present value of all the cash flows associated with the stock. Dividend is the only cash flow that a stock holder receives against its investment in the stocks. We need to calculate the present values of all the dividend payments.

Dividend Payment               $1.10    

Growth rate first 3 years 10%  

Growth rate first 4 years 3.2%  

Required rate of return          12%  

                                                 Dividend   Discount Factor    PV Factor

First year Dividend                     $1.21      0.892857143         $1.08  

Second year Dividend               $1.33     0.797193878          $1.06  

Third year Dividend                   $1.46     0.711780248          $1.04  

Fourth year Dividend                 $1.61      0.635518078        $1.02  

Stock value after fourth year = $18.89    0.635518078       <u>$12.00 </u>

Stock Value                                                                            <u>$16.21 </u>

5 0
3 years ago
Renting provides _________ flexibility but can lead to _________ costs in the long-term
Nonamiya [84]

The answer is:

- Greater

- Higher

Since you did not spend large amount of money in renting, you can move freely without feeling that you've spend to much for the place to stay. This is why renting is considered to be more flexible compared to owning a house.

But, Renting tend to lead to higher cost in the long run because the owner of the property would definitely impose higher price than they spend to buy the property. Otherwise they would not obtain any profit.

4 0
3 years ago
Read 2 more answers
In business markets, individuals or groups purchase products for one of three purposes. These purposes areA) resale, wholesale,
Elanso [62]

Answer:

D). Resale, Direct Use in Producing Other Products and Use in General Daily Operations

Explanation:

Business Groups represent a group of people who purchase goods and services for resell, new products and daily operations purposes.

Resale Purpose- This include wholesalers and retailers, they purchase these goods and services do not modify them but sell them in order to make profits. These are called Reseller markets

Use in Producing other Products- This include category of Producer markets. They include manufacturing and construction compaines, they buy goods and services for use in producing sellable products to consumers for profit making.

Direct use in General Daily Operations- Those who purchase goods and services for direct use are divided into two categories and they are not for profit making purposes.

  • Government Markets- They buy goods and services through bidding processes and they include state, local and federal governments
  • Institutional Markets- They include religious organisations among other NGOs who purchase goods an services to ensure community benefits.

Read more on Brainly.com - brainly.com/question/14212640#readmore

5 0
3 years ago
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notka56 [123]
What is the question here? 
4 0
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