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dedylja [7]
3 years ago
8

Ben has ​$2 comma 000 in his savings account and the bank pays an interest rate of 14 percent a year. The inflation rate is 9 pe

rcent a year. The government taxes the interest that Ben earns on his deposit at 10 percent. Calculate the nominal​ after-tax interest rate and the real​ after-tax interest rate that Ben earns.    ​>>> Answer to 1 decimal place. ​>>> If your answer is​ negative, include a minus sign. If your answer is​ positive, do not include a plus sign. The nominal​ after-tax interest rate is nothing percent a year.
Business
1 answer:
Alinara [238K]3 years ago
5 0

Answer: After Tax Nominal Rate - 12.6%

After Tax Real Rate - 3.6%

Explanation:

<em>Real Rate of return is defined as the nominal interest rate less inflation. </em>

The After Tax Real Rate therefore caters for tax from the Nominal rate and then deducts Inflation.

The formula is,

= Nominal Rate( 1 - tax rate) - Inflation rate

= 14% ( 1 - 10% ) - 9%

= 14 ( 90% ) - 9

= 3.6%

The <em>Nominal Rate is simply the Real Rate plus Inflation</em>. The After tax real rate has already being found so the After Tax Nominal Rate is,

= 3.6 + 9

= 12.6%

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Target profit a.are when sales and costs are exactly equal. b.can be calculated by modifying the break-even equation. c.equals d
Irina-Kira [14]

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b. can be calculated by modifying the break-even equation.

Explanation:

As the name implies, target profit can be explained to be the certain amount a business enterprise or a business organisation targets to hit at the end of its sales or at the end of her business dealings.

It can be easily seen in a cash flow planning as it is once modified to approximate cash flow, and also used for revealing expected results to investors and lenders. In all that it is been used for, in the scenario above, it also can be calculated by modifying the break-even equation, and deriving more conservative budgeting packages in business development too.

Adjust the contribution margin per unit and units sold based on an expected sales promotion.

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7 0
3 years ago
The Alford Group had 320,000 shares of common stock outstanding at January 1, 2018. The following activities affected common sha
jeka57 [31]

Answer:

1. $2.5 Per Share

2. $0.9375 per share

3. $1.25

Explanation:

According to the scenario, computation of the given data are as follow:-

1. EPS 2018

Earning Per Share(EPS) = Net Income ÷ Weighted Average Outstanding Share of Common Stock

2018:- Weighted Average Outstanding Share of Common Stock = (320,000 × 12 ÷ 12) - (24,000 × 10÷12) + (24,000 × 2÷ 12) + (96000 × 1÷12)

= 320,000 - 20,000 + 4,000 + 8,000 =312,000 shares

2018 Net Income = $780,000

Earning Per Share ( EPS ) 2018 = $780,000 ÷ 312,000 = $2.5 Per Share

2. 2019 EPS:-

Common Stock Share at the Beginning of 2019 =320,000 - 24,000 + 24,000 + 96,000 = 416,000 shares

2019:- Weighted Average Outstanding Share of Common Stock = 416,000 × 2 = 832,000

2019 Net Income = $780,000

EPS = $780,000 ÷ 832,000 = $0.9375 per share

3. The 2018 EPS Be Presented in 2019 Comparative Financial Statement = Net Income ÷ (Weighted Average Outstanding Shares Of Common Stock For 2018 × Stock) )

= $780,000 ÷ (312,000 × 2)

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= $1.25

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