Answer: $1,203.49
Explanation:
The equal contributions will be an annuity. The $3,500 already there will also grow at 6% for 3 years. Expression is;
8,000 = ( 3,500 * ( 1 + 6%)^3) + Contribution * Future value interest factor of annuity, 3 years, 6%
8,000 = 4,168.56 + Contribution * 3.1836
Contribution = (8,000 - 4,168.56) / 3.1836
Contribution = $1,203.49
Answer:
Lynn will receive $63,754 at the end of 8 years.
Explanation:
Future value is the sum of value of principal invested and compounded return received over the investment period.
Using following formula of future value to calculate the required interest rate.
FV = PV x ( 1 + r )^n
PV = Present value = $40,000
n = number of years = 8 years
r = Interest rate = 6%
FV = Future value = ?
FV = $40,000 x ( 1 + 6% )^8 = $63,754
Answer: The answers are explained below.
Explanation:
• Cost of debt: The cost of debt is the interest rate that a company is charged on its debts. It is the interest paid on bonds, loans etc. The cost of debt is usually the before-tax cost of a debt.
• Cost of equity: The cost of equity is the return a firm pays to its equity investors e.g shareholders in order to reward them for the risk taken by investing their capital. Companies need capital to operate and grow hence, individuals and organizations who provide funds to such companies are rewarded.
• After tax WACC: The Weighted Average Cost of Capital (WACC) is a firm's combined cost of capital including preferred shares, common shares, and debt after the deduction of tax.
• Equity Beta: It measures the sensitivity of the stock price to changes in market. Equity Beta is also called levered beta.
• Asset beta: It is the beta of a firm without the effect of debt. It is a company's volatility of returns without its indebtedness.
• Pure play comparable: The pure play comparable is the taking of the beta estimate of another company that is comparable and in same line of business.
• Certainty equivalent: It is the guaranteed return that an individual would take now, rather than awaiting a higher but uncertain return later in the future.
Answer:
In the context of the external environment of an organization, the task environment: includes the sectors that conduct day-to-day transactions with the organization.
Explanation:
In an organization setting, what is tagged as external environment entails the sectors that transacts with the organization on a day-to-day routine. Their forms of relationship on daily basis makes them to serve as external environment, they could be clients as the case may be.
Answer: $197,600
Explanation: Don Co is making a sale to Cologne GmbH and on the date of the transaction there is an exchange rate called the spot rate. Don Co will record in its books the value of the transaction on the set date at the spot rate which is:
200,000 euros @ .988
= $197,600
on the date of the settlement of the debt by Cologne GmbH, the spot rate is also considered which will be 200,[email protected] .995 = $199,000
Note that on the payment date, the exchange rate has gone up and now Don Co has a higher receivable value that what is in its book.
the difference of $1,400 ($199,000-$197,600) will now be noted in the books of Don Co as an exchange gain on the transaction.
