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3 years ago

If rosa expects interest rates to fall for the next 10 years she should invest her money in

1 answer:

nataly862011 [7]3 years ago

3 0

The answer is d. treasury bills

Treasury bills yielding no interest but you can get it at a discounted price.

Let's say you just have to pay $ 90,000 for $ 100,000 ten years investment. It means you will gain 10,000 after 10 years eventhough the interest rates fall

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Krell Industries has a share price of $ 21.05 today. If Krell is expected to pay a dividend of $ 0.89 this year and its stock pr

V125BC [204]

Answer:

Krell's dividend yield and equity cost of capital are 4.23% and 19.95%

Explanation:

Dividend yield = expected dividend/price today

= $ 0.89/$ 21.05

= 4.23%

Equity cost of capital = (Ending share price - Initial price + Dividend per share) / Initial price * 100

= [($24.36 - $21.05 + 0.89)/$21.05]*100

= 19.95%

Therefore, Krell's dividend yield and equity cost of capital are 4.23% and 19.95%

3 0

3 years ago

What is the basic equation of an income statement? Select one: a. Assets = Revenues – Expenses b. Net income or loss = Revenues

Mashutka [201]

Answer:

c. Assets = Liabilities + Equity

Explanation:

Assets = Liabilities + shareholders equity is also known as the balance sheet equation.

It is the basis for the double-entry bookkeeping system

7 0

3 years ago

Jim is evaluating project that will pay him $5,000 per year for 5 years, and then cost him $4,000 per year for 12 years. Jim’s o

FinnZ [79.3K]

Answer:

4.25%

Explanation:

We need to calculate the net present value of the cash flows to determine the IRR.

NPV = PV of Cash inflows - PV of Cash outflows

As the cash inflow and outflow are fixed for specific period of time so, we will use the annuity formula to calculate the NPV.

NPV = [ $5,000 x ( 1 - ( 1 + 18% )^-5) /18% ] - [ ( $4,000 x ( 1 - ( 1 + 18% )^-12) /18%) x ( 1 + 18%)^-6 ]

NPV = $15,636 - $7,102 = $8,534

We need NPV on a higher rate of 10%

NPV = [ $5,000 x ( 1 - ( 1 + 10% )^-5) /10% ] - [ ( $4,000 x ( 1 - ( 1 + 10% )^-12) /10%) x ( 1 + 10%)^-6 ]

NPV = $18,954 - $15,385 = $3,569

IRR = Lower rate + [ Lower rate NPV / (Lower rate NPV - Higher rate NPV) ] (higher rate - lower rate)

IRR = 10% + [ 3,569 / ($3,569 - $8,534) ] (18% - 10%)

IRR = 4.25%

4 0

4 years ago

Assume a consumer can buy two goods, A and B, and that the prices are Pa and Pb respectively. The marginal utility of A is MUa a

Veseljchak [2.6K]

Answer:

Explanation:

The Utility Maximization Rule is

MUa/Pa = MUb/Pb, where MUa represents the marginal utility derived from good a, Pa represents the price of good a, MUb represents the marginal utility of good b and Pb represents the price of good b.

7 0

4 years ago

Aunt Mabel promised to give you $9000 when you successfully complete your freshman year, $6000 when you successfully complete yo

Blababa [14]

Solution :

At every stage the formula used will be :

$\frac{\text{available balance}}{(1+\text{interest rate})}= \text{required bank balance}$