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Degger [83]
3 years ago
9

You just received a $5,000 gift from your grandmother. You have decided to save this money so that you can gift it to your grand

children 50 years from now. How much additional money will you have to gift to your grandchildren if you can earn an average of 7.5 percent instead of just 7 percent on your savings?
Business
1 answer:
Sphinxa [80]3 years ago
8 0

Answer:

$38,663.61

Explanation:

Given:

Principle amount = $5,000

Duration, n = 50 years

Now,

With interest rate 7.5%

Future value = Principle × ( 1 + r )ⁿ

thus,

Future value = $5,000 × ( 1 + 0.075 )⁵⁰

or

Future value = $185,948.73

With interest rate 7%

Future value = Principle × ( 1 + r )ⁿ

thus,

Future value = $5,000 × ( 1 + 0.07 )⁵⁰

or

Future value = $147285.12

Hence,

The additional amount to be gifted = $147285.12 - $185,948.73

= $38,663.61

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The probability of low demand is estimated to be 0.20. The after-tax net present value of the benefits from purchasing the two m
kondaur [170]

Answer:  a)The decision tree is attached as a document to this question.

b)$140000

Here is the complete question:

. A manager is trying to decide whether to buy one machine or two. If only one is purchased and demand proves to be excessive, the second machine can be purchased later. Some sales will be lost, however, because the lead time for purchasing this type of machine is 6 months. In addition, the cost per machine will be lower if both are purchased at the same time. The probability of low demand is estimated to be 0.20. The after-tax net present value of the benefits from purchasing the two machines together is $90,000 if demand is low and $180,000 if demand is high.

If one machine is purchased and demand is low, the net present value is $120,000. If demand is high, the manager has three options. Doing nothing has a net present value of $120,000; subcontracting, $160,000; and buying the second machines, $140,000.

a. Draw the decision tree for this problem.

b. Use the decision tree to determine how many machines the company should buy initially and give the expected payoff for this alternative.

Explanation:

Concepts and reason

The expected value of perfect information (EVPI)= EPPI - EP

(EPPI) =expected payoff with perfect information

(EP)= maximum expected payoff  computed under uncertainty.

Fundamentals

The expected payoff = P₁X₁ + P₂X₂ +....PnXn,

The formula for the expected payoff is, E(X) = ΣxΡ(x)

Suppose you have a set of corresponding probabilities for playing your pure strategies = Pn

where the probabilities must all be greater than or equal to zero and they all sum to one.

b) the values at node 4 = $120000, $140000 and $160000

EV =maximum(node4)

=max($120000, $140000 , $160000)

=$140000

expected payoff at node 4 = $140000

3 0
2 years ago
Based on predicted production of 21,000 units, a company anticipates $357,000 of fixed costs and $309,750 of variable costs. the
Alinara [238K]
Calculate fixed cost per unit
357,000÷21,000=17 per unit
Fixed cost for 19000 units
17×19,000=323,000

Calculate variable cost per unit
309,750÷21,000=14.75
variable cost for 19000 units
14.75×19,000=280,250

So the answer is
$323,000 fixed and $280,250 variable

Hope it helps!
8 0
2 years ago
Greer Company developed the following data for the current year:
bixtya [17]

Answer:

option (C) is correct.

Explanation:

Given that,

Beginning work in process inventory: $102,000

Direct materials used: 156,000

Actual overhead: 132,000

Overhead applied: 138,000

Cost of goods manufactured: 675,000

Total manufacturing costs: 642,000

Company's direct labor cost for the year:

= Total manufacturing costs - Overhead cost - Direct materials cost

= Total manufacturing costs - Overhead applied - Direct materials used

= $642,000 - $138,000 - $156,000

= $348,000

5 0
2 years ago
On October 1, 2022, Sheridan Company places a new asset into service. The cost of the asset is $81000 with an estimated 5-year l
Ahat [919]

Answer:

the depreciation expense for 2022 is $3,000

Explanation:

Straight line method of depreciation charges a fixed amount of depreciation over the period of use of an asset.

Depreciation Expense = (Cost - Residual Value) / Number of useful life

                                      =  ($81000 - $21000) / 5

                                      =  $12,000

The Annual depreciation charge for this machine will be $12,000 for each of the years that it is used in the business.

However since it was paced in use during the year that is 1 October, we have to apportion the Annual charge withe number of months that its has been in use during 2022.

It has been used for 3 months thus depreciation charge is :

Depreciation = 3/ 12 × $12,000

                      = $3,000

8 0
3 years ago
Mateo has a passion for collecting old watches. He's particularly interested in those from the 1920s because they have a history
hammer [34]

Answer:

D. Authenticity

Explanation: Authenticity describes the genuineness or real nature of something. Mateo wants to ensure that every watch purchases must be those from 1920s and are original. For him,authentic products are his priority and watchword mainly because he has some specific quality connected with the watches manufactured from the 1920s and must be original. Taking the watches to an appraiser is for the appraiser to help in verifying the authenticity of the watches.

4 0
3 years ago
Read 2 more answers
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