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Feliz [49]
3 years ago
10

An investment offers a total return of 11 percent over the coming year. Alex Hamilton thinks the total real return on this inves

tment will be only 7.9 percent. What does Alex believe the inflation rate will be over the next year
Business
1 answer:
Ahat [919]3 years ago
8 0

Answer:

2.87%.

Explanation:

The total return, also refer to as Nominal return or Money return, is based on the nominal interest rate. For example, let's say that you deposited $100 into a bank account and the bank offers you an annual return of 11%. This 11% is the stated interest rate, it is known as nominal interest rate, and it is rate before taking into account the effect of inflation. When we deduct the effect of inflation from nominal rate, it gives us the real rate. Real rate reflects the Purchasing Power. The Fisher equation will be used to determine the expected inflation rate. The Fisher equation is as follows:

                                            (1 + i ) = (1 + r) * (1 + h)

where

i = Nominal (Money) rate

r = Real rate

h = Inflation rate

Simply adjust the equation to calculate the inflation rate;

⇒ h = [(1 + i) / (1 + r)] - 1

OR h = [(1 + .11) / (1 + .079)] - 1 = 2.87%.

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Explanation:

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2 years ago
Berkshire Inc. uses a periodic inventory system. At the end of 2017, it missed counting some inventory items, resulting in an in
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Answer:

d. Assets understated by $670.000, liabilities understated by $234,500 and shareholders' equity understated by $435,500

Explanation:

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3 years ago
Una empresa con fecha 01/05 tiene unas existencias iniciales de 100 unidas de productos a un precio de 5€/ud. Realiza una compra
laila [671]

Answer:

FIFO 480 euros

LIFO 400 euros

PMP 460 euros

Explanation:

Unidades disponibles:

100 existencia inicial

300 compra

FIFO

Primero se venden las unidades de existencia inicial y luego las de la compra:

100 existencia inicial y 220 de la compra.

Inventario final: 80 unidades a 6 euros cada una = 480 euros

LIFO se vende primero la compra:

300 de compra y 20 de existencia inicial

Inventario final 80 unidades a 5 euros cada una = 400 euros

Costo Promedio Ponderado:

100 unidades a 5 + 300 a 6 = 500 + 1800 = 2300 euros

400 unidades costaron 2300 euros

en promedio: 2300 / 400 = 5.75

inventario final 80 unidades a 5.75 = 460 euros

5 0
3 years ago
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Inside. 

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4 0
3 years ago
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