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katen-ka-za [31]
3 years ago
12

Suppose that the consumer price index in Eastlandia rises from 150 to 159 over the past year, and that the city sets its car reg

istration prices so that real prices stay the same. If the cost to register a car was $50 last year, how much would it cost this year, in nominal terms?
Business
1 answer:
Mnenie [13.5K]3 years ago
4 0

Answer:

The Nominal Cost to register the car should be $53.

Explanation:

For the first year the data is given as

CPI=150

Nominal Price=$50

Real Income= Nominal Cost / Consumer Price Index

                    =50/150 = 0.33

Now for the second year as the real income is same as previous year thus

RI=0.33

CPI has increase to 159. Now the nominal cost is given as

Nominal Cost=Real Income * Consumer Price Index

Nominal Cost=0.33 * 159

Nominal Cost=$53

So the Nominal Cost to register the car should be $53.

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You have just won the lottery and will receive $460,000 in one year. You will receive payments for 27 years, and the payments wi
Zepler [3.9K]

Answer:

The present Value of my winnings = $4,578,716.35

Explanation:

An annuity is a series od annual cash outflows or inflows which payable or receivable for a certain number of periods. If the annual cash flow is expected  to increase by a certain percentage yearly, it is called a growing annuity.

To work out the the present value of a growing annuity,

we the formula:

PV = A/(r-g) ×  (1-  (1+g/1+r)^n)

I will break out the formula into two parts to make the workings very clear to follow. So applying this formula, we can work out the present value of the growing annuity (winnings) as follows.

A/(r-g)

= 460,000/(12%-3%)

= $5,111,111.11

(1-  (1+g/1+r)^n

1 - (1+3%)/(1+12%)^(27)

=0.8958

PV = A/(r-g) ×  (1-  (1+g/1+r)^n)

$5,111,111.11 × $0.8958

= $4,578,716.35

The present Value of my winnings = $4,578,716.35

5 0
3 years ago
Company X purchased Company Y using financing as follows: $18 million from mortgages, $3 million from retained earnings, $13 mil
ASHA 777 [7]

Answer:

The debt to equity mix = 74.65% - 25.35%

Explanation:

The computation of the debt to equity mix is shown below:

Debt is

= Mortgages + Bond

= $18 + $35

= $53 million

And, the Equity is

= Retained earnings + Cash in hand

= $5 + $13

= $18 million

Now

Percentage of debt financing

= $53 ÷  ($53 + $18)

= 74.65%

And, percentage of equity financing is

= $18 ÷ ($53 + $18)

= 25.35%

And, finally

The debt to equity mix = 74.65% - 25.35%

3 0
3 years ago
Under which circumstances must an employer provide a guardrail?
Arada [10]

Answer:

A, B and D

Explanation:

Under  OSHA laws, employers must provide a safe workplace for the employees. All the danger areas must be indicated with either painting or signage. Using guard rails is an excellent way of demarcating danger zones. They keep employees away from dangerous spots. In this case, an employer should use guard rails in the following circumstances.

1.Around every floor hole into which a worker can accidentally walk. The guard rails will form a barrier that will prevent accidental falls into the hole.

2.Around every open-sided platform, floor, or runaway that is 4 feet or higher off the ground or next level. The guard rails form a wall that prevents employees in raised levels from falling to the ground.

3. Regardless of height, if a worker can fall into dangerous machines or equipment. In case of an incident, the guard rails will stop an employee from falling into dangerous machines or equipment.

8 0
3 years ago
Bond prices and yields Assume that the Financial Management​ Corporation's ​$1 comma 000​-par-value bond has a 7.800 % ​coupon,
Neporo4naja [7]

Answer:

(a) Dollar price of the​ bond = Par value × Current price percentage

                                             = $1,000 × 106.124%

                                             = $1,061.24

(b) Bond's current yield:

Annual interest paid in dollars = Bond par value × Rate of interest

                                                  = $1,000 × 7.8%

                                                  = $78

Current\ yield = \frac{Interest}{Bond\ value}

Current\ yield = \frac{78}{1,061.24}

                              = 0.0734

                              = 7.34%

(c) Issue price of bond is $1,000 and current maturity price is $1,061.24. Thus, bond price is greater than the par value.

(d) Current yield is the return on bond at current price. Yield to maturity is 6.588 % and current yield is 7.34%. Since the current price is more than the par value, therefore, YTM is lower than the current yield.

3 0
3 years ago
In _____, products are made according to customer specifications.
Alisiya [41]
Mass customization (build to order)
4 0
3 years ago
Read 2 more answers
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