Answer: a. $73,810.88
b. $10,185.18
Explanation:
a. The payments of $11,000 are constant so this can be considered an Annuity.
The cost of the Computer is it's present value which is,
Present Value of Annuity = Annuity Payment * Present Value Interest Factor of Annuity, 11%, 10 periods
= 11,000 * 6.71008 (Payment is made at the end of the year so this is an Ordinary Annuity)
= $73,810.88
b. When an Annuity is instead paid at the beginning of the period it is considered to be an Annuity due.
The formula is the same but for the figures ,
Present Value of Annuity Due = Annuity * Present Value Interest Factor of an Annuity Due, 11% , 10 periods
73,810.88 = Annuity * 7.24689
Annuity = 73,810.88/7.24689
= $10,185.18
Answer and Explanation:
a. Here it is reasonable to presume that the treasury bond generates high returns when there is a recession.
b. The calculation of the expected rate of return and the standard deviation for each investment is shown below:
For stocks
= (Expected return of the boom × weightage of boom) + (expected return of the normal economy × weightage of normal economy) + (expected return of the recession × weightage of recession)
= (29% × 0.30) + (18% × 0.50) + (-4% × 0.20)
= 8.7% + 9% - 0.80%
= 16.9%
For bonds
= (Expected return of the boom × weightage of boom) + (expected return of the normal economy × weightage of normal economy) + (expected return of the recession × weightage of recession)
= (6% × 0.30) + (9% × 0.50) + (16% × 0.20)
= 1.8% + 4.5% + 3.2%
= 9.5%
Now the standard deviation calculation is to be shown in the excel spreadsheet
For the stock it is 11.48%
And, for the bond it is 3.5%
c. The investment that should be prefer could be computed by determine the coefficient of variation which is shown below:
Formula i.e. used is
= Standard deviation ÷ expected return
For stock, it is
= 16.9% ÷ 11.48%
= 1.47
And, for bonds it is
= 9.5% ÷ 3.5%
= 2.71
Since for the bonds the coefficient of variation is greater so the same is to be considered
Therefore the bond should be prefer
Answer: introduce more differentiation
Explanation: Product differentiation is a method of using various tactics to make a product stand out from the rest of the similar products sold by a competitor, in an effort to make it more appealing to its customer base. This means differentiating the product so much, that it will make it more attractive for customers to buy. This can be anything from making the product's packaging more aesthetically appealing, including some form of a bonus/gift for purchasing the product (like getting a free toy in each cereal box) etc. In the end by applying product differentiation the one company will increase the customer benefits of purchasing this product from them, hereby gaining a competitive advantage over the other company.
American Marketing Association recognizes the term advertising as – any paid form of non- personal presentation and promotion of ideas, goods and services by an identified sponsor. ... Advertising is a non-personal form of communication because it uses mass media forms.
It is the goal line that is the common term for endline
