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Sedbober [7]
3 years ago
10

Compute the present value of $700 paid in three years using the following discount rates: 5 percent in the first year, 6 percent

in the second year, and 7 percent in the third year.
Business
1 answer:
Aneli [31]3 years ago
5 0

Answer:

$587.79

Explanation:

Data provided in the question

Amount paid in three years = $700

Discount rate in the first year = 5%

Discount rate in the second year = 6%

Discount rate in the third year = 7%

So by considering the above information, the present value is

= (Amount paid in three years) ÷ (1 + Discount rate in the first year × 1 + Discount rate in the second year × 1 + Discount rate in the third year)

=  ($700) ÷ (1 + 0.05 × 1 + 0.06 × 1 + 0.07)

= ($700) ÷ (1.05 × 1.06 × 1.07)

= $700 ÷ 1.19091

= $587.79

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Investment Management Inc. (IMI) uses the capital market line to make asset allocation recommendations. IMI derives the
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Explanation:

Capital Market Line (CML)

Expected return on the market portfolio, E(r_m) = 12 %

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Risk-free rate, r_f = 5%

E(r_c) =  r_f + [  E(r_p)  - r_f ] × ( σ_c ÷ σ_p)

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3 years ago
Chuck Wagon Grills, Inc., makes a single product—a handmade specialty barbecue grill that it sells for $215. Data for last year’
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Answer:

Instructions are listed below

Explanation:

Giving the following information:

Selling price= $215

Units in beginning inventory 0

Units produced 9,800

Units sold 9,300

Units in ending inventory 500

Variable costs per unit:

Direct materials $ 61

Direct labor 33

Variable manufacturing overhead 10

Variable selling and administrative 15

Total variable cost per unit $ 119

Fixed costs:

Fixed manufacturing overhead $ 274,400

Fixed selling and administrative 510,000

Total fixed costs $ 784,400

Absorption costing includes fixed manufacturing overhead in the cost per unit.

A) Unitary fixed manufacturing overhead= 274,400/9800 units= $28

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Unitary cost= 61 + 33 + 10 + 28= $132

B) Income statement:

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COGS= 132*9300=$1,227,600

Gross profit= $771,900

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4 0
3 years ago
Tucker's Trucking is considering a project with a discounted payback period just equal to the project's life. The projections in
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Answer:

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x = 8845 units

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Answer:

leader accepts failure and gains experience from it

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solution

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