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sergeinik [125]
3 years ago
12

The classical dichotomy is the separation of real and nominal variables. The following questions test your understanding of this

distinction.
Rina spends all of her money on paperback novels and donuts. In 2009 she earned $14.00 per hour, the price of a paperback novel was $7.00, and the price of a donut was $2.00.

1: Which of the following give the nominal value of a variable? Check all that apply.
A) The price of a donut is $2.00 in 2009.
B) Rina's wage is $14.00 per hour in 2009.
C) Rina's wage is 2 paperback novels per hour in 2009.
Business
1 answer:
mylen [45]3 years ago
7 0

Answer:

A) The price of a donut is $2.00 in 2009.

B) Rina's wage is $14.00 per hour in 2009.

Explanation:

The nominal value of a variable is its monetary amount, in this case, in dollars which is susceptible to currency fluctuations and inflation. Therefore, statements A and B present the nominal value of a variable.

When valuing a variable as an exchange for another good, that is assigning a real value to that variable since monetary changes won't affect the relationship between two goods.

The answers are A) and B)

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How might a person’s place in the life cycle influence investment decisions?
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3 years ago
Reuben would like to buy a car that costs $25,000 today when he graduates from college in 5 years. If the rate of inflation is e
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The future value of the car that costs $25,000 today in 5 years at an inflation rate of 3% per year is <u>$28,981.85.</u>

<h3>What is the future value?</h3>

The future value shows the value that a present value will be in a future period, given the time value of money concept.

The future value can be computed using the future value formula, future value table, or an online finance calculator as below.

<h3>Data and Calculations:</h3>

Price of a car today = $25,000

Period to buy the car = 5 years

Inflation rate per year = 3%

Future value factor of 3% for 5 years = 1.159

Future price of the car in 5 years' time = $28,975 ($25,000 x 1.159)

N (# of periods) = 5 years

I/Y (Interest per year) = 3%

PV (Present Value) = $25,000

PMT (Periodic Payment) = $0

<u>Results:</u>

FV = $28,981.85

Total Interest $3,981.85

Thus, the future value of the car that costs $25,000 today in 5 years at an inflation rate of 3% per year is <u>$28,981.85.</u>

Learn more about future value computations at brainly.com/question/989421

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Companies with residual dividend policies priorities paying capital expenditures out of earnings.

<h3>What is payout ratio?</h3>

The payout ratio, which is calculated as a percentage of the firm's total earnings, demonstrates the part of earnings that a company distributes to its shareholders in the form of dividends. By dividing the total dividends given out by the net income made, the computation is arrived at.

For dividend investors, the dividend payout ratio is a crucial indicator. It demonstrates how much of a company's earnings are distributed to investors. The higher that number, the less cash a corporation has left over to fund dividend growth and corporate expansion.

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