Answer:
The money should be invested in bank = $137,639.05
Explanation:
Given annually withdrawal money (annuity ) = $12000
Number of years (n ) = 20 years
Interest rate = 6 percent.
Since a person withdraw money annually for next 20 years with 6 percent interest rate. Now we have to calculate the amount that have been invested in the account today. So below is the calculation for invested money.
![\text{Present value of annuity} = \frac{Annuity [1-(1 + r)^{-n}]}{rate} \\= \frac{12000 [1-(1 + 0.06)^{-20}]}{0.06} \\=12000 \times 11.46992122 \\=137,639.05](https://tex.z-dn.net/?f=%5Ctext%7BPresent%20value%20of%20annuity%7D%20%3D%20%5Cfrac%7BAnnuity%20%5B1-%281%20%2B%20r%29%5E%7B-n%7D%5D%7D%7Brate%7D%20%5C%5C%3D%20%5Cfrac%7B12000%20%5B1-%281%20%2B%200.06%29%5E%7B-20%7D%5D%7D%7B0.06%7D%20%5C%5C%3D12000%20%5Ctimes%2011.46992122%20%5C%5C%3D137%2C639.05)
Answer: 9.31%
Explanation:
The Consumer Price Index (CPI) is able to check the price change per year by pricing a fixed basket of goods in different years. It can be used to calculate inflation with the formula;
Inflation rate = (CPI target year - CPI base year / CPI base year) *100
= 
=9.31%
Answer:
b. do not require customers to enter the service factory.
Explanation:
Possession processing involves tangible services provided on property belonging to a customer. It involves activities like lawn mowing, cleaning services. The property that is recoevong the action must be present but the customer does not need to be.
In people processing on the other hand, the customer is present and services provided are intangible, knowledge based, and customised to each client. For example retail banking services.
Answer:
Had it cut costs and increased its net income by this amount, The ROE would have changed 11.64%.
Explanation:
Old Net profit margin = Net income/ Revenue
= $10,600/$205,000
= 5.170731707%
Old ROE = Net profit margin*Asset turnover*Equity multiplier
= 0.0517*1.33*1.75
= 12.03487805%
New net income = $10,600 + $10,250
= $20,850
New net profit margin = $20,850/$205,000
= 10.17073171%
New ROE = 0.1017*1.33*1.75
= 23.67237805%
Change in ROE = New ROE – Old ROE
= 23.67237805% - 12.03487805%
= 11.6375%
Therefore, Had it cut costs and increased its net income by this amount, The ROE would have changed 11.64%.
Answer:
(1)$42.4 (2)$50.50 (3)$85.32
Explanation:
Solution
Given that:
(1) The current stock price is computed below:
Stock price, P0 = D1÷(r-g)
Where
D₁ = the next dividend expected
r = the return required
g = he growth rate
Thus
= $1.60×(1+6%)/(10%-6%)
$42.4
(2) The formula for the stock price in three years is given below:
Stock price, P3= D4÷(r-g)
Here
D₁ = the next dividend expected
r = the return required
g = he growth rate
= $1.60×[(1+6%)^4]/(10%-6%)
= $50.50
(3) Now we determine the price of the stock in 12 years
P12 = D13÷(r-g)
Here
D₁ = the next dividend expected
r = the return required
g = the growth rate
= $1.60×[(1+6%)^13]/(10%-6%)
= $85.32
