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Verizon [17]
3 years ago
8

David and Bella started a new company and decided that the net profit will be divided in a 6:7 ratio respectively. At the end of

first month, they got a profit of $390. What is the amount that David got after the first month?
Business
1 answer:
Musya8 [376]3 years ago
8 0

Answer:

$180      

Explanation:

Data provided in the question

Net profit earned = $390

And the given ratio is 6:7

So, the amount that David got would be

= Net profit earned × David ratio ÷ total company ratio

where,

Net profit earned = $390

David ratio = 6

Total company ratio is = 6 + 7 = 13

So, the David share is

= $390 × 6 ÷ 13

= $180            

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In need of extra​ cash, Troy and Lily decide to withdraw ​$2 comma 100 from their traditional IRA. They are both 40 years old. T
krek1111 [17]

Answer:

Calculate the tax consequence of withdrawal from retirement account.

T and L are 40 years old and decide to withdraw $2,100 from their IRA. They lie in a 35% marginal tax bracket.

Analysis

They are withdrawing some amount from their retirement fund. They have to pay the tax and penalty for early withdrawals from the retirement fund. The withdrawal amount is $2,100 so they have to pay tax on it. The tax rate will be 35% which is their marginal tax bracket.

Calculation of tax consequences if withdrawal amount is $2,100:

Ordinary income tax amount calculates by multiplying the withdrawal amount with the ordinary tax rate.

= $2100 × 35%

= $735

The withdrawal amount attracts the 10% penalty. So, the penalty amount is calculated as follows: Penalty on withdrawn funds calculates by multiplying the withdrawn funds with the percentage of penalty.

= $2100 × 10%

= $210

(NOTE: - T and L have to pay ordinary income tax along with the penalty on their withdrawal because they are withdrawing funds from their IRA before age 59.5.)

Total expenses include the tax amount and penalty charge on withdrawal amount. So, it is calculated as follows:

Total expenses =$735 + $210

Total expenses = $945

Conclusion

Therefore, T and L would incur a tax of $945 on their withdrawal. This $945 is the sum of income tax amount and penalty on withdrawal balance.

8 0
2 years ago
f interest rate parity (IRP) exists, then triangular arbitrage will not be possible. A. true. B. false.
Levart [38]

Answer:

A. True

Explanation:

Arbitrage refers to a situation wherein a gain is made owing to price discrepancy or unevenness in two markets. The rule for arbitrage is to buy from the markets where price is less and sell in the markets where price is higher.

Triangular arbitrage occurs wherein 3 different currencies are involved and the exchange rates are not uniform i.e a discrepancy exists and interest rate parity does not hold true.

Interest rate parity refers to the concept wherein the disparity between two currency exchange rates is adjusted by the respective interest rates of the two countries. When interest rate parity exists, no arbitrage is possible as markets are fairly priced.

3 0
3 years ago
Stratford Company purchased a machine with an estimated useful life of seven years. The machine will generate cash inflows of $9
Amiraneli [1.4K]

Answer:

The price o the machine is = $268,157.69

Explanation:

<em>The Net present value is the difference between the present value (PV) cash inflows and the initial cost of the investment.</em>

<em>PV of cash inflow =</em>

90,000× (1- (1.1)^(-7) )/0.1

=  438,157.69

NPV = PV of cash inflow - cost of the machine

<em>Let represent cost of the machine as " y "</em>

170,000 =  438,157.69  - y

y = 438,157.69- 170,000

y =  268,157.69

The price o the machine is = $268,157.69

4 0
3 years ago
Fran Smith has two investment opportunities. The interest rate for both investments is 20%. Interest on the first investment wil
RoseWind [281]

Answer:

Fran should choose that which compounds quarterly

Explanation:

In Compound Interest investment, the interest at the end of the compounding period is added to form a new base capital.

If this is done every 3 months, the principal at the beginning of each quarter increases while in annual compounding, the interest is added at the end of the year.

Generally, for investment, the more frequent is it compounded the better. On the other hand, less frequent compounding is preferred for borrowers.

5 0
3 years ago
Find the duration of a bond with a settlement date of May 27, 2020, and maturity date November 15, 2031. The coupon rate of the
andre [41]

Answer:

Explanation:

Duration is used to determine a bond's price sensitivity to interest rate changes. For fixed rate bonds, an increase in market interest rates leads to a decrease in the price of a bond. On the other hand, a decrease in market interest rates leads to an increase in the price of a bond. The longer the duration, the greater the swings in a bond price for a given change in interest rates. There are various types of duration. Two well-known types used for straight bonds (i.e., bonds without embedded options) are Macauley Duration and Modified Duration. Macauley duration is the weighted average of the time until cash flow dates, where the weights are given by the fraction of the present value arising from that period's cash flow. Modified Duration is derived from Macauley Duration.

Answer and Explanation:

The formula used to calculate Macauley Duration is shown below:

{eq}Duration = t_1 * \frac{c * d(t_1)}{PV} + t_2 * \frac{c * d(t_2)}{PV} + ...

5 0
3 years ago
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