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lozanna [386]
3 years ago
15

Because testing of nuclear bombs was halted internationally in 1992, the Department of Energy has developed a laser system that

allows engineers to simulate (in a laboratory) conditions in a thermo-nuclear reaction. Due to soaring cost overruns, a congressional committee undertook an investigation and discovered that the estimated development cost of the project increased at an average rate of 2% per six-months over a 5-year period. If the original cost was estimated to be $3.1 billion 5 years ago, what is the expected cost today?
Business
1 answer:
KATRIN_1 [288]3 years ago
5 0

Answer:

The estimated development cost of the project will increase from the original cost of $3.1 billion 5 years ago to $3.7727 billion today.

Explanation:

Data and Calculations:

Original estimated development cost = $3.1 billion

Average rate  of interest = 2% per six months or 4% per year (2 * 2%)

Period of project = 5 years using 4% or 10 using 2%

Using a future value factor of 1.217 from a future value table at 4% per year for 5 years:

The expected cost today = $3.1 billion * 1.217 = $3.7727 billion

Using an online financial calculator:

Results:

FV = $3,778,882,701.98

Total Interest $678,882,701.98

N (# of periods)  10

I/Y (Interest per year)  4

PV (Present Value)  $3,100,000,000

PMT (Periodic Payment)  0

Settings

P/Y (# of periods per year)  2

C/Y (# of times interest compound per year)  2

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A company had net income of $40,000, net sales of $300,000, and average total assets of $200,000. The profit margin and total asset turnover ratio are 13.3% each. 1.5.

There are two methods that can be used to calculate return on assets. The first method is to divide the company's net income by its average total assets. The second method is to multiply the company's net profit margin by sales.

Return on assets is calculated by dividing a company's after-tax earnings by total assets. The balance sheet total corresponds to the company's total equity and liabilities. This value can be found on the company's balance sheet.

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1 year ago
Dr. Ricci gave two examples of excellence in guest service from which organizations?
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The government and the authority’s
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One disadvantage of the corporate form of business ownership is the:
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Answer:

The correct answer is letter "D": double taxation of distributed profits.

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4 0
3 years ago
On october 31, 2009, sky co. borrowed $16 million cash and issued a 7-month, noninterest-bearing note. the loan was made by star
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Answer: Sky's effective interest rate on this loan is 8.39%.

In this question, we assume that interest is compounded annually.

Since Sky issues a non-interest bearing note, Star Finance will deduct 7 months' interest at 8% on the Face Value of the loan and pay the rest as principal to Sky.

Face value of the note            $16 million

Discount Rate p.a                        8%  

Tenure of the note                    7 months

Discount on Note = Face Value * Discount Rate * \frac{Tenure in months}{Months in a year}

Discount on Note = 16 * 0.08 * \frac{7}{12}

Discount on Note = 0.746666667million

[tex]Loan Amount received by Sky = Face Value - Discount on note[/tex]

Loan Amount received by Sky = 16 - 0.746666667

Loan Amount received by Sky = 15.25333333 million

So, Sky pays an interest of 0.746666667 on a sum of 15.25333333  for 7 months. This works out to a seven month interest of:

Seven month Interest Rate = \frac{Interest}{Loan amount}

Seven month Interest Rate = \frac{0.746666667}{15.25333333}

Seven month Interest Rate = 0.048951049

From this we can work out the effective interest rate for Sky as follows:

Sky's Effective Interest Rate = Seven month interest rate * \frac{12}{7}

Sky's Effective Interest Rate = 0.048951049* \frac{12}{7}

Sky's Effective Interest Rate = 0.083916084

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C. the benefits accrue to politically powerful government officials and their constituents

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