I was going to say it's B, but I can also see A being the right answer.
Answer:
The two accounts will have the same balance after 41.8 years
Explanation:
Hi, first, let´s intruduce the mathematical expression for the future value of each investment.
$2,000 compounded continously
$11,000 at 4% compounded annually (equivalent to effective annual)
Since the problem is asking when the future value of both investment will reach an equal amount of money, we solve for "t" the resulting expression:
So, this 2 accounts will need 41.8 years to equal their balance. You can check your result by substituting "t" in both equations, they must have the same future value.
Best of luck.
Answer:
The correct answer would be, Knowledge Worker. Edgar can be considered a Knowledge Worker.
Explanation:
A knowledge worker is a person who is skilled in handling and using the information.
So because Edgar is a Chef in a restaurant and he is also the kitchen manager, It shows his expertise in both culinary and restaurant management fields. He is expert in Cooking as a chef, and is well skilled in managing the kitchen as well. He is technically equipped with management skills in restaurant field. So Edgar is considered a Knowledge Worker.
Answer:
You must donate $50,000.
Explanation:
Giving the following information:
You want to endow a scholarship that will pay $5,000 per year forever.
The school's endowment discount rate is 10 %
We need to find the present value of a perpetual annuity. We will use the following formula:
PV= Cf/ i
Cf= cash flow= 5,000
PV= 5,000/0.10= $50,000
You must donate $50,000.
Answer:
The correct answer is letter "A": Using accelerated depreciation rather than straight line would normally have no effect on a project's total projected cash flows but it would affect the timing of the cash flows and thus the NPV.
Explanation:
Accelerated depreciation is a form of accounting and taxation used in the first years of an asset to allow greater deductions. On the other hand, the deductions are distributed evenly throughout the life of the asset using the Straight-line Depreciation method. Accelerated depreciation facilitates higher expenses to be incurred during the first years of an asset while in use, and lower expenses years later, as long as the asset depreciates.
In that sense, when it comes to the total projected cash flow of a company on a project, neither the accelerated depreciation or the straight-line method would affect it but both of them have impact on the timing of the cash flows since accelerated depreciation demands higher expenses since the beginning of the possession of the assets while the straight-line method keeps the expenses steady. Both, also affect the net present value (NPV) of the company since with the accelerated depreciation the cash flow will be less and with the straight-line method it should be constant.