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Answer: The difference in the two future values is $2703.79.
We arrive at the answer at follows:
We need to find the future value of these investments.
<h3><u>
A. First investment Plan</u></h3>
We have
Principal $25,000
Interest rate per year (i) 12%
No. of years (n) 7
No. of compounding periods per year (m) 12 (monthly)
We can compute the Future Value (FV) of this investment with the following formula:
Substituting the relevant values in the formula above we get,
<h3>B<u>
. Second investment Plan</u></h3>
We have
Principal $25,000
Interest rate per year (i) 13%
No. of years (n) 7 No. of compounding periods per year (m) 2 (semi-annual)
We can compute the Future Value (FV) of this investment with the following formula:
Substituting the relevant values in the formula above we get,
<h3><u>C. Difference between the two Future values</u></h3>
Answer:
NPV = $-41,928.18
Explanation:
Net present value is the present value of after tax cash flows from an investment less the amount invested.
NPV can be calculated using a financial calculator:
Cash flow in year 0 = $-300,000
Cash flow each year from year 1 to 10 = $42,000
I = 10%
NPV = $-41,928.18
To find the NPV using a financial calacutor:
1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.
2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.
3. Press compute
I hope my answer helps you
Answer:
$4,110 and 12.08%
Explanation:
The computation of the dollar return and the percent return is shown below:
Dollar Return = (Ending Value − Beginning Value) + Income earned
where,
Ending value is
= $126.69 × 300 shares
= $38,007
Beginning value is
= $113.39 × 300 shares
= $34,017
And, the income earned is
= Dividend per share paid × number of shares owed
= $0.40 × 300 shares
= $120
So, the dollar return is
= $38,007 - $34,017 + $120
= $4,110
And, the percentage return is
= (Dollar return ÷ Beginning value) × 100
= ($4,110 ÷ $34,017) × 100
= 12.08%
Answer: $12,000
Explanation:
Given that,
Jessica is a 25% partner in the JRL Partnership
Cash received = $40,000
Jessica's partnership interest (basis) = $28,000
JRL has no hot assets or liabilities
Capital Gain on Distribution = Total Amount Received - Basis in Firm + Liability in Partnership
= $40,000 - $28,000 + $0
= $12,000
Therefore, $12,000 is the amount and character of Jessica's gain from the distribution.