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Korolek [52]
3 years ago
15

Bo decides to establish a fund that it will use 10 years from now to replace an aging production facility. The company will make

a $100,000 initial contribution to the fund and plans to make quarterly contributions of $50,000 beginning in three months. The fund earns 12%, compounded quarterly. What will be the value of the fund 10 years from now
Business
1 answer:
aev [14]3 years ago
4 0

Answer: $4,096,266.76

Explanation:

First find the value of the initial $100,000 ten years into the future.

Rate = 12% / 4 = 3% quarterly

Period = 10 * 4 = 40 quarterly periods

= 100,000 * (1 + 3%)⁴⁰

= $326,203.78

This will be added to the future value of the $50,000 annuity.

Future value of annuity = Annity * ( ( 1 + rate)^number of periods - 1) / rate

= 50,000 * ( ( 1 + 3%) ⁴⁰ - 1) / 3%

= $3,770,062.99

Add both future values:

= 3,770,062.99 + 326,203.78

= $4,096,266.76

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You are a shareholder in an S corporation. The corporation earns $2.31 per share before taxes. As a pass-through entity, you wil
geniusboy [140]

Answer:

$1.50

Explanation:

Calculation for How much per share is left for you after all taxes are paid

Using this formula

Amount per share left= Amount per share-(Amount per share× marginal tax rate

Let plug in the formula

Amount per share left=$2.31-($2.31×35%)

Amount per share left=$2.31-0.8085

Amount per share left=$1.50

Therefore How much per share is left for you after all taxes are paid will be $1.50

6 0
3 years ago
Charisma, Inc., has debt outstanding with a face value of $5.5 million. The value of the firm if it were entirely financed by eq
rjkz [21]

Answer:

$0.69 million or $690,000

Explanation:

Value of Firm Vₐ = $24.7 million

Debt D = $5.5 million

Shares S = 390,000 * 51 = $19.89 million

Therefore Value Vₓ = 5.5 + 19.89 = $25.39 million

We would expect Vₐ and Vₓ to be the same value. Therefore the decrease in the value of the company due to expected bankruptcy costs is

= $25.39 million - $24.7 million

= $0.69 million

3 0
3 years ago
Simpleton, Inc. budgeted a material cost of $10 per lb. They ended up purchasing 2,300 lbs at $16 per lb. and using 1,800 lbs fo
Vesna [10]

Answer:

Direct material price variance= $13,800 unfavorable

Explanation:

Giving the following information:

Simpleton, Inc. budgeted a material cost of $10 per lb.

Actual:

2,300 lbs at $16 per lb.

<u>To calculate the direct material price variance, we need to use the following formula:</u>

<u></u>

Direct material price variance= (standard price - actual price)*actual quantity

Direct material price variance= (10 - 16)*2,300

Direct material price variance= $13,800 unfavorable

4 0
4 years ago
The primary difference between a change in supply and a change in the quantity supplied is: Select an answer and submit. For key
kipiarov [429]

Answer:

D

Explanation:

A change in quantity supplied is as a result of a change in the price of the good. This change in the price leads to a movement along the supply curve. If price increases, there is an upward movement up along the supply curve and if there is a decrease in price, there is a movement down the demand curve.

A change in supply is caused by other factors other than price. Some of these factors include :

  • A change in the number of suppliers
  • The cost in the price of raw materials needed in the production of the good.

A change in supply leads to a movement outward or inward

3 0
3 years ago
A closed economy has income of $1,500 billion, government spending of $260 billion, taxes of $180 billion, and investment spendi
Vikentia [17]

Answer:

(i) $940 billion

(ii) $380 billion

(iii) -$80 billion

(iv) $300 billion

Explanation:

Income, Y = $1,500 billion

Government spending, G = $260 billion

Taxes, T = $180 billion,

Investment spending, I = $300 billion

As Y = C + G + I

Consumption spending, C = $1,500 - $260 - $300

                                            = $940 billion

Private savings = Y - T - C

                          = $1,500 - $180 - $940

                          = $380 billion

Public saving = T - G

                      = $180 - $260

                      = -$80 billion

National saving = private + public

                          = $380 - $80

                          = $300 billion

5 0
3 years ago
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