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goldfiish [28.3K]
2 years ago
10

Jonathon saves $4,000 at the end of each quarter for 10 years. Assume 12% compounded quarterly and find the present value.

Mathematics
1 answer:
charle [14.2K]2 years ago
5 0

Answer:

Results are below.

Step-by-step explanation:

1. <u>First, we need to calculate the Future Value:</u>

FV= {A*[(1+i)^n-1]}/i

A= quarterly deposit

n= 10*4= 40

i= 0.12/4= 0.03

FV= {4,000*[(1.03^40) - 1]} / 0.03

FV= $301,605.04

Now, the present value:

PV= FV/(1+i)^N

PV= 301,605.04/(1.03^40)

PV= $92,459.09

2. <u>First, we need to calculate the value of the first year of college:</u>

FV= PV*(1+i)^n

FV= 24,000*(1.04^3)

FV= $26,996.74

Now, the quarterly payments:

FV= {A*[(1+i)^n-1]}/i

A= quarterly deposit

Isolating A:

A= (FV*i)/{[(1+i)^n]-1}

i= 0.08/4= 0.02

n= 3*4= 12

A= (26,996.74*0.02) / [(1.02^12) - 1]

A= $2,012.87

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Answer:

Step-by-step explanation:

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3 years ago
A stick has a length of $5$ units. The stick is then broken at two points, chosen at random. What is the probability that all th
Zinaida [17]

Answer:

4/25 = 0.16

Step-by-step explanation:

The shortest stick must be between 0 and 5/3.  The probability that it is longer than 1 is therefore:

(5/3 − 1) / (5/3 − 0)

(2/3) / (5/3)

2/5

So the probability that both of the shortest sticks are longer than 1 is (2/5)² = 4/25.

4 0
3 years ago
Ghost, Inc., has no debt outstanding and a total market value of $369,600. Earnings before interest and taxes, EBIT, are project
arlik [135]

Answer:

Ghost Inc.

A1.

Earnings Per share (EPS)

EPS in normal projection is $4.61 per share

EPS in an expansion is $5.31 Per share

EPS in a recession is $3.51 Per share

A2.

Changes to EPS in an expansion is +15.18%

Changes to EPS in a recession is -23.86%

B1.

Earnings Per share (EPS)

EPS in normal projection is $7.23 per share

EPS in an expansion is $8.62 Per share

EPS in a recession is $5.01 Per share

B2.

Changes to EPS in an expansion is +19.23%

Changes to EPS in a recession is -30.71%

Step-by-step explanation:

<u>Underlying Information:</u>

Earnings before interest and taxes, EBIT projections = $51,000

Expansionary EBIT projections = $51,000 x (100% + 15%) = $58,650

Recessionary EBIT projections = $51,000 x (100% -24%) = $38,760

Tax Rate = 24%

Market to Book Ratio = 1.0

Stock Price is constant.

Solution to A1.

<u>Scenario 1 (Projected Earnings)</u>

Earnings Per Share (EPS) = Net Income (Earnings after Tax) divided by Outstanding Shares in Issue

Net Income = EBIT minus tax = $51,000 - ($51,000 x 24%)

                                                 = $51,000 - $12240

                                                 = $38,760

Outstanding shares in issue = 8,400 ordinary Shares

EPS = $38,760 divided by 8,400 shares = $4.61 Per share

<u>Scenario 2 (Projected Earnings in a strong expansion)</u>

Earnings Per Share (EPS) = Net Income (Earnings after Tax) divided by Outstanding Shares in Issue

Net Income = EBIT minus tax = $58,650 - ($58,650 x 24%)

                                                 = $58,650 - $14,076

                                                 = $44,574

Outstanding shares in issue = 8,400 ordinary Shares

EPS = $44,574 divided by 8,400 shares = $5.31 Per share

<u>Scenario 3 (Projected Earnings in a Recession)</u>

Earnings Per Share (EPS) = Net Income (Earnings after Tax) divided by Outstanding Shares in Issue

Net Income = EBIT minus tax = $38,760 - ($38,760 x 24%)

                                                 = $38,760 - $9,302.4

                                                 = $29,457.6

Outstanding shares in issue = 8,400 ordinary Shares

EPS = $44,574 divided by 8,400 shares = $3.51 Per share

Solution to A2.

1.Changes to EPS in an expansion = EPS (Expansion) minus EPS (normal projection), all divided by EPS (normal projection)

= (5.31 - 4.61) / 4.61

= +15.18% change during an expansion

2.Changes to EPS in a recession = EPS (Recession) minus EPS (normal projection), all divided by EPS (normal projection)

= (3.51 - 4.61) / 4.61

= -23.86% change during a recession

<u>Underlying Information:</u>

Debt issue = $185,000

Interest on debt issued = 6% = $11,100

Market to Book Ratio = 1.0

Stock Price is constant.

Therefore Share Price  = Market Value divided by Outstanding shares in issue = 369,600 / 8400 = $44

This implies our proceeds of $185,000 from debt issue would have repurchased $185,000 divided by $44 = 4,205 ordinary shares

This decision to repurchase its shares indicates the shares outstanding will reduce by 4,205. New outstanding shares will now be 4,195 shares

*Earnings before interest and taxes, EBIT normal projections  = $51,000 & Earnings Before Tax  (EBT) = $51,000 minus $11,100 (debt interest) =  $39,900

*Expansionary EBIT projections = $51,000 x (100% + 15%) = $58,650 & Earnings Before Tax = $58,650 minus $11,100 (debt interest) =  $47,550

*Recessionary EBIT projections = $51,000 x (100% -24%) = $38,760 & Earnings Before Tax = $38,760 minus $11,100 (debt interest) =  $27,660

Tax Rate = 24%

Solution to B1.

<u>Scenario 1 (Projected Earnings)</u>

Earnings Per Share (EPS) = Net Income (Earnings after Tax) divided by Outstanding Shares in Issue

Net Income = EBT minus tax = $39,900 - ($39,900 x 24%)

                                                 = $39,900 - $9,576

                                                 = $30,324

Outstanding shares in issue = 4,195 ordinary Shares

EPS = $30,324 divided by 4,195 shares = $7.23 Per share

<u>Scenario 2 (Projected Earnings in a strong expansion)</u>

Earnings Per Share (EPS) = Net Income (Earnings after Tax) divided by Outstanding Shares in Issue

Net Income = EBT minus tax = $47,550 - ($47,550 x 24%)

                                                 = $47,550 - $11,412

                                                 = $36,138

Outstanding shares in issue = 4,195 ordinary Shares

EPS = $36,138 divided by 4,195 shares = $8.62 Per share

<u>Scenario 3 (Projected Earnings in a Recession)</u>

Earnings Per Share (EPS) = Net Income (Earnings after Tax) divided by Outstanding Shares in Issue

Net Income = EBT minus tax = $27,660 - ($27,660 x 24%)

                                                 = $27,660 - $6,638.40

                                                 = $21,021.60

Outstanding shares in issue = 4,195 ordinary Shares

EPS = $21,021.60 divided by 4,195 shares = $5.01 Per share

Solution to B2.

1.Changes to EPS in an expansion = EPS (Expansion) minus EPS (normal projection), all divided by EPS (normal projection)

= (8.62 - 7.23) / 7.23

= +19.23% change during an expansion

2.Changes to EPS in a recession = EPS (Recession) minus EPS (normal projection), all divided by EPS (normal projection)

= (5.01 - 7.23) / 7.23

= -30.71% change during a recession

6 0
2 years ago
The answer to c plz
NikAS [45]

Answer:

≈ 30.63 cm²

Step-by-step explanation:

The shaded area is calculated by subtracting the area of the inner circle from the area of the outer circle.

outer circle has radius = 8 ÷ 2 = 4 and inner circle has radius = 5 ÷ 2 = 2.5

shaded area = πr₁² - πr₂² (r₁ is outer and r₂ is inner )

A = π (4² - 2.5²)

   = π(16 - 6.25) = 9.75π ≈ 30.63 cm²

           

5 0
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