Answer:
the numbers are missing, so I looked for a similar question and found:
<em>Determine which is the better investment: 5.22% compounded semiannually or 5.24% compounded quarterly. Round your answers to 2 decimal places.</em>
- effective interest rate for semiannual compounding = (1 + 5.22%/2)² - 1 = 5.29%
- effective interest rate for quarterly compounding = (1 + 5.24%/4)⁴ - 1 = 5.34%
Compounded quarterly is a better investment than compounded semiannually
Explanation:
The shorter the compounding period, the more interests received (or paid if it is a loan) and the nominal interest rate is the same:
E.g. lets assume that the nominal interest rate is 10% per year:
- effective interest rate for annual compounding = 10%
- effective interest rate for semiannual compounding = (1 + 10%/2)² - 1 = 10.25%
- effective interest rate for quarterly compounding = (1 + 10%/4)⁴ - 1 = 10.38%
- effective interest rate for monthly compounding = (1 + 10%/12)¹² - 1 = 10.47%
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H0P3 It H3LPS :)<span />
Answer:
"Net Present Value" is the right approach.
Explanation:
A method used to determining or calculating the gaps between the current valuation of initial investment as well as the outputs of something like development or possible expenditure is termed as net present value.
The formula which is used to find the NPV is given below:
⇒
here,
- i = Return required
- t = No. of periods
Answer: False
Explanation: The PPC curve is one that illustrates the varying amounts of two products that can be produced when both depend on the same finite resources.
If an economy is operating at a point outside the production possibility curve (PPC) it indicates that the society is producing at an output level that is currently unattainable by its present economy . In other words, it implies growth and that more of both goods indicated by the PPC cannot be produced with the limited resources available.
Answer:
a. incremental cash flows.
Explanation:
Incremental cash flows is a capital budgeting technique used to determine whether to accept or reject the project. Analysis that considers incremental cashflow evaluates the net benefits of accepting the project versus if it is not accepted. This includes incremental revenue or sales, incremental expenses, changes in net working capital. Erosion effects is part of incremental cashflow which happens when a part of regular sales declines due to acceptance of a project.