Answer
The answer and procedures of the exercise are attached in the following archives.
Explanation
You will find the procedures, formulas or necessary explanations in the archive attached below. If you have any question ask and I will aclare your doubts kindly.
Warby Parker can offer cheaper glasses than their competition because they <span>use the same materials and factories as Luxottica without the licensing fees.</span>
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Answer:
* The present value (at age 30) of retirement savings is $46,982.
* Amount expect when retiring: $959,089.
Explanation:
* The present value (at age 30) of retirement savings:
The contribution that is made on the 31st birthday = 31 years old salary * 8% = 30 years old salary * 1.04 * 8% = 35,000 * 1.04 * 8% = $2,912.
We apply the formula for calculating the present value of growing annuity to determine the present value of retirement savings at age 30:
[2,912 / ( 9% - 4%)] * [ 1 - [(1+4%)/(1+9%)]^35 ] = $46,982.
* Amount expect when retiring:
We apply the formula for calculating the future value of growing annuity to determine the future value of retirement savings at age 65:
[2,912/ (9% - 4%) ] * [ 1.09^35 - 1.04^35 ] = $959,089
Option C -Operating Cash Flow = Current Liabilities / Operating Cash Flow s not a correct way of calculating a liquidity ratio.
Liquidity ratios are a measure of a company's ability to settle its short-term payments. A company has the ability to quickly exchange its revenues and is using them to pay his obligations is dictated by its liquidity ratios. The potential to pay back debts and keep engaged on installments is simpler the better the ratio. Since this can vary by industry, and current ratio of 1.0 usually signals that a group's debt do not exceeding its liquid assets. In enterprises in which there is a quicker product changeover and/or shorter payment cycles, ratings below 1.0 may be acceptable.
Absolute liquidity ratio =(Cash + Marketable Securities)÷ Current Liability.
Learn more about Liquidity ratios here:
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