Answer:
19.84 years
Explanation:
Number of years = in ( fv / pv) / r
FV = future value
PV = present value
r = interest rate
IN(207000 / 57000) / 0.065
IN (3.631579) / 0.065 = 19.84
Answer:
C) The Fed can increase the equilibrium federal funds rate by decreasing the supply of reserves.
Explanation:
The Federal fund rate is the interest rate at which the banks use to lend money to each other overnight. It can simply be called the interest rate for interbank reserve loans. It can also be the interest rate which is used to conduct monetary policies.
Here, money demanded is equal to the amount of money supplied. The Fed can change the equilibrum funds rate by decreasing the money supplied to the banks, which in turn, makes the federal fund demand increase and the federal also fund rate increases.
Answer:
$43,294.77
Explanation:
Here is the full question used in answering this quetion :
You win a lottery that pays $10,000 each year for the next 5 years beginning next year. How much are your winnings worth today if the market interest rate is 5%?
Present value is the sum of discounted cash flows
PV can be calculated with a financial calculator
Cash flow in year 1 - 5 = $10,000
i = 5%
PV = $43,294.77
To find the PV using a financial calculator:
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
You are considering an investment for which you require a 14 percent rate of return. the investment costs $61,900 and will produce cash inflows of $26,000for three years.You should not accept this project based on its internal rate of return, because the IRR is 12.51 percent
Answer:
b. Useful to capital providers.
Explanation:
Financial reporting can be defined as the formal communication or disclosure of financial information and statements to present and potential users such as investors and creditors.
The objective of financial reporting include all of the following to provide information that:
1. Is useful to those making investment decisions. This information would help creditors to determine whether they should lend to a client or not; or assist investors in deciding whether they should invest in a business or not.
2. Is useful to those lending out money to business entities. When investors and creditors are well furnished with financial information about an organization, they would be able to assess the amounts of cash, timing, and uncertainty of cash flows from dividends or interest.
3. Is useful to creditors in making decisions about providing resources to business entities.
<em>Hence, the primary objective of financial reporting is to provide information useful to capital providers.</em>
Additionally, financial accounting standards board (FASB) is a private, non-profit organization saddled with the responsibility of establishing and maintaining financial accounting and reporting standards for general guidance of individuals or capital providers such as investors, issuers and auditors.
