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lukranit [14]
3 years ago
14

g Your financial advisor offers you two different investment options. Plan A offers a $17,000 annual payment, in perpetuity. Pla

n B offers $30,000 annual payments for 18 years. Both plans will make their first payment one year from today. What discount rate would make you indifferent to these two plans
Business
1 answer:
motikmotik3 years ago
5 0

Answer:

4.76%

Explanation:

The requirement in this question is determining the discount rate which gives the same present value in both cases since discount rates discount future cash flows to present value terms.

PV of a pertuity=annual cash flow/discount rate

PV of a pertuity=$17,000/r

PV of ordinary annuity=annual cash flow*(1-(1+r)^-n/r

PV of ordinary annuity=$30,000*(1-(1+r)^-18/r

$17,000/r=$30,000*(1-(1+r)^-18/r

multiply boths side by r

17000=30,000*(1-(1+r)^-18

divide both sides by 30000

17000/30000=1-(1+r)^-18

0.566666667=1-(1+r)^-18

by rearraging the equation we have the below

(1+r)^-18=1-0.566666667

(1+r)^-18=0.433333333

divide indices on both sides by -18

1+r=(0.433333333)^(1/-18)

1+r=1.047554315

r=1.047554315-1

r=4.76%

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nignag [31]

Answer:

a. increased available credit

c. increased money supply

f. decreased interest rates

Explanation:

Expansionary policy is a policy pursued by either the government or the monetary authority to stimulate aggregate demand in the economy. This can be achieved through the use of either the fiscal policy tool by the government or the monetary policy tool by the Federal Reserve.

The policy target of expansionary policy are any of the economic goals of the government, such as economic growth, control of inflation, favorable balance of payment, e.t.c.

5 0
3 years ago
Cameron Manufacturing Co.'s static budget at 5,000 units of production includes $40,000 for direct labor and $5,000 for variable
Xelga [282]

Answer:

C) variable costs of $72,000 and $25,000 of fixed costs

Explanation:

To determine the flexible budget we must first calculate the variable costs of producing 8,000 units:

direct labor per unit = $40,000 / 5,000 units = $8 per unit

electric power per unit = $5,000 / 5,000 units = $1 per unit

total variable cost per unit = $8 + $1 = $9

Total variable costs for 8,000 units = 8,000 units x $9 per unit = $72,000

Total fixed costs = $25,000

4 0
3 years ago
Jessica who owns a restaurant in New York City and is generating handsome profit from the business, has decided to take a portio
lara [203]

Answer:

Financialisation

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5 0
3 years ago
Printers today have many features that include improved quality, photo printing capabilities, digital camera connectivity, built
iVinArrow [24]

Answer:

A printer is a device that accepts text and graphic output from a computer and transfers the information to paper, usually to standard size sheets of paper. Printers vary in size, sophistication, speed, and cost. In general, more expensive printers are used for higher-resolution color printing.

Printers today have many features that include improved quality, photo printing capabilities, digital camera connectivity, built-in flash memory card readers, wireless connectivity, and faster speed.  

The Six important printer qualities are:

  1. Color: It is important for users who need to print pages for presentations or maps, photos and other pages where color is part of the information. Color printers can also be set to print only in black-and-white. Color printers are more expensive to operate since they use two ink cartridges (one color and one black ink, toner) that need to be replaced after a certain number of pages. Users who don't have a specific need for color and who print a lot of pages will find a black-and-white printer cheaper to operate.  
  2. Resolution: Printer resolution (the sharpness of text and images on paper) is usually measured in dots per inch (dpi). Most inexpensive printers provide sufficient resolution for most purposes at 600 dpi.
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Conclusively the best printer will be the one which will provide pleasant color contrast, good resolution, enough memory, wireless connectivity and have better language settings.

3 0
3 years ago
J Corporation has two divisions. Division A has a contribution margin of $79,300 and Division B has a contribution margin of $12
Allushta [10]

Answer:

Net income= $98,200

Explanation:

Giving the following information:

Division A:

The contribution margin of $79,300

Division B:

Contribution margin of $126,200.

The total traceable fixed costs are $72,400 and total common fixed costs are $34,900.

<u>To calculate the net operating income, we need to deduct from the combined contribution margin the fixed costs.</u>

<u></u>

Net income= (79,300 + 126,200) - 72,400 - 34,900

Net income= $98,200

7 0
3 years ago
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