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TEA [102]
2 years ago
15

Assume that you are nearing graduation and have applied for a job with a local bank. As part of the bank's evaluation process, y

ou have been asked to take an examination that covers several financial analysis techniques. The first section of the test addresses time value of money analysis. See how you would do by answering the following questions. Draw time lines for (a) a $2000 lump sum cash flow at the end of year 4, (b) an ordinary annuity of $1000 per year for 5 years, and (c) an uneven cash flow stream of -$450, $1000, $650, $850 and $500 at the end of years 0 through 4. What is the future value of an initial $1000 after 5 years if it is invested in an account paying 5% annual interest
Business
1 answer:
kotegsom [21]2 years ago
8 0

Answer:

(1) See the attached picture for the time lines.

(2) The future value of $1000 = $1,276.28

Explanation:

(1) Draw time lines for (a) a $2000 lump sum cash flow at the end of year 4, (b) an ordinary annuity of $1000 per year for 5 years, and (c) an uneven cash flow stream of -$450, $1000, $650, $850 and $500 at the end of years 0 through 4.

Note: See the attached picture for the time lines for (a), (b), and (c).

(2) What is the future value of an initial $1000 after 5 years if it is invested in an account paying 5% annual interest.

This can be calculated using the future value formula as follows:

The future value of $1000 = $1000 * (100% + Annual interest rate)^Number of years = $1000 * (100% + 5%)^5 = $1000 * 105%^5 = $1,276.28

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As the prices in markets change, buyers and sellers respond in different ways according to how much time they have to react. Mat
mel-nik [20]

Answer:

(1) Short run - (A)

(2) Immediate run - (B)

(3) Long run - (C)

In a short run, all the changes occur in an economy are for shorter time period and buyers have little time to respond to these changes. Hence, the demand curve is elastic in nature.

In an immediate run, there will be no time for the consumers to respond to the changes occur in an economy. Suppose there is an increase in the prices of the goods, as a result there will no changes occur in the quantity demanded. Hence, the demand curve is inelastic, means that there is no effect on quantity demanded.

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7 0
3 years ago
A small company that makes hand-sewn leather shoes has fixed costs of $320 a day, and total costs of $1200 per day at an output
anastassius [24]

Answer: c = 44x + 320

Explanation:

Based on the information given, the cost of materials used in the shoe is a variable cost and this will be:

= Total cost - Fixed cost

= $1200 - $320

= $880

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Then the total cost equation will then be:

c = 44x + 320

where,

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3 0
3 years ago
Name of unemployment that occurs when a person wants to take time to find job
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3 years ago
Read 2 more answers
A company will sell N units of a product after spending $x thousand in advertising, as given by N = 60x - x^2 5 \leq x \leq 30ap
andre [41]

Answer:

Explanation:

Given that:

N(x) = 60 x - x^2   where; 5 ≤ x ≤ 30

SO by increasing the advertising budget from 10,000 to 11000; the budget is increased from 10 to 11 since x is in thousands.

∴

Increase in sales = N(x₂) - N(x₁)

Increase in sales = N(11) -N(10)

Increase in sales = (60(11)-11²) - (60(10) -10²)

Increase in sales = (660 - 121) - (600 - 100)

Increase in sales = 539 - 500

Increase in sales = 39 units

By increasing the advertising budget from 20,000 to 21000; the budget is increased from 20 to 21 since x is in thousands.

∴

Increase in sales = N(x₂) - N(x₁)

Increase in sales = N(21) -N(20)

Increase in sales = (60(21)-21²) - (60(20) -20²)

Increase in sales = (1260 - 441) - (1200 - 400)

Increase in sales = 819 - 800

Increase in sales = 19 units

4 0
3 years ago
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