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Pachacha [2.7K]
3 years ago
8

Uncle Fred recently died and left $280,000 to his 45-year-old favorite niece. She immediately spent $80,000 on a town home but d

ecided to invest the balance for her retirement at age 65. What rate of return must she earn on her investment over the next 20 years to permit her to withdraw $75,000 at the end of each year through age 80 if her funds earn 10 percent annually during retirement
Business
1 answer:
Marrrta [24]3 years ago
7 0

Answer:

6.06%

Explanation:

The computation of the rate of return is shown below:

Given that

NPER = 20 years

PV = ($280,000 - $80,000) = $200,000

PMT = $0

FV = $75,000 × PVIFA factor at 10% for 21 years

= $75,000 × 8.6487

= $648,652.50

The following formula should be applied

= RATE(NPER;PMT;-PV;FV;TYPE)

The present value comes in negative

After applying the above formula, the rate of return is 6.06%

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Matching each scenario to the insurance needed for protection.

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<h3>What is insurance?</h3>

Insurance can be defined as a coverage that help to cover cost or expenses in case of unforeseen or unexpected circumstances such as:

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Therefore Tyrell's son has leukemia and will need cancer  medications- Health insurance.

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8 0
2 years ago
Alex's country was once communist, but now allows limited private ownership of companies, and lets market forces determine produ
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Alex's country was once communist, but now allows limited private ownership of companies, and lets market forces determine production and pricing decision is the kind of 'Market Socialist' economy.

Market socialism, sometimes known as liberal socialism, is an economic system that strikes a balance between free enterprise and socialist planning. In this system, businesses are publicly owned, but output and consumption are determined by the market rather than by governmental planning.

In real life, Market socialism components have been present in a number of different economies. A version of market-based socialism, based on socially owned cooperatives, workers' self-management, and market allocation of capital, is usually regarded as having existed in the former Socialist Federal Republic of Yugoslavia.

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8 0
1 year ago
The distribution of hourly sales for a local family owned store is normally distributed with a mean of $225 per hour and a stand
adell [148]

Answer:  

The standard deviation of 75 dollars

Explanation:

Standard deviation, S.D.= 75 dollars; Mean, M= 225 dollars; Mean deviation, D= ?

S.D. = √ D² - M

∴ 75 = √ D² - 225

D² = 75² - 225 = 5625 + 225 = 5950

∴ D = √5950 = 24.4 dollars

From the above, it shows that, the standard deviation of 75 dollars contains the middle 95 percent of hourly sales.

6 0
3 years ago
Locke Inc has a machine that installs tires. The machine is now in need of repair. The machine originally cost $10,000 and the r
Phoenix [80]

Answer: William should replace the machine with a new one because over that 2 year span he will be losing less money, if he were to repair he would lose more money.

Explanation:

5 0
2 years ago
Dinklage Corp. has 6 million shares of common stock outstanding. The current share price is $84, and the book value per share is
Iteru [2.4K]

Answer:

Dinklage Corp.

a. The company's capital structure by book value:

Weights:

Equity = 9.84%

Debt = 90.16%

b. The company's capital structure by market value:

Weights:

Equity = 64.55%

Debt = 35.45%

Explanation:

a) Data and Calculations:

Outstanding common stock = 6 million shares

Current share price = $84

Book value per share = $5

Total equity book value = $30 million (6,000,000 * $5)

Total equity market value = $504 million (6,000,000 * $84)

First bond's face value = $145 million

Coupon rate = 5%

Selling price = 95% of par

Market value of first bond = $145 * 95% = $137.75 million

Second bond's face value = $130 million

Coupon rate = 4%

Market value = $130 * 107% = $139.1 million

Total market value of bonds = $276.85 million ($137.75 + $139.1)

Book value of bonds = $275 million ($145 + $130)

a. The company's capital structure by book value:

Equity = $30 million

Debt = $275 million

Total firm's value = $305 million

Weights:

Equity = $30/$305 * 100 = 9.84%

Debt = $275/$305 * 100 = 90.16%

b. The company's capital structure by market value:

Equity = $504 million

Debt = $276.85 million

Total firm's value = $780.85 million

Weights:

Equity = $504/$780.85 * 100 = 64.55%

Debt = $276.85/$780.85 * 100 = 35.45%

6 0
3 years ago
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