The rate the fed charges member banks for short-term loans is called the _______

Investment X offers to pay you $4,200 per year for eight years, whereas Investment Y offers to pay you $6,100 per year for five

marishachu [46]

Answer:

PVxa = $27,132.00, PVya = $26,413.00,

Explanation:

Present value (PV) is the value of the future expected cash flow. PV rests on the idea that the worth of a cash received is more than that of the cash promised to be received in the future. To calculate PV a stream of incomes to be received a number of period in the future, the following formula is used:

$PV = C[\frac{1-(1+r)^{-n} }{r} ]$

Where PV = present value

C = cash flow amount from the investment

r = discount rate

n = number of period, in this case years, to receive the cash flow.

The PV formula above is therefore employed to answer the question as follows:

Answer to question (a)

For Investment X in question (a)

PVxa = $4,200 * {[1-(1+r)^-n]/r}

PVxa = $4,200 * {[1-(1+0.05)^-8]/0.05}

PVxa = $4,200 * 6.463212759

PVxa = $27,145.49

For Investment Y in question (a)

PVya = $6,100*{[1-(1+r)^-n]/r}

PVya = $6,100*{[1-(1+0.05)^-5]/0.05}

PVya = $6,100 * 4.329476671

PVya = $26,409.81

Answer to question (b)

For Investment X in question (b)

PVxb = $4,200 * {[1-(1+r)^-n]/r}

PVxb = $4,200 * {[1-(1+0.15)^-8]/0.15}

PVxb = $4,200 * 4.487321508

PVxb = $18,846.75

For Investment Y in question (b)

PVyb = $6,100*{[1-(1+r)^-n]/r}

PVyb = $6,100*{[1-(1+0.15)^-5]/0.15}

PVyb = $6,100 * 3.352155098

PVyb = $20,448.15

Where PVxa, PVya, PVxb and PVyb represents PV for X and Y in questions (a) and (b).

Decisions:

1. In question (a) part where the PV of $27,145.49 of X is greater than $26,409.81 of investment Y, it is better to invest on investment X.

2. In question (b) part where the PV of $20,448.15 of Y is now greater than $18,846.75 of investment X, it is better to invest on investment Y.

7 0

3 years ago

When a consumer borrows money, the lender will ask the borrower to sign:

mel-nik [20]

Answer:

a lender's agreement.

5 0

2 years ago

The Carlberg Company has two manufacturing departments, assembly and painting. The assembly department started 10,000 units duri

alexandr402 [8]

Answer:

Equivalent units

Materials 10,200

Covnersion Cost 9, 100

Explanation:

$\left[\begin{array}{cccc}&$Physical Units&$Materials&$Conversion\\$Beginning&2,000&0.6&0.4\\$Transferred out&9,000&&\\$Ending&3,000&0.8&0.3\\$Equivalent Units&&10,200&9,100\\\end{array}\right]$

The equivalent units will be calcualte as follow:

transferred out

ending x completion

(beginning x completion)

Equivalent units

Materials

9,000 + 3,000 x 80% - 2,000 x 60% = 10,200

Conversion Cost

9,000 + 3,000 x 30% - 2,000 x 40% = 9,100

5 0

3 years ago

JTL has 148,000 shares of stock outstanding. The firm has extra cash so it announced this morning that it is willing to repurcha

MrRissso [65]

Answer:

A tender offer.

Explanation:

This is simple explained to be the offer put to place to execute a work or even services for a said/given price. These offers are typically said to be done publicly; shareholders in some cases a been put to place to sell their shares for a specified price and within a particular window of time. Target sales orders which are been tabled/offered are been usually placed at certain premium value which are effective in market price and is often contingent upon a minimum or a maximum number of shares sold. In many other cases, tender are seen to be in security forms or other non-cash alternatives are offered in exchange for shares.

3 0

3 years ago

Mortagae brokers are the ones who bring the home buyers and the lenders together. True / False.

Alborosie

Answer:

True

Explanation:

A mortgage broker helps a borrower connect with lenders who represent the best fit in terms of the borrower's financial situation and interest-rate needs. A mortgage broker, a mortgage broker determines a loan-to-value ratio, and gathers all the required information regarding borrowers ideal loan type and forward them to the ideal lenders. The loan-to-value ratio is defined as a lending risk assessment ratio that financial institutions and other lenders examine before approving a mortgage. They also track down the unnecessary fees tacked onto closing costs by lenders when issuing a mortgage, this is called garbage fees. There are also a type of loan called the liar loan, these involve the category of mortgages that refers to low-documentation or no-documentation mortgages, this can be acronym to "no job, no income and no assets" type of borrowers.

4 0

3 years ago

The rate the fed charges member banks for short-term loans is called the ________.