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Readme [11.4K]
2 years ago
12

Assume the real rate of return is 2.97% and the inflation rate is 2.20%. Find the nominal rate of return using the exact formula

.
Business
1 answer:
Lunna [17]2 years ago
4 0

Answer:

Nominal rate of return= 0.0517 = 5.17%

Explanation:

Giving the following information:

Real rate of return= 2.97%

Inflation rate= 2.20%

<u>To calculate the nominal rate of return, we need to use the following formula:</u>

Real rate of return= nominal rate of return - inflation rate

Nominal rate of return= Real rate of return +  inflation rate

Nominal rate of return= 0.0297 + 0.022

Nominal rate of return= 0.0517 = 5.17%

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A. The Equity Investment account balance will equal 30% of investee's stockholders' equity at date of acquisition, plus the unamortized cost of the patent.

7 0
3 years ago
The system that compares actual results to a budget so that significant deviations can be flagged and investigated further is ca
horrorfan [7]

The system that compares actual results to a budget so that significant

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4 0
3 years ago
On January 1, 2020, Martinez Company makes the two following acquisitions. 1. Purchases land having a fair value of $330,000 by
vova2212 [387]

Answer:

Explanation:

a)

Date Account Titles and Explanation Debit Credit

January 1, 2020 Land $360,000.00

Discount on notes payable $246,621.00

Notes payable $ 606,621.00

(To record purchase of land by issuing note payable)

PV of $606,621 discounted at 11% =606,621/(1.11)^5 = $ 360,000

2.

Computation of the discount on notes payable:

Maturity value $560,000

Present value of $560,000 due in 8 years at 11% = $560,000 * 0.43393 = $ 243,000

Present value of $39,200 payable annually for 8 years at 11% annually—$39,200 * 5.14612 = $ 201,728

Present value of the note = $ 243,000 + $ 201,728 = $ 444,728

Discount = $ 560,000 - $ 444,728 = $ 115,272

Date Account Titles and Explanation Debit Credit

January 1, 2020 Equipment $444,728.00

Discount on notes payable $115,272.00

Notes payable $ 560,000.00

(To record purchase of equipment by issuing note payable)

b)

1.

Date Account Titles and Explanation Debit Credit

December 31, 2020 Interest expense ($ 360,000*11%) $39,600

Discount on notes payable $39,600

(To record the interest expense recorded and discount amortized)

2.

Date Account Titles and Explanation Debit Credit

December 31, 2020 Interest expense ($444,728 * 11%) $48,920

Discount on notes payable $9,720

Interest Payable ( $ 560,000 * 7%) $39,200

(To record the interest expense recorded)

7 0
3 years ago
5,000 7.5 percent coupon bonds outstanding, $1,000 par value, 19 years to maturity, selling for 105 percent of par; the bonds ma
vitfil [10]

Answer:

10.53%

Explanation:

WACC = wE*rE + wP*rP + wD*rD(1-tax)

<u>Market values;</u>

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Total market value = 13,523,500

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wP= 1,658,500/13,523,500 = 0.1226

wD = 5,250,000/13,523,500 = 0.3882

<u>Cost of capital;</u>

Cost of common equity, rE using CAPM;

rE = 0.06 + (1.13*0.09) = 0.1617

rE = 16.17%

Cost of preferred stock = 6%

Cost of debt

using a financial calculator, input the following; N= 38, PV = -1050, PMT = 37.5,

FV =1000, then CPT I/Y = 3.51% . So annual rate = 3.51% *2 = 7.02%

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WACC = 0.0791 + 0.007356 + 0.0188

WACC = 0.1053 or 10.53%

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Telecommuting, or enabling employees to work at home while keeping in touch with their employers and coworkers via email, phone,
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Answer: Work life benefits.

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The benefit of being able to work from home with the use of enabling technologies available is known as work life benefit. Work life benefits are the benefits an employee enjoys from the organization they work for, such as: health care services, insurance covers and other form of benefits.

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