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Vilka [71]
2 years ago
8

Suppose you want to save in order to purchase a new boat. Take the APR to be 4.8%. You want to have $13,000 toward the purchase

of a boat in three years. How much do you need to deposit each month
Business
1 answer:
yan [13]2 years ago
5 0

Answer:

Monthly deposit= $336.46

Explanation:

Giving the following information:

Future Value (FV)= $13,000

Number of periods= 12*3= 36 months

Interest rate= 0.048/12= 0.004

<u>To calculate the monthly deposit, we need to use the following formula:</u>

FV= {A*[(1+i)^n-1]}/i

A= monthly deposit

Isolating A:

A= (FV*i)/{[(1+i)^n]-1}

A= (13,000*0.004) / [(1.004^36) - 1]

A= $336.46

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Answer:

$10,000

Explanation:

Given the data above,

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3 years ago
Can you think of some other capital budgeting situations in which negative cash flows during or at the end of the project's life
guapka [62]

Answer:

Multiple IRRs:

Said another way, Multiple IRRs occur when a project has more than one <em>internal rate of return.</em> The problem arises where a project has non-normal cash flow (non-conventional cash flow pattern).

Internal rate of return (IRR) is one of the most commonly used capital budgeting tools. Investors make decisions by comparing the IRR of the project under consideration with the <em>hurdle rate</em>. If the IRR is greater than the hurdle rate, the project is accepted, otherwise it is rejected. When there are more than two IRRs, it is not exactly clear which IRR to compare with the hurdle rate.

Hurdle rate is the minimum required rate of return which businesses use as a benchmark to decide whether to invest in a project or not.

<em>So a typical situation which can generate negative cashflows which can in turn lead to multiple IRRs towards the end of the project is where the conditions of investment become adverse towards the end of the project.</em>

Imagine that toward the end of the lifecycle of a project, a forecasted increase external costs such as Interest Rate, influenced by government policies translates to an erosion of the bottom line generated by the business in that year.

Period                                             0          1       3  3 4 5

Unconventional cash flows ($)-19,000 16,000 16,000 6,000 6,000 -52,000

The series is non-conventional cash-flow pattern, which has two sign changes. This is the range in which the net present value of the non-conventional cash flow series is positive. The multiple IRR problem poses a series problem to analysts because the decision is not obvious.  

Cheers!

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3 years ago
The value proposition for the AARP brand is seen in what kinds of benefits for the members?
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2 years ago
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The answer is "Slide Master View"

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Slide Master Look is indeed the name of this feature. This can help you keep track of all the presentations you've created and change those ones that require work or even more information. The additional feature is the ability to change the presentation's actual picture, as it may be extended to all slides. Slide master view also allows you to change the text format & placeholders.

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3 years ago
2. Lereve Company has recorded the following information about the results of its operations for the fourth quarter: Sales reven
Pepsi [2]

Answer:

Lereve Company

Segmented Income Statement for the fourth quarter:

                                   Total Company  Western Division  Eastern Division  

Sales revenues           $200,000              $80,000              $120,000

Variable cost of sales     60,000                 30,000                  30,000

Contribution                $140,000               $50,000               $90,000

Fixed costs:

Common                     $100,000               $25,000               $75,000

Traceable                       50,000                  20,000                 30,000    

Net Income (Loss)       ($10,000)                 $5,000              ($15,000)

The results show that the Eastern Division made a net loss of $15,000 and the Western Division raked in a net income of $5,000, which resulted in the company-wide net loss of $10,000.  This loss could be traced to the allocated common fixed costs of the division, because its contribution to fixed costs was substantial and better than the Western Division's.

Explanation:

When the results of the operations of a divisional company like Lereve Company are prepared in segmental form, the performance pictures become clearer.  Management is enabled to focus on the segments or the factors that are generating the loss to the company.  Perhaps, as in this case, the problem may not be with the division, but the allocation of fixed costs to the divisions.  It can still be traced to the company as a whole, since it is generating much more fixed costs than it could afford from its revenue.

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