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ioda
2 years ago
5

When Alice started working, she has decided to deposit $250 a pay check into a savings account that earns an interest of 1% per

month. She gets paid on the last day of every month. Which of the following expression may be used to determine the account value 10 years from now?
a. F= [250/0.01] (F/P, 1%, 60)
b. F = 250[(P/A, 1%, 120) (F/P, 12%, 5)]
c. F= 250(F/A, 1%, 120)
d. F = [3,000(P/A, 12%, 10)] [(F/P, 12%, 10)]
Business
1 answer:
adoni [48]2 years ago
6 0

Answer:

The correct option is c. F= 250(F/A, 1%, 120).

Explanation:

Since she gets paid on the last day of every month, implies we are to the determine the future value (F) of an ordinary annuity. Therefore, the original expression for the future value (F) of an ordinary annuity is as follows:

F= A(F/A, i, n) …………………. (1)

Where:

F = Future value

A = Periodic or monthly amount = $250

F/A = Convert A to F

i = monthly interest rate = 1%

n = number of months = Number of years * number of months in a year = 10 * 12 = 120

Substituting the values into equation (1) except F/A, we have:

F= 250(F/A, 1%, 120) …………………… (1)

Therefore, the correct option is c. F= 250(F/A, 1%, 120).

<u>Note:</u>

Note that inputting equation into a scientific calculator will give the following future value (F):

F = $57,509.67

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2700 thousand bonds with a face value of $1000 each, are sold at 106. The entry to record the issuance is
IceJOKER [234]

Date, bonds sold at a premium

Dr Cash $28620000000

   Cr Bonds payable $2,700,000,000

   Cr Premium on bonds payable $1,62,000,000

Explanation:

The total face value of the bonds is $1,000 x 2700,000 bonds = $2,700,000,000

since the bonds were sold at 106, their price was =

$2,700,000,000 x 106% = $28620000000

the difference between the face value and the actual market price = $2,862,000,000 - $2,700,000,000 = $1,62,000,000 must be recorded as premium on bonds payable (increases the bonds' carrying value)

<h3>What is the difference between market value and face value?</h3>
  • The market value is the actual price at which the security trades on the open market, as well as the price that fluctuates when the yield reacts to changes in interest rates.
  • The face value is determined by the issuing company. It may be the value at which the firm redeems the shares at some point in the future, but there is no guarantee.

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7 0
2 years ago
A store has been selling 100 DVD burners a week at $450 each. A market survey indicates that for each $30 rebate offered to buye
Ivanshal [37]

Answer:

a rebate of 200 dollars will generate 500 sales

with a revenue of 125,000

Explanation:

We need to maximize the total revenue which is:

TR = Price x Quantity. First we define each of these:

P = (450 - 30X)

Q = (100 + 60X)

Being X the cash rebate

We now replace this into the TR formula:

TR = P x Q = (450 -30X) (100 + 60X)

TR = -1800x2 +27,000x -3,000x + 45,000

TR = -1800x2 +24,000x + 45,000

as this is a quadratic function: a: -1,800 b = 24,000 c = 45,000

the maximum revenue will be at the vertex: -b/2a

-24,000/2(-1,800) = 6.67

now we multiply by 30: 6.67 x30 = 200 dollars

which bring 60 x 6.67 = 400 new customers

250 x (100 +400) = 250 x 500 = 125,000

7 0
3 years ago
Angelina's made two announcements concerning its common stock today. First, the company announced that its next annual dividend
Agata [3.3K]

Answer:

44

Explanation:

according to the constant dividend growth model

price = d1 / (r - g)

d1 = next dividend to be paid

r = cost of equity

g = growth rate

2.2 / 0.1 - 0.05 = 44

6 0
2 years ago
Financial information is presented below: Operating Expenses $ 91100 Sales Returns and Allowances 17000 Sales Discounts 12400 Sa
ira [324]

Answer:

$290,700

Explanation:

The amount of net sales on the income statement is computed as shown below;

Net sales = Sales revenue - Sales discount - Sales return and allowance

Net sales = $320,100 - $12,400 - $17,000

Net sales = $290,700

8 0
2 years ago
Managers of every company should be willing and ready to modify their strategies because?
Keith_Richards [23]

Managers of every company should be willing and ready to modify their strategies because: a) market conditions and circumstances are changing over time or the current strategy is clearly failing.

<h3>Who is a manager?</h3>

A manager can be defined as an individual who has been trained to acquire and distribute resources, as well as provide guidance, support, administrative control, and supervision to the employees who are working in a business organization (company), especially by being morally upright, well behaved and promoting the business's vison, culture, and values at all times.

<h3>What is a marketing strategy?</h3>

Marketing strategy can be defined as a technique that is typically used by business firms to attract customers to their goods or service, especially by giving them a lower price during its initial operation and offering.

In conclusion, we can reasonably infer and logically deduce that managers of any company should be willing and ready to modify their strategies because market conditions and circumstances are dynamic, and as such changing over time or the current strategy is clearly failing.

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Complete Question:

Managers of every company should be willing and ready to modify their strategies because

a) market conditions and circumstances are changing over time or the current strategy is clearly failing.

b) the task of crafting strategy is a one-time event.

c) the strategic vision necessitates periodic updating.

d) frequent changes in strategy make it very difficult for rivals to imitate.

e) all strategies are reactive.

8 0
1 year ago
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