What kind of businesses are motivated to earn a profit

Mirembe is interested in receiving income to help save money for her grandson's college education. She is considering investing

riadik2000 [5.3K]

Answer:

D) the company does not have a legal obligation to pay dividends when promised.

Explanation:

No corporation has a legal obligation to distribute dividends to common stock shareholders, even if they make a lot of money, or they have a lot of cash available. The only thing shareholders can do to change a corporation's dividend distribution policy is to elect a new board of directors.

In Mirembe's case I doubt that she has enough money for to board to pay attention to her. If Mirembe really needs an annual return, then she should invest her money in bonds.

6 0

3 years ago

Perit Industries has $110,000 to invest. The company is trying to decide between two alternative uses of the funds. The alternat

professor190 [17]

Answer:

$-32,775.48

$185,710.69

Project B

Explanation:

Net present value is the present value of after-tax cash flows from an investment less the amount invested.

NPV can be calculated using a financial calculator

Only projects with a positive NPV should be accepted. A project with a negative NPV should not be chosen because it isn't profitable.

When choosing between positive NPV projects, choose the project with the highest NPV first because it is the most profitable.

Project A

Cash flow in year 0 = -$110,000

Cash flow in year 1 - 5 = $20,000

Cash flow in year 6 = $20,000 + $8,600 = 28,600

I = 16%

NPV = $-32775.48

Project B

Cash flow in year 0 = -$110,000

Cash flow in year 1 - 5 = $68,000

Cash flow in year 6 = $68,000 + $110,000 = $178,000

I = 16%

NPV = $185,710.69

Project B should be chosen because its NPV is positive

To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

4 0

3 years ago

Assume an after-tax savings interest rate of 7 percent and a tax rate of 28 percent. (a) Calculate the total rental cost and tot

Readme [11.4K]

Complete Question

Annual rent $ 7,380

Insurance 145

Security deposit 650

Annual mortgage payments $9,800 ($9,575 is interest)

Property taxes 1,780

Insurance/maintenance 1,050

Down payment/closing costs 4,500 Growth in equity 225

Estimated annual appreciation 1,700

Assume an after-tax savings interest rate of 7 percent and a tax rate of 28 percent.

(a) Calculate the total rental cost and total buying cost.

Answer:

Explanation:

(a)Rental Costs

Buying Costs $7,380

Rent $9,800

The following calculations were made:

Interest lost on security deposit

= Security deposit × 7%

= $650 × 0.07 = $45.5

Interest lost on down payment and closing cost

= Down payment × 7%

= $4,500 × 0.07 = $315

Tax savings for mortgage interest =

Interest × 28%

$9,575 × 0.28 = $2,681

Tax savings for property taxes =

= Property taxes × 28%

$1,780 × 0.28 = $498

8 0

3 years ago

All but one of the following is a mechanism intended to provide reassurance against imperfect information. Which is it?

nikdorinn [45]

Answer:D. financial capital markets.

Explanation:Imperfect Information is a term used in Economics to describe a situation where the two or more parties in a business contract have varying levels of Information about the said contract,one party may have more information about the Contract than the other party or parties.

Reassurance is the process of removing the doubts of a person as to a given action or contract, it is essential to reassure investors in the case of market crisis by Organisations and Government.

5 0

3 years ago

Unions contribute to

Len [333]

Answer:

The correct answer is D: neither frictional nor structural unemployment

Explanation:

Structural unemployment is a form of unemployment where, at a given wage, the quantity of labor supplied exceeds the quantity of labor demanded because there is a fundamental mismatch between the number of people who want to work and the number of available jobs. It is generally considered to be one of the “permanent” types of unemployment, where improvement if possible, will only occur in the long run.

Structural unemployment is a longer-lasting form of unemployment caused by fundamental shifts in an economy and exacerbated by extraneous factors such as technology, competition, and government policy. The unemployed workers may lack the skills needed for the jobs, or they may not live in the part of the country or world where the jobs are available. Structural unemployment can last for decades and may need radical change to redress the situation.

There is not a direct link between unions and structural unemployment. The main causes are economy shifts, lack of preparation, competiton (for example, factories moving overseas), government policy, technology shifts, etc.

Frictional unemployment is the time period between jobs when a worker is searching for or transitioning from one job to another. It can be voluntary based on the circumstances of the unemployed individual. Frictional unemployment exists because both jobs and workers are heterogeneous, and a mismatch can result between the characteristics of supply and demand. Such a mismatch can be related to skills, payment, work-time, location, seasonal industries, attitude, taste, and a multitude of other factors.

There is always at least some frictional unemployment in an economy. Economists accept that some frictional unemployment is okay because both potential workers and employers take some time to find the best employee-position match.

There is no direct contribution that unios made to generate or increase frictional unemployment. It causes are found in the description above.

5 0

3 years ago