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tester [92]
3 years ago
14

Xavier has been working at his first post college job for almost a year when his company gives him a raise, resulting in a paych

ecks increase of 200, for a total of $400 extra in take home pay every month. He makes a quick list of possible ways to use that money, along with relevant notes for each.
Save for fun summer vacation trip in 8 months

Estimated cost= $1000

Interest rate-- 1% - savings account

3 friends are going -- really want to join



Pay off credit card debt sooner

Balance= $6,500

Interest rate-- 20%

Completely up to date on payments

Typically pay monthly minimum only



Pay down student loan dept

Balance= $34,000

Interest rate-- 4%

Completely up to date on payments



Increase Emergency funds

Balance= $250

Interest rate-- 1% savings account

Realize this should be much higher

Have been lucky so far-- haven't used the account once yet



Participate in company 401(k) plan

Not participating yet

Interest rate-- Variable

Company will match dollar for dollar up to 5% of my salary ($250) a month)



Finance Nicer, more reliable car

Estimated cost- $25,00

Interest rate-- 6%

Currently driving 14-year-old car paid for in cash at a time for purchase

No down payment currently saved



Provide a detailed plan, including actual dollar amounts, for Xavier to wisely use the extra $400 per month from his raise. For each part of the plan, briefly describe why you're making this choice
Business
1 answer:
marshall27 [118]3 years ago
5 0

Answer:9900

Explanation:

600=700

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If the contribution margin is not sufficient to cover fixed expenses: a. total profit equals total expenses. b. a net operating
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Answer:

Option b. a net operating loss occurs.

Explanation:

contribution margin is simply known to be that portion of sales revenue that is yet to be consumed by variable costs and so is an addition to covering the fixed costs. The higher the contribution margin ratio, the more smaller or fewer the units that will need to be manufactured to become profitable. In short, it is sales revenue minus fixed expenses.

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What should you do in order to make sure you don't offend or upset people from other cultures?
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7 0
3 years ago
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Toy Town is considering a new toy that will cost $49,100 in startup costs. The toy is expected to produce cash flows of $47,500
Tasya [4]

Answer:

NPV with a 14.9% discount rate: 6,329.06

The toy should be produced as the NPV is positive.

IRR = 26.65%

Explanation:

First we calculate for the NPV using the given discount rate of 14.9%

We will calculate the present value of each year cash inflow:

\frac{inflow}{(1 + rate)^{time} } = PV  

Year 1 cash inflow: 47,500.00

time   1.00

rate  0.149

\frac{47500}{(1 + 0.149)^{1} } = PV  

PV   41,340.30

Year 2 cash inflow:  18,600.00

time   2.00

rate  0.149

\frac{18600}{(1 + 0.149)^{2} } = PV  

PV   14,088.76

Then, we add them and subtract the investment to get NPV

NPV = 14,088.76 + 41,340.3 - 49,100 = 6,329.06

The toy should be produced as the NPV is positive.

Now for the IRR

That is the rate at which NPV equals zero we can solve for this using the quadratic equation as there are only two cash flow:

Year 1 will discount at (1+IRR)

Year 2 will be discount at (1+IRR )^2

So we can express and recreate the quadratic formula:

18,600 X^2 + 47,500 X - 49,500 = 0

A = 18,600

B = 47,500

C = -49,100

x_1 = \frac{-b+\sqrt{b^{2} -4ac}}{2a}\\x_2 = \frac{-b -\sqrt{b^{2} -4ac}}{2a}

We can solve and get:

x1 =  0.78957

x2 = -3.3433

We take the positive value.

and now solve for IRR

\frac{1}{1+ IRR} = 0.78957\\IRR = \frac{1}{0.78957} -1

IRR = 0,2665121 = 26.65%

This will be the IRR for the project.

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An investor with no other positions buys 1 dwq jun 60 call at 3.50. if the investor exercises the call when the stock is trading
miskamm [114]
Answer: $450 profit  
The investor exercised the right to buy the stock for 60 and can sell the stock in the market for 68 for an $8 per-share gain.  
The gain of 8 minus the premium of 3.50 gives the investor a profit of 4.50
(4.50 Ă— 100 = $450).
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James purchased five bonds of face value of $1,000 that paid 5 percent annual interest rate. the total annual interest income of
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250 dollars without compound intrest
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