Answer:
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Explanation:
If<em> the investment yield 6% per year</em>, each year its value is multiplied by 1.06.
After 2 years, the value is multiplied by 1.06², after 3 years it is multiplied by 1.06³, and so on.
After n years, the value is multiplied by 1.06ⁿ.
You want that <em>the investment quadruples</em>, thus the multiplicative factor is 4, meaning that you want to solve for:
If you do not know logarithms, you can solve by succesive iterations:
- 1.06² = 1.1236
- 1.06⁴ = 1.2625
- 1.06¹⁰ = 1.79
- 1.06²⁰ = 3.2
- 1.06³⁰ = 5.7
- 1.06²⁵ = 4.29
- 1.06²⁴ = 4.05
- 1.06²³ = 3.82
Thus, <em>if an investement yields 6% per years</em>, it takes 24 years t<em>he investment to quadruple in value.</em>
If you know logarithms, you can make n the subject of the equation:
Again, the solution is 24 years.
Answer:
The NPV of the project at 8.7 percent will be 4,802.58
Explanation:
We will calcualte the present value of the cash inflow:
<u>year 3: </u>
Inflow 11,900.00
time 3.00
rate 0.087
PV 9,265.28
<u>Year 4:</u>
Inflow 11,900.00
time 4.00
rate 0.087
PV 8,523.71
<u>Year 6:</u>
Inflow 50,500.00
time 6.00
rate 0.087
PV 30,613.58
Then, we will add them together and subtract the investment amount
NPV: 30,613.59 + 8,523.71 + 9,265.28 - 43,600 = 4,802.58
Answer:
<h2>First Part</h2>
1. True
Liquidity ratios such as the Current ratio are used to show that a company can cover its short-term obligations.
2. True
Asset management ratios juxtapose a company's performance vs its long term assets and so provide insights into management's efficiency.
3. False
Debt management ratios show how much of the company is funded by total debt not whether it has sufficient cash to repay its short- term debt obligations.
4. True
Profitability ratios take into account how much income is raised by a company so when this increases, the ratios will as well.
5. True
Market-Value ratios show the firm's value in the market which is a reflection of what investors and the markets think about the firm's growth prospects or current and future operational performance.
<h2>Second Part</h2>
The Weakness/ Limitations are;
a. A firm may operate in multiple industries.
Should this be the case, the company's performance in one sector cannot necessarily be compared to companies that operate in that single sector because it would not take into account the company's other sectors which may impact figures.
c. Different firms may use different accounting practices.
When different accounting practices are used, ratio analysis may not be a true indication of the situations in the company. For instance, a company using LIFO cannot be effectively compared to a company using FIFO when using ratio analysis.
<h2>
True. The early detection of fraud avoids greater loss.</h2>
Explanation:
The early detection of fraud needs to be done for the following reason:
- Fraud will continue if not found earlier and thus leads to greater loss
- The fraud team is not widen before huge loss happens
- Easy to recover
- Possibility of finding the loop holes even if it is from external sources
- Detects weakness in the internal control and eradicate and make the system secure
- Avoid huge loss and threats
- To gain profits
- To keep up the name of the organization
- To bring business and to retain customers
Answer:
The answer is: E) modified rebuy
Explanation:
A modified rebuy happens when a company (or an individual consumer) will buy a product or service which it has already purchased in the past. But now the company wants to change either the supplier, the product's specifications or the terms of the sale.
In this case, the store owner had already bought advertising tools before, but not this type.
