Answer:
Present worth is 398,577
Explanation:
First we need to grow the payment by 15% each year after year 4. Then we need to discount the amounts using the interest rate of 11% each year.
All the workings are done in the pdf file attached with this answer, please find it.
With the given information, I assume that Holden works in financial services, probably in the sales side of the company. This could be investments or a commercial bank.
31/12/2013 bad debts expense
800$
Provision
for bad debt expense 800$
Provision for bad debt 60$
Debter 60$
Provision for bad debt 75$
Debter 75$
Provision for bad debt 45$
Bad debt recovery income 45$
Provision for bad debt 100$
Debter 100$
Provision
for bad debt 25$
Bad
debt recovery income 25$
Answer: 10%
Explanation:
The Capital Asset Pricing Model or CAPM for short can be used to calculate expected return in the following manner,
Expected return = Rf+B(Rm-Rf)
Rf = Risk free rate
B = Beta
Rm= Market return.
Plugging the figures in we have
Expected return = Rf+B(Rm-Rf)
= 0.04 + 1(0.1 - 0.04)
= 0.1
= 10%
