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AlexFokin [52]
3 years ago
11

Suppose that annual income from a rental property is expected to start at ​$1,100 per year and decrease at a uniform amount of ​

$45 each year after the first year for the 15​-year expected life of the property. The investment cost is ​$7,000​, and i is 9​% per year. Is this a good​ investment? Assume that the investment occurs at time zero​ (now) and that the annual income is first received at EOY one.
Business
1 answer:
murzikaleks [220]3 years ago
4 0

Answer:

It is not a good investment because  

∑ yearly incomes < Final cost of investment

i.e.  $11775  <  $16450

Explanation:

Cost of investment ( principal ) = $7000

Interest rate ( r ) = 9% = 0.09

tenure ( t ) = 15 years

hence Final cost of investment ( A ) = P + Prt

A = 7000 + ( 7000 * 0.09 * 15 ) = $16450

Annual incomes

First year = $1100

2nd year = $1100 - $45 = $ 1055

3rd year = $1055 - $45 = $1010

4th year = $1010 - $45 = $965

5th year = $965 - $45 = $920

6th year = $920 - $45 = $875

7th year = $875 - $45 = $830

8th year = $830 - $45 = $785

9th year = $785 - $45 = $740

10th year = $740 - $45 = $695

11th year = $695 - $45 = $650

12th year = $650 - $45 = $605

13th year = $605 - $45 = $560

14th year = $560 - $45 = $515

15th year = $515 - $45 = $470

Total annual income = ∑ yearly incomes = $11775

It is not a good investment because  

∑ yearly incomes < Final cost of investment

i.e.  $11775  <  $16450

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Using the chart below for reference, how would you describe the relationship between the amount of education you receive and the
Maslowich

Answer:

Positive correlation

Explanation:

As the level of education increases, the higher the level of income. This is a perfect example of a positive correlation. An increase in one of the variables ( education) increases the other variable( income). A positive correlation is also a direct relationship.

A negative correlation or indirect relationship is when an increase in one variable leads to the other variable moving in the opposite direction.

4 0
3 years ago
Beyond the IMS, identify and briefly describe the (exogenous) environmental factors that organizations should consider when perf
Nookie1986 [14]

Answer:

1. Environmental factors that organizations should consider are :Political, Economic, Social, Technological, Legal and Environmental factors. Example are interest rates, innovations and laws

2. Internal factors that organizations should take into account in preparing to do a SWOT analysis are strengths (S) and weaknesses (W).Examples are innovation culture, expertise and resources as well as value systems

3. Environmental factors are influencing Ford Motor Company and the rest of the automobile industry are laws (legal-environmental) , interest rates (economic), customers needs depending on geography (social)

Explanation:

The Integrated Management System (IMS) is an internal tool that the Company uses to all of its organization systems and processes into one complete framework which enables the organization to work as a single unit. It however does not tell anything about the environment in which a company operates in.

When performing an external environmental analysis, organizations should consider the PESTLE analysis which tell much about the external environment. PESTLE analysis looks into Political, Economic, Social, Technological, Legal and Environmental factors that are likely to impact an organization strategy.

The SWOT analysis provides a scan of the internal and external environment and is an important part of the strategic planning process. Environmental factors Internal to the organization are classified as strengths (S) and weaknesses (W),  and those external can be classified as opportunities (O) and threats (T).

Ford Motor Company and the rest of the automobile industry are mainly influenced by the Legal and Environmental Factors through laws set by countries to reduce carbon emissions in the fight against global warming. Other factors include the ability to innovate (Technological) and meeting the changing customer needs (Social). The profit part is always important as well in these inflationary times so they also need to set prices well (Economic).

3 0
3 years ago
Oval Inc. just paid a dividend equal to $1.50 per share on its common stock, and it expects this dividend to grow by 4 percent p
Rainbow [258]

Answer:

e. 14.60%

Explanation:

The computation of Oval's cost of new common equity is shown below:-

Price of stock = Estimated dividends for next period ÷ (Required rate of return - Growth rate)

Dividend =  $1.50 × (1 + 4%)

= $1.56

Price of stock would be the price net of flotation cost

= $16 × (1 - 8%)

= $14.72

Required rate of return

= (1.56 ÷ 14.72) + 0.04

= 14.60%

8 0
3 years ago
The pricing strategy used by companies manufacturing or selling designer apparel custom jewelry and exclusive paintings is refer
a_sh-v [17]

Answer : Premium Pricing.

Companies manufacturing or selling designer apparel, custom jewellery or exclusive paintings usually have a unique brand. These companies usually have their own signature brands that have a big competitive advantage. Hence they charge higher prices.

8 0
3 years ago
The inventory costing method that reports the earliest costs in ending inventory is:_______
nikdorinn [45]

Answer:

a. LIFO.

Explanation:

The LIFO method refers to an inventory method that means the item which is last purchased should be sold first during the period of time. So in this inventory method the earliest cost in the closing inventory should be recorded

Therefore the given situation, the correct option is a.

And, the other options are wrong

4 0
3 years ago
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