Answer:
Juan is a small-business owner. He has some cash flow and wants to invest in a new project. Juan’s assistant provides an evaluation and estimates the nominal returns that Juan would earn if he invests in the project. Juan reads the evaluation and makes the decision based on the real terms after factoring in inflation - Yes, this is a good financial decision.
Explanation:
The annual percentage of profit earned on an investment, adjusted for inflation is known as the real rate of return.
The nominal interest rate is the interest rate before taking inflation into account
Inflation reduces the value of money. Thus, calculating a rate of return in real value rather than nominal value, especially during a period of high inflation, gives a clearer picture of an investment's success.
The real rate of return adjusts profit for the effects of inflation, thus, it is a more accurate measure of investment performance than nominal return.
Usually, nominal rates are higher than real rates of return except in times of zero inflation or deflation.
Juan actually considered inflation rate, and made his decision on investment based his on real rate of return , and not nominal rate of return. Thus, he made a good financial decision.
<span>Provide stock option to the agent
This issue emerges when a person known as the agent consents to work for another which is the principal for some financial gains . Such arrangements may cause tremendous expenses for the agent in themanner prompting the issues of good risk and irreconcilable circumstance. Inferable from the expenses brought about, the agent may start to seek after his own particular plan and disregard the best rule and practice that will benefit the principal's work</span>
Answer:
Total savings= $2,468.7
Explanation:
Giving the following information:
Suenette plans to save $600 at the end of Year 1, $800 at the end of Year 2, and $1,000 at the end of Year 3.
Annual rate= 3.4%
To calculate the final value of the investment, we need to apply the following formula to each deposit:
FV= PV*(1+i)^n
Deposit 1= 600*1.034^2= 641.50
Deposit 2= 800*1.034= 827.2
Deposit 3= 1,000
Total= $2,468.7
Answer:
B) search for solutions that are reasonable
Explanation:
When Emily solves her work problems by satisficing a large number of decisions, it means that she makes the decisions that are barely adequate to solve the issues. She doesn't take the time to make the best possible ones. Since she has a very tight work schedule, she doesn't have the time to search all the necessary information nor to search all the possible options. She doesn't have the time to analyze which alternative is best, she will take whatever option she finds first.