Answer:
Annual rate 0.017
Explanation:
Computation of the annual rate on the real bond.
Using this formula
Annual rate = Par Zero coupon inflation index/(1+r) ^Numbers of years =Inflation-indexed bond
Let plug in the formula
Annual rate=100 / (1 + r) ^10 = 84.49
Annual rate= (100 / 84.49)^1 /10 − 1
Annual rate=(1.18357)^0.1-1
Annual rate=1.016-1
Annual rate=0.017
Therefore the annual rate of return will be 0.017
Making building components fit together.
Answer: $80 million per year for 25 years
Explanation:
The option you should choose is one that will guarantee you the highest present value.
This means that you need to discount the annual payment of $80 million per year for 25 years to find the present value. As you did not include a rate, we shall assume a rate of 8% for reference purposes.
The annual payment is an annuity so the present value can be calculated by:
Present value of annuity = Annuity payment * Present value interest factor, rate, no. of years
= 80,000,000 * Present value interest factor, 8%, 25 years
= 80,000,000 * 10.6748
= $853,984,000
<em>The present value of the annual payment is more than the present value of the $850 million received today so the Annual payment should be taken. </em>
Answer:
The correct answer is: As the interest in a product goes up, the price goes up.
Explanation:
Increasing interest and thus increasing demand leads to increased demand for a particular good or service. In this respect, as production remains constant, the increased demand for goods or services pressures the supply of this good or service, culminating in its price increase.
Answer:
See below
Explanation:
We will compute the above using the EOQ
EOQ = √ 2 × D × S / H
EOQ = √ 2 × 2,000 × 500 / 2 × 3
EOQ = 1,000
1,000 units of toys should be manufactured at a time
Production runs = 2,000 / 1,000
Production runs = 2