Answer:
Q1. Answer is B
Explanation: FV= PV(1+r)n
FV= 10,000(1+0.08)26
FV= 73,963.53
FV= 73,963.53(1+0.05)12
FV=132,827.88
Q2. Answer is D
Explanation: The lenght of time she has to wait to reach her goal is directly related to the interest rate she earns
Q3. Answer is A
Explanation: Interest as the interest rate decreases
Q4. Answer is D
Explanation: A = P(1 + rt)
A= 15,000(1+0.05*12)
A= 15,000(1.6)
A= 24,000
Q5. Answer is C
Explanation: FV= PV(1+r)n
FV= 5000(1+0.06)15
FV=5000(2.396558193)
FV=11,982.79
FV=11,982.79(1+0.1)30
FV=11,982.79(17.44940226888)
FV=209,092.54
Explanation: FV= PV(1+r)n
FV= 5000(1+0.1)15
FV=5000(4.1772481694)
FV=20,886.24
FV=20,886.24(1+0.06)30
FV=20,886.24(5.7434911729)
FV=119,959.94
Q6. Answer is A
Explanation: Interest on interest $2,481.25
Q7. Answer is A
Explanation: FV= PV(1+r)n
25,000=PV(1+0.065)6
25,000=PV(1.4591422165))
PV=25,000/1.4591422165
PV=17,133.35
Answer:
Cash flow will be $12750
So option (B) will be correct answer
Explanation:
We have given return on equity = 15 % = 0.15
Total equity = $85000
We have to find the cash flow
Equity is given by
![equity=\frac{cash\ flow}{return\ on\ equity}](https://tex.z-dn.net/?f=equity%3D%5Cfrac%7Bcash%5C%20flow%7D%7Breturn%5C%20on%5C%20equity%7D)
So ![85000=\frac{cash\ flow}{0.15}](https://tex.z-dn.net/?f=85000%3D%5Cfrac%7Bcash%5C%20flow%7D%7B0.15%7D)
![cash\ flow=85000\times 0.15=12750](https://tex.z-dn.net/?f=cash%5C%20flow%3D85000%5Ctimes%200.15%3D12750)
So cash flow will be equal to $12750
So option (B) will be correct option
Answer:
a) real income in one year = $65,000/1.05 = $61,904.76
real income in two year = $65,000/1.05² = $58,956.92
real income in three year = $65,000/1.05³ = $56,149.44
b) if you have a COLA agreement, then your salary will adjust to inflation. This means that your real salary will remain the same during the 3 years = $70,000 per year.
In this case, your nominal salary will increase by 5% each year, but your salary will remain equal.
Answer:
A) no, because the rate of return on the project is less than the desired rate of return used to calculate the present value of the future cash flows
Explanation:
The NPV is calculated by subtracting the initial investment from the Present value of the project's future cashflows;
NPV = 163,000 - 180,000
NPV = -17,000 , this eliminates choice B
NPV and IRR rule always agree on the decision to accept or reject a project so long as the pattern of cashflows is the same.
Since, the NPV is negative, this project will be rejected. For IRR rule to agree with this, the internal rate of return will also be less than the discount rate used to calculate the present value of future cashflows, making choice A correct.
Answer:
tactical plan
Explanation:
Tactical plan -
It refers to the strategy acquired by the company in order to fulfil short - term plans or project , is referred to as tactical plan .
It is a short term strategy , with the time period of one to three years or even lesser in some cases .
Hence , from the given scenario of the question ,
The correct term is tactical plan .