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2 years ago

If you begin investing at age 25 instead of age 20, how much more do you need to invest per month to have $1M at retirement?

1 answer:

8 0

The logic behind saving for retirement is that the earlier one begins saving for retirement, the lesser amount they will have to save monthly. From the graph given, the answer to how much more you need to invest per month to have $1M at retirement is;

$140

Assuming a 6% investment on return, the individual will have to save $360 monthly to have $1,000,000 at the retirement age of 67.

If he, however, waits till the age of 25 to begin saving, he will have to save $500 which is $140 more than he would have saved from the age of 20.

So, to save less per month, you need to start at an early age.

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Orange, Inc. has identified the following cost drivers for its expected overhead costs for the year:

Zarrin [17]

Answer:

the total overhead cost is $1,560

Explanation:

The computation of the total overhead cost for product X is given below:

Setup cost = 40,000 ÷ 200 × 4 = 800

Ordering cost = 20,000 ÷ 1,000 × 8 = 160

Maintenance cost = 50,000 ÷ 5,000 × 50 = 500

Power = 10,000 ÷ 10,000 × 100 = 100

Hence, the total overhead cost is $1,560

6 0

3 years ago

On March 15, American Eagle declares a quarterly cash dividend of $0.105 per share payable on April 13 to all stockholders of re

rodikova [14]

Answer:

March 15 Debit Credit

Dividends $22,470,000

Dividends Payable $22,470,000

March 30 No entry

April 13

Dividends Payable $22,470,000

Cash $22,470,000

Explanation:

In order to record American Eagle's declaration and payment of cash dividends for its 214 million shares first we would require to calculate the dividends as follows:

Dividends=214,000,000 shares*$0.105

Dividends=$22,470,000

Therefore, the journal entries would be the following:

March 15 Debit Credit

Dividends $22,470,000

Dividends Payable $22,470,000

March 30 No entry

April 13

Dividends Payable $22,470,000

Cash $22,470,000

7 0

3 years ago

The market price of a share of common stock is $55. The dividend just paid is $3, and the expected growth rate is 4%. Using the

Step2247 [10]

Answer:

r = 0.09672 or 9.672%

Explanation:

Using the constant growth model of dividend discount model, we can calculate the price of the stock today. The DDM values a stock based on the present value of the expected future dividends from the stock. The formula for price today under this model is,

P0 = D0 * (1+g) / (r - g)

Where,

D0 is the dividend paid recently

D0 * (1+g) is dividend expected for the next period /year

g is the growth rate

r is the required rate of return or cost of equity

55 = 3 * (1+0.04) / (r - 0.04)

55 * (r - 0.04) = 3.12

55r - 2.2 = 3.12

55r = 3.12 + 2.2

r = 5.32 / 55

r = 0.09672 or 9.672%

4 0

3 years ago

On January 1, Grouper Corp. had 61,600 shares of no-par common stock issued and outstanding. The stock has a stated value of $4

S_A_V [24]

Answer:

June 15

Dr Cash dividend 121,690

Cr Dividend payable 121,690

July 10

Dr Dividend payable 121,690

Cr Cash 121,690

Dec.15

Dr Cash dividend 138,513

Cr Dividend payable 138,513

Explanation:

Grouper Corp Journal entries

Date Accounts titles and Explanation Debit ($) Credit ($)

June 15

Dr Cash dividend 121,690

Cr Dividend payable 121,690

[($61,600+$12,150)*$1.65]

July 10

Dr Dividend payable 121,690

Cr Cash 121,690

Dec.15

Dr Cash dividend 138,513

Cr Dividend payable 138,513

[(61,600+12,150+5,400)*1.75]

8 0

3 years ago

Suppose a riskless project requires an initial investment of $10 and will generate a one-time cash inflow of $30 two years later

Evgesh-ka [11]

Answer:

D. The payback period is less than 2 years.

Explanation:

Discount rate 5%

0 1 2

intital investment -10

cash flow 0 30

Total cash flow -10 0 30

NPV 17.21

IRR 73%

Therefore, The NPV is 17.21 and is positive, the statement is True.

IRR > 50%, Therefore the statement made is True

Accounting rate of return = {[(30 - 10)/10]^(1/2)} - 1

= 41% > 0

Therefore, The statement made is true.

Payback period = 2 years, Therefore the statement made is NOT true.

7 0

3 years ago