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Ludmilka [50]
3 years ago
13

Today is your 20th birthday, and your parents just gave you $5,000 that you plan to use to open a stock brokerage account. You p

lan to add $500 to the account each year on your birthday. Your first $500 contribution will come one year from now on your 21st birthday. Your 45th and final $500 contribution will occur on your 65th birthday. You plan to withdraw $5,000 from the account five years from now on your 25th birthday to take a trip to Europe. You also anticipate that you will need to withdraw $10,000 from the account 10 years from now on your 30th birthday to take a trip to Asia. You expect that the account will have an average annual return of 12%. How much money do you anticipate that you will have in the account on your 65th birthday, following your final contribution
Business
1 answer:
Alex Ar [27]3 years ago
5 0

Answer:

You anticipate that you will have $432,522 in the account on your 65th birthday, following your final contribution.

Explanation:

To calculate this, we use the formula for calculating the future value (FV) and FV of ordinary annuity as appropriate as given below:

FVd = D * (1 + r)^n ......................................................................... (1)

FVo = P * {[(1 + r)^n - 1] ÷ r} ...................... (2)

Where,

FVd = Future value of initial deposit or balance amount as the case may be = ?

FVo = FV of ordinary annuity starting from a particular year = ?

D = Initial deposit = $5,000

P = Annual deposit =s $500

r = Average annual return = 12%, or 0.12

n = number years = to be determined as necessary

a) FV in five years from now

n = 5 for FVd

n = 4 for FVo

Substituting the values into equations (1) and (2), we have:

FVd = $5,000 * (1 + 0.12)^5 = $8,812

FVo = $500 * {[(1 + 0.12)^4 - 1] ÷ 0.12} = $2,390

FV5 = Total FV five years from now = $8,812 + $2,390 = $11,201

FVB5 = Balance after $5,000 withdrawal  in year 5 = $11,201 - $5,000 = $6,201.

b) FV in 10 years from now

n = 10 - 5 = 5 for both FVd and FVo

Using equations (1) and (2), we have:

FV of FVB5 = $6,201 * (1 + 0.12)^5 = $10,928

FVo = $500 * {[(1 + 0.12)^5 - 1] ÷ 0.12} = $3,176

FV10 = Total FV 10 years from now = $10,928 + $3,176 = $14,104

FVB10 = Balance after $10,000 withdrawal  in year 10 = $14,104 - $10,000 = $4,104

c) FV in 45 years from now

n = 45 - 10 = 35 for both FVd and FVo

Using equations (1) and (2), we have:

FV of FVB10 = $4,104 * (1 + 0.12)^35 = $216,690

FVo = $500 * {[(1 + 0.12)^35 - 1] ÷ 0.12} = $215,832

FV45 = Total FV 45 years from now = $216,690 + $215,832 = $432,522

Conclusion

Therefore, you anticipate that you will have $432,522 in the account on your 65th birthday, following your final contribution.

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Pineapple Motor Company manufactures two types of speciality electric motors, a commercial motor and a residential motor, throug
Usimov [2.4K]

Answer:

a. Single Plant wide  Factory Overhead  Rate = $ 140 per machine hour

Overhead Rate of  Assembly Department $ 120 per machine hour

Overhead Rate of  Testing Department=    $ 150 per unit per machine hour.

Total Overhead per Unit    Commercial  $ 588      Residential $  462      

Explanation:

Pineapple Motor Company

Assembly Department  Factory Overhead 360,000

Testing Department  Factory Overhead 900,000

Total  Factory Overhead 1,260,000

Direct machine hours were estimated as follows:

Assembly Department 3,000 hours

Testing Department 6,000

Total 9,000 hours

                                      Commercial              Residential

Assembly Department       1.4 dmh                    1.1 dmh

Testing Department             2.8                           2.2

Total machine hours per unit 4.2 dmh           3.3 dmh

Single Plant wide  Factory Overhead  Rate = Total  Factory Overhead 1,260,000/Total 9,000 hours

a. Single Plant wide  Factory Overhead  Rate = $ 140 per machine hour

Overhead Allocated to Assembly Department = No of Hours * Rate

                      = 3000  * $ 140 = $ 420,000

Overhead Allocated to Testing Department = No of Hours * Rate

                      = 6000  * $ 140 = $ 840,000

b. Overhead Rate of  Assembly Department = Factory Overhead / Machine Hours= 360,000/3,000 hours = $ 120 per machine hour

                     

Overhead Rate of  Testing Department=   Factory Overhead / Machine Hours=  900,000/ 6000 hours=  $ 150 per unit per machine hour.

Overhead Allocated

                                         Commercial              Residential

Assembly Department       1.4 *120                   1.1 dmh *120

                                               168                          132

Testing Department             2.8*150                    2.2*150

<u>                                                420                             330                    </u>

<u>Total Overhead per Unit     $ 588                       $  462              </u>

c. ABC approach is better as it gives an estimate of the overhead per unit both for the Commercial and Residential department using the assembly and testing overheads rates separately. The single plant wide rate gives a mere estimate of the overall costs.

3 0
3 years ago
The 2016 annual report for Mega Mills disclosed that 1 billion shares of common stock have been authorized. At the end of 2015,
Ainat [17]

Answer:a. Total common stock issued is 750 millions

b. In treasury is 109 million

c. Outstanding 750 million.

Explanation:

Issued shares referred to the total amount of authorised shares that has been issued to the public for subscription.

Treasury stock refers to parts of the issued stock that are held up for the ownership of the issuing company.

Outstanding stock refers to the total number of stock issued and fully paid for from the issued stock.

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3 years ago
Owner Shan Mu is considering franchising her Noodles by Mu restaurant concept. She believes people will pay $ 10.00 for a large
denpristay [2]

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

She believes people will pay $ 10.00 for a large bowl of noodles. Variable costs are $ 5.00 per bowl. Mu estimates monthly fixed costs for a franchise at $9,000

First, we need to calculate the break-even point in dollars:

Break-even point (dollars)= fixed costs/ contribution margin ratio

Break-even point (dollars)= 9,000/ [(10 - 5)/10]= $18,000

<u>To determine whether it is convenient to the franchisees, we need to calculate the margin of safety in dollars and, compare it to a break-even point in dollars with the desired income:</u>

<u />

Break-even point (dollars)= (fixed costs + desired income)/ contribution margin ratio

Break-even point (dollars)= (9,000 + 25,500) / 0.5= $69,000

Margin of safety=(current sales level - break-even point)

Margin of safety= 96,500 - 69,000= $27,500

It is a good business opportunity for franchisees.

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The minimum wage law ___________________ a) has a significant effect on the unemployment rate since a large part of the labor fo
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Answer:

a) has a significant effect on the unemployment rate since a large part of the labor force earns the minimum wage.

Explanation:

The minimum wage law ensures that all employees have a minimum income to live with dignity. Although there is a big debate among economists, the liberal current suggests that the minimum wage law has a major impact on the unemployment rate, especially among the poorest. According to these economists, the minimum wage is instituted above the productivity level of most people, which causes companies to lose efficiency. If wages were fluctuating, according to market law, more workers would probably be hired for wages tied to their productivity. Therefore, among the options, the first seems to be the most correct.

3 0
3 years ago
Raymond Chandler wrote classic American detective stories. By always using certain roles for his characters and props that were
OleMash [197]

Answer:

Cultural formula

Explanation:

Cultural formula can be described as a situation there is tend to a consistent occurrence of certain roles and props in a series of media events.

Cultural formula can be employed in a novel through the use of certain roles for characters and props that go along with the genre.

Therefore, Chandler's novels followed a cultural formula.

8 0
3 years ago
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