Given:
Down payment = 10% of total cost of the house = $50,000
Mortgage loan amount = $450,000
Term = 30 years
Interest rate = 9% APR (Annual Percentage Rate)
Payments = Monthly
First payment due = One month after purchase of house
After 10 years, new mortgage payments = $4,700
Step-by-step solution:
Calculate the total cost of the house:
The down payment is 10% of the total cost of the house.
So, 10% of the cost of the house = $50,000
Or, the cost of the house = $50,000 x 10 = $500,000
The total cost of the house is $500,000.
Calculate the monthly interest rate and the number of payments per year:
The annual interest rate is 9%.
So, the monthly interest rate is 9% / 12 = 0.75%.
The payments are monthly, so the number of payments per year is 12.
Calculate the original monthly payment:
Using the formula for the present value of an annuity, we can find the original monthly payment.
PV = PMT x (1 - (1 + r/n)^(-nt)) / (r/n)
Here, PV = $450,000, PMT is the original monthly payment, r is the annual interest rate (0.09), n is the number of times interest is compounded per year (12), and t is the time in years (30).
Substituting the values, we get:
$450,000 = PMT x (1 - (1 + 0.09/12)^(-12*30)) / (0.09/12)
This equation can be solved for PMT using a financial calculator or a spreadsheet software. The original monthly payment comes out to be $3,620 (rounded off to the nearest dollar).
Calculate the remaining time to pay off the mortgage:
After ten years, the borrower decides to make larger monthly payments of $4,700. We can use the present value of an annuity formula again to find the remaining time to pay off the mortgage.
PV = PMT x (1 - (1 + r/n)^(-nt)) / (r/n)
Here, PV = $450,000, PMT = $4,700, r = 0.09, n = 12, and we need to find t.
Substituting the values, we get:
$450,000 = $4,700 x (1 - (1 + 0.09/12)^(-12t)) / (0.09/12)
This equation can be solved for t using a financial calculator or a spreadsheet software. The value of t comes out to be approximately 11.8 years (rounded off to the nearest tenth of a year).
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Consider the following project. Using Discounted Payback Period method (10% rate), how long will it take to recover the investment?
Investment
Profit
1100l
-4000
0
1
2
1100
1100
Year
3
4
5
6
1100
1100
1100
3.36 years
4.25 years
3.64 years
04.75 years
To calculate the discounted payback period for the given project, we need to consider the cash flows and discount them to their present value using the given discount rate of 10%. Here is the calculation:
Year 0: Investment = -$4000 (outflow)
Year 1: Profit = $1100 (inflow) discounted to Year 0 = $1000 [1100 / (1 + 0.10)^1]
Year 2: Profit = $1100 (inflow) discounted to Year 0 = $826.45 [1100 / (1 + 0.10)^2]
Year 3: Profit = $1100 (inflow) discounted to Year 0 = $751.32 [1100 / (1 + 0.10)^3]
Year 4: Profit = $1100 (inflow) discounted to Year 0 = $683.02 [1100 / (1 + 0.10)^4]
Year 5: Profit = $1100 (inflow) discounted to Year 0 = $620.92 [1100 / (1 + 0.10)^5]
Year 6: Profit = $1100 (inflow) discounted to Year 0 = $564.47 [1100 / (1 + 0.10)^6]
Now we calculate the cumulative discounted cash flows:
Cumulative cash flow at Year 0: -$4000
Cumulative cash flow at Year 1: -$4000 + $1000 = -$3000
Cumulative cash flow at Year 2: -$3000 + $826.45 = -$2173.55
Cumulative cash flow at Year 3: -$2173.55 + $751.32 = -$1422.23
Cumulative cash flow at Year 4: -$1422.23 + $683.02 = -$739.21
Cumulative cash flow at Year 5: -$739.21 + $620.92 = -$118.29
Cumulative cash flow at Year 6: -$118.29 + $564.47 = $446.18
The discounted payback period is the time it takes for the cumulative discounted cash flows to become positive. In this case, the discounted payback period falls between Year 5 and Year 6. To determine the exact year, we can interpolate:
Discounted payback period = Year 5 + (Positive cash flow in Year 5 / Positive cash flow in Year 6)
Discounted payback period = 5 + ($118.29 / $564.47) = 5 + 0.2096 ≈ 5.21 years
Therefore, using the discounted payback period method with a 10% discount rate, it will take approximately 5.21 years to recover the investment.
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Puppet Corporation began with an investment by shareholders of $29,000. 0. In its first year, the income earned was $2,900. What would the equity section of its balance sheet show at year end? b. In the second year, it had an income of $9,900 and a dividend of $3,900 was paid. What would the equity section of its balance sheet show at year end? c. In the third year, Puppet sold more shares for a value of $14,500, earned income of $5,900, and paid a dividend of $3,400. What would the equity section of its balance sheet show at year end?
The retained earnings would be $2,900, representing the income earned in the first year.
a. At the end of the first year, the equity section of Puppet Corporation's balance sheet would show the initial investment of $29,000 from the shareholders as the common stock. The retained earnings would be $2,900, representing the income earned in the first year.
b. At the end of the second year, the equity section of the balance sheet would show the common stock of $29,000, the retained earnings of $9,900 (income earned in the second year), and a dividend paid of $3,900. The retained earnings would be adjusted by subtracting the dividend paid.
c. At the end of the third year, the equity section of the balance sheet would show the common stock of $43,500 ($29,000 initial investment + $14,500 from the sale of additional shares). The retained earnings would be $12,500 ($9,900 income earned - $3,400 dividend paid).
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Pauli found a book on Finance in a garbage can. After reading it, he tells Silvio that if Silvio will give him $10,000 /year for five years with the first payment at the end of this year, then he will give Silvio $10,000 /year forever with the first payment occurring at the end of year 6. Silvio's next-best alternative (i.e., what he would do with his money if he didn't take Pauli's offer) is to loan the money to Christopher at 12% a) What NPV does Silvio get if he takes Pauli's offer? b) Should Silvio take Pauli's offer? c) Why or why not?
The answer to Silvio's investment decision depends on the specific cash flow values provided in the book on Finance. By calculating the net present value (NPV) of Silvio's investment options, we can determine the most favorable choice. If the NPV from Pauli's offer, considering the cash flows for five years and the perpetuity starting from year six, is greater than the NPV of loaning the money to Christopher at a 12% interest rate, Silvio should take Pauli's offer. Conversely, if the NPV from the loan to Christopher is greater, Silvio should choose his next-best alternative. The specific NPV comparison can be made based on the actual cash flow values provided.
To calculate the net present value (NPV) of Silvio's investment options, we need to discount the cash flows to their present value using an appropriate discount rate. Let's break down the information provided:
Silvio's next-best alternative is to loan the money to Christopher at a 12% interest rate. This implies that the discount rate for evaluating the cash flows is 12%. We will use this rate for our calculations.
a) NPV of Silvio's Investment with Pauli's Offer:
The cash flows from Pauli's offer are as follows:
Year 1: $10,000 (received at the end of the year)
Year 2: $10,000 (received at the end of the year)
Year 3: $10,000 (received at the end of the year)
Year 4: $10,000 (received at the end of the year)
Year 5: $10,000 (received at the end of the year)
Year 6 and onwards: $10,000 per year indefinitely (received at the end of each year)
To calculate the NPV, we need to determine the present value of each cash flow and sum them up. The present value of a cash flow is calculated using the formula:
PV = CF / (1 + r)^n
Where:
PV = Present Value
CF = Cash Flow
r = Discount Rate
n = Time period
Calculating the NPV:
Year 1: PV = $10,000 / (1 + 0.12)^1 = $10,000 / 1.12
Year 2: PV = $10,000 / (1 + 0.12)^2
Year 3: PV = $10,000 / (1 + 0.12)^3
Year 4: PV = $10,000 / (1 + 0.12)^4
Year 5: PV = $10,000 / (1 + 0.12)^5
For the infinite cash flows starting from Year 6, we can use the perpetuity formula:
PV = CF / r
Year 6 onwards: PV = $10,000 / 0.12
Summing up all the present values will give us the NPV.
b) To determine whether Silvio should take Pauli's offer, we compare the NPV obtained from the offer with the NPV of Silvio's next-best alternative, which is loaning the money to Christopher at a 12% interest rate.
c) If the NPV from Pauli's offer is greater than the NPV from the loan to Christopher, Silvio should take Pauli's offer. However, if the NPV from the loan to Christopher is greater, Silvio should choose his next-best alternative.
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Elon Tusk has a $100 million stock portfolio with a beta of 1.8. Mr. Tusk would like to use futures contracts on a stock index to hedge his portfolio risk, and make market risk (portfolio beta) as low as possible. The relevant stock index futures price is currently trading at 3,950 and the contract multiplier is $50 per point. What is the hedge that minimizes Mr. Tusk's stock portfolio risk?
Group of answer choices
Go long 312 stock index futures contracts
Go long 506 stock index futures contracts
Go long 911 stock index futures contracts
Go short 312 stock index futures contracts
Go short 506 stock index futures contracts
Go short 911 stock index futures contracts
Option (f), Mr. Tusk needs to go long 911 stock index futures contracts to minimize the risk in his stock portfolio. Hence, the correct option is Go long 911 stock index futures contracts.
h
We are given the following information:
Beta of the portfolio, βp = 1.8
Value of the stock index futures price, F = $3,950
Contract multiplier, c = $50 per point
We have to find the hedge that minimizes Mr. Tusk's stock portfolio risk.
We know that the formula for the number of futures contract that we need to use for hedging is:
Nf = (βp × Vp) / (c × F)
Where Nf is the number of futures contracts needed to hedge the portfolio,
Vp is the value of the portfolio,
βp is the beta of the portfolio,
F is the futures price, and c is the contract multiplier.
From the given information:
Value of the portfolio, Vp = $100 million
Number of futures contracts needed to minimize the portfolio risk:
Nf = (βp × Vp) / (c × F)
= (1.8 × $100,000,000) / ($50 × 3,950)
≈ 911.39
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A petition for the reorganization of a company has been filed.
The trustees estimate the firm's liquidation value, after considering costs, is $102 million.
Alternatively, the trustees, using the analysis of ta consulting firm, predict that the reorganized business will generate $18 million annual cash flows in perpetuity. The discount rate is 14%.
Calculate the present value if the company is alive:
The present value if the company is alive is $128.57 million. The calculation is based on the reorganization approach.
Given,
The liquidation value = $102 million
Annual cash flows= $18 million
Discount rate = 14%
We need to calculate the present value if the company is alive.
There are two approaches to solving this problem:
1. Liquidation approach
2. Reorganization approach
Liquidation approach
In the liquidation approach, the company is sold and the amount received from the sale is distributed to the creditors. The present value of the cash flows in this approach will be zero.
Present value (liquidation approach) = 0
Reorganization approach
In the reorganization approach, the company continues to operate and generate cash flows. The present value of the cash flows in this approach will be the present value of an annuity.
Present value (reorganization approach) = Annual cash flow/Discount rate
= 18/0.14
= $128.57 million
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None of the above (all of the above are correct). Question 2 Which of the following is not true? The bond's current yield is total annual coupon pay A bond's real interest rate reflects the interest rate the yield to maturity (VTM, I/Y in the financial calcu The bond's bid-ask spread refers to the spread betv higher the spread, the more difficult it will be to bur None of the above (all of the above are correct).
None of the above (all of the above are correct).
- The bond's current yield is the total annual coupon payment divided by the bond's current market price. This statement is true and reflects the formula for calculating the current yield.
- A bond's real interest rate reflects the interest rate adjusted for inflation. This statement is also true. The real interest rate takes into account the inflation rate to determine the actual return on the bond.
- The bond's bid-ask spread refers to the difference between the price at which a seller is willing to sell the bond (ask price) and the price at which a buyer is willing to buy the bond (bid price). The higher the spread, the more difficult it may be to execute a trade. This statement is correct as well.
Therefore, none of the statements are false, and all of them are correct.
A financial term for bonds and other fixed-interest securities like gilts is the current yield, interest yield, income yield, flat yield, market yield, mark to market yield, or running yield.
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Research Paper: This is a graduate course and students will be expected to research and write papers summarizing in their own words what they have found on current topics from the weekly readings. Research is a theoretical review of relevant literature and application of findings in the literature to a topic related to a specific industry, field, or business problem.
Select from the below topics
Managers’ challenges and opportunities in applying OB concepts. The three levels of analysis in this text’s OB model. Developing managers’ interpersonal skills also helps organizations attract and keep highperforming employees. Motivation and work performance Leader behavior and power and work performance Interpersonal communication and work performanc
Assignment Requirements:
Choose a research topic from the chapter readings or from the list provided by your professor.
Research/find a minimum at least four (4), preferably five (5) or more, different peer-reviewed articles on your topic from the University of the Cumberlands Library online business database. The article(s) must be relevant and from a peer-reviewed source. While you may use relevant articles from any time frame, current/published within the last five (5) years are preferred. Using literature that is irrelevant or unrelated to the chosen topic will result in a point reduction.
Write a four (4) to five (5) page double spaced paper in APA format discussing the findings on your specific topic in your own words. Note - paper length does not include cover page, abstract, or references page(s).
Structure your paper as follows:
Cover page
Overview describing the importance of the research topic to current business and professional practice in your own words.
Purpose of Research should reflect the potential benefit of the topic to the current business and professional practice and the larger body of research.
Review of the Literature summarized in your own words. Note that this should not be a "copy and paste" of literature content, nor should this section be substantially filled with direct quotes from the article. A literature review is a summary of the major points and findings of each of the selected articles (with appropriate citations). Direct quotations should be used sparingly. Normally, this will be the largest section of your paper (this is not a requirement; just a general observation).
Practical Application of the literature. Describe how your findings from the relevant research literature can shape, inform, and improve current business and professional practice related to your chosen topic.
Conclusion in your own words
References formatted according to APA style requirements
Interpersonal communication and work performanceThis paper aims to identify the importance of interpersonal communication in the workplace and how it affects work performance.
The topic of interpersonal communication and its relationship with work performance is a popular research area in the field of organizational behavior. The importance of interpersonal communication in the workplace is evident from the fact that the effectiveness of an organization's operations depends on its ability to communicate effectively.
Moreover, effective interpersonal communication can improve the quality of employee relationships, trust, and cooperation, and enhance employee engagement levels.Research indicates that interpersonal communication skills are essential for employees to succeed in their respective job roles. Additionally, organizations should invest in training programs to help employees develop interpersonal communication skills.
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7. Of the 1435 people attending a conference, 380 had black hair and 290 had brown eyes. If 1030 people had neither black hair nor brown eyes, how many people attending the conference had both black hair and brown eyes?
(A) 250
(B) 255
(C) 270
(D) 260
(E) 265
The number of people attending the conference who have both black hair and brown eyes is 265. This is determined using the principle of inclusion-exclusion, where we subtract the number of people with neither black hair nor brown eyes from the total number of attendees and the individual counts of people with black hair and brown eyes. By applying the formula N(A ∩ B) = N(A) + N(B) - N(A ∪ B), we find that N(A ∩ B) = 380 + 290 - (1435 - 1030) = 265. Hence, the correct answer is (E) 265.
To determine the number of people attending the conference who have both black hair and brown eyes, we can use the principle of inclusion-exclusion.
Let's denote:
A = Number of people with black hair
B = Number of people with brown eyes
N = Total number of people attending the conference
N(A) = Number of people with black hair or brown eyes
According to the principle of inclusion-exclusion, we have the formula:
N(A ∪ B) = N(A) + N(B) - N(A ∩ B)
We know that:
N = 1435 (total number of people)
N(A) = 380 (number of people with black hair)
N(B) = 290 (number of people with brown eyes)
N(A ∪ B) = N - 1030 (number of people with neither black hair nor brown eyes)
Substituting these values into the formula, we can solve for N(A ∩ B):
N(A ∩ B) = N(A) + N(B) - N(A ∪ B)
N(A ∩ B) = 380 + 290 - 1435 + 1030
N(A ∩ B) = 265
Therefore, the number of people attending the conference who have both black hair and brown eyes is 265. Thus, the correct answer is (E) 265.
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you have the opportunity to buy a perpetuity that pays $21,262 annually. Your required rate of return on this investment is 24 percent. You should be essentially indifferent to buying or not buying the investment if it were offered at a price of O $90,591.67 O $92,591.67 O $86,591.67 O $89,591.67 O $88,591.67 A real estate investment has the following expected cash flows: Year Cash Flow 1 $6,196 $47,917 $33,033 $40,161 The discount rate is 5.8 percent. What is the investment's present value? 23 4 O $106,608.90 O $109,608.90 O $105,608.90 O $107,608.90 O $108,608.90
Here are the solutions to the given problems:1. The present value of the perpetuity is obtained by the formula:PV = PMT / rWhere,PV = Present value PMT = Annuity paymentr = Required rate of returnPV = 21,262 / 0.24= $88,591.67.
Therefore, the investment should be bought at $88,591.67.2. The present value of the cash flows is obtained by the formula:PV = CF1 / (1 + r)^1 + CF2 / (1 + r)^2 + CF3 / (1 + r)^3 + CF4 / (1 + r)^4Where,PV = Present valueCF1, CF2, CF3, CF4 = Cash flows in year 1, 2, 3, and 4r = Discount ratePV = 6,196 / (1 + 0.058)^1 + 47,917 / (1 + 0.058)^2 + 33,033 / (1 + 0.058)^3 + 40,161 / (1 + 0.058)^4= $106,608.90Hence, the investment's present value is $106,608.90.
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ase: Alegent Health Alegent Health, based in Omaha, Nebraska, is a non-profit health-care system composed of seven hospitals with about 2,000 beds and more than 200 clinic and outpatient locations, 1,200 physicians, and more than 7,500 other employees who work throughout the organization. Several years ago, Alegent recognized that HR issues needed "acute care treatment." Turnover rates of 24%, coupled with more than 500 unfilled positions, were costing the firm more than $15 million annually. Four years later, the turnover rates had declined to 12% and open positions had dropped to fewer than 100. Because of their improvements, Alegent's HR practices, and especially its retention successes, won several local and national awards. Alegent was named one of the "Best Places to Work in Omaha." The award was based on surveys of employees that asked about credibility, respect and fairness, pride, and camaraderie. Alegent also received a Workforce Management Optimas Award in the financial impact category for its success at recruiting and retaining key staff. Winning these awards indicates that Alegent is clearly being effective with its HR activities. Specifically regarding retention efforts, Alegent created an Employee Retention Task Force whose focus was to decrease turnover and increase employee satisfaction. The task force identified several strategies to be used. One program illustrates how Alegent approached retention of nurses. The Nursing Residence Program has caught national attention. Each resident (or new nurse) is paired with an experienced nurse or "preceptor" based on interests, personality, and so on. Also, a mentor outside the nursing department adds support and encouragement to individuals. Nursing staff meet monthly for training. In addition, they can visit various other departments (pediatrics, cardiology, etc.) in which they may have career interests. Nurses interested in management can shadow the department director to see how the department is managed. Returning nurses who have been out of the field five or more years are enrolled, retrained, and paired with recently finished residents. Alegent Health is the exception to the turnover levels in nursing. Compared with the U.S. health-care industry rate of 20%, Alegent's turnover rate of 7.6% is exceptionally low. Another key to aiding nursing recruitment and retention is an extensive training and development program. Many different short courses and classes are provided to Alegent employees at no cost. As part of this program, Alegent pays up to $20,000 for employees selected for a career advancement program to obtain nursing degrees. Questions 1. Define the difference between job satisfaction and engagement. 2. Discuss the recommended retention practices from our text that were used by Alegent in this scenario.
By implementing these retention practices, Alegent Health was able to significantly reduce turnover rates, improve employee satisfaction, and create a supportive and engaging work environment.
1. Job satisfaction and engagement are two related but distinct concepts. Job satisfaction refers to an individual's overall contentment with their job and the extent to which their expectations and needs are met in the workplace. It is primarily focused on the emotional and cognitive assessment of one's job and can be influenced by various factors such as work environment, compensation, and job security.
On the other hand, engagement refers to the level of involvement, enthusiasm, and commitment an employee has towards their work and the organization. It is characterized by a sense of dedication, energy, and involvement in one's job tasks. Engaged employees are more likely to go the extra mile, be proactive, and have a strong sense of purpose and connection to their work.
2. Alegent Health implemented several recommended retention practices from the text to improve employee satisfaction and decrease turnover:
a) Employee Retention Task Force: Alegent established a task force dedicated to decreasing turnover and increasing employee satisfaction. This proactive approach shows the organization's commitment to addressing retention challenges systematically.
b) Mentoring and Training Programs: Alegent's Nursing Residence Program paired new nurses with experienced preceptors and mentors to provide support, guidance, and career development opportunities. The monthly training sessions and exposure to various departments and specialties enhance nurses' engagement and professional growth.
c) Extensive Training and Development: Alegent offers a range of free courses and classes to its employees, including career advancement programs where the organization covers the cost of nursing degrees.
d) Recognition and Awards: Alegent's efforts to improve HR practices and retention were recognized through local and national awards, such as being named one of the "Best Places to Work" and receiving the Workforce Management Optimas Award.
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Guest Service Agent Mohit: Good evening Mrs. Brandt, welcome back. It's nice to see you. How was your flight from Calgary today? Colleen Brandt: It was uneventful, just the way I like them. GSA Mohit: That's great to hear. (As he slides her the key package) We have everything all set for you this week, your favourite room number is all ready for you and the concierge has confirmed your morning taxi reservations with Yellow Cab company each morning at 7:45am. Just confirming that you flying out on Thursday, so you are here for 3 nights this week? Colleen Brandt: Yes the usual. GSA Mohit: I'm here all evening if I can be of any assistance Mrs. Brandt, enjoy your stay. Colleen Brandt: Thank you Mohit and no welcome call is needed, I'm sure all will be great. Activity: What were some differences between Mrs. Brandt's check in and some of the others that you have witnessed during the Arrival stage of the guest cycle? → Activity What were some differences between Mrs. Brandt's check in and some of the others that you have witnessed during the Arrival stage of the guest cycle?
Based on the given conversation, some differences between Mrs. Brandt's check-in and other check-ins during the Arrival stage of the guest cycle could be:
1. Personalized Welcome: GSA Mohit greeted Mrs. Brandt by name, acknowledging her as a returning guest. This personalized approach may not be common for other guests who are not regular visitors.
2. Familiarity with Preferences: GSA Mohit mentioned that Mrs. Brandt's favorite room number was ready for her. This indicates that the hotel staff is familiar with her preferences, which may not be the case for other guests who are not regulars.
3. Pre-arranged Services: GSA Mohit confirmed Mrs. Brandt's pre-arranged morning taxi reservations with Yellow Cab company. This suggests that the hotel had taken proactive steps to arrange services for her convenience. Other guests may not have such pre-arranged services.
4. Duration of Stay: GSA Mohit confirmed that Mrs. Brandt would be staying for three nights, indicating a longer duration compared to guests who may be staying for a shorter period.
5. No Welcome Call: Mrs. Brandt mentioned that she did not require a welcome call as she was confident that everything would be great. This indicates her level of familiarity and trust in the hotel's services, which may differ from other guests who may request or expect a welcome call.
These differences highlight the personalized and tailored experience provided to Mrs. Brandt based on her previous stays and established preferences. Other guests may have different needs, preferences, and levels of familiarity with the hotel, resulting in variations in their check-in experiences during the Arrival stage of the guest cycle.
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You Are Saving For Retirement. To Live Comfortably, You Decide You Will Need To Save $4 Million By The Time You Are 65 . Today Is Your 21 St Birthday, And You Decide, Starting Today And Continuing On Every Birthday Up To And Including Your 65 Th Birthday, That You Will Put The Same Amount Into A Savings Account. If The Interest Rate Is 4%, How Much Must You
you would need to save approximately $36,163.45 each year to reach your goal of $4 million by the time you are 65.
To calculate the amount you need to save each year, we can use the future value of an ordinary annuity formula. The formula is:
FV = PMT * ((1 + r)^n - 1) / r
Where:
FV = Future value (amount you need to save)
PMT = Payment (amount you will save each year)
r = Interest rate per period (4% = 0.04)
n = Number of periods (65 - 21 = 44)
Plugging in the values, we get:
$4,000,000 = PMT * ((1 + 0.04)^44 - 1) / 0.04
Now we can solve for PMT:
$4,000,000 * 0.04 = PMT * ((1 + 0.04)^44 - 1)
$160,000 = PMT * (1.04^44 - 1)
Now, we can calculate (1.04^44 - 1) = 4.4255679:
$160,000 = PMT * 4.4255679
Dividing both sides by 4.4255679, we get:
PMT = $160,000 / 4.4255679
PMT ≈ $36,163.45
Therefore, you would need to save approximately $36,163.45 each year to reach your goal of $4 million by the time you are 65.
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An ADR is variety of an interest rate swap, where a foreign
company can secure debt financing in their home curency while
hedging the interest rate risk.
TRUE
FALSE
The statement "An ADR is variety of an interest rate swap, where a foreign company can secure debt financing in their home curency while
hedging the interest rate risk" is FALSE.
An ADR (American Depositary Receipt) is not a variety of an interest rate swap. ADRs are financial instruments that allow foreign companies to list their shares on U.S. stock exchanges and trade them in U.S. dollars. They provide a way for investors in the United States to invest in foreign companies without needing to directly purchase shares on foreign exchanges.
On the other hand, an interest rate swap is a financial derivative in which two parties agree to exchange interest rate cash flows based on a notional principal amount. It is commonly used to manage or hedge interest rate risk, allowing one party to exchange a fixed interest rate for a floating interest rate or vice versa.
While both ADRs and interest rate swaps are financial instruments, they serve different purposes. ADRs facilitate cross-border equity investments, while interest rate swaps are used to manage interest rate exposure.
Therefore, the statement that an ADR is a variety of an interest rate swap is false.
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Suppose you plan to retire at age 70, and you want to be able to withdraw an amount of $87,000 per year on each birthday from age 70 to age 100 (a) total of 31 withdrawals). If the account which contains your savings earns 6.7% per year simple interest, how much money needs to be in the account by the time you reach your 70th birthday? (Answer to the nearest dollar.) Hint This can be solved as a 30-year ordinary annuity plus one withdrawal at age 70, or as a 31-year annuity due.
Therefore, you would need approximately $1,287,365 in the account by the time you reach your 70th birthday to be able to withdraw $87,000 per year from age 70 to age 100
To calculate the amount of money needed in the account by the time you reach your 70th birthday, we can treat this as a 31-year annuity due. We need to find the present value of 31 withdrawals of $87,000 each, discounted at an annual interest rate of 6.7%.
Using the formula for the present value of an annuity due:
PV = PMT * ((1 - (1 + r)^(-n)) / r) * (1 + r)
Where:
PV = Present value (amount of money needed in the account)
PMT = Payment per period ($87,000 per year)
r = Interest rate per period (6.7% per year)
n = Number of periods (31 years)
Substituting the values into the formula:
PV = 87,000 * ((1 - (1 + 0.067)^(-31)) / 0.067) * (1 + 0.067)
Calculating the above expression, we find:
PV ≈ $1,287,365
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All of the following statements concerning itemized deductions are correct EXCEPT (A) All itemized deductions are below-the-line deductions. (B) A taxpayer can either itemize deductions or claim the standard deduction. (C) Itemized deductions are claimed on Schedule B of IRS Form 1040. (D) The standard deduction amounts are indexed annually for inflation
All of the following statements concerning itemized deductions are correct EXCEPT (C) Itemized deductions are claimed on Schedule B of IRS Form 1040.The correct option is C, as itemized deductions are claimed on Schedule A, not Schedule B of IRS Form 1040.
An itemized deduction is an expense incurred by a taxpayer and authorized by the Internal Revenue Service (IRS) that is subtracted from taxable income. The majority of itemized deductions are classified as above-the-line or below-the-line deductions.Above-the-line deductions are subtracted from gross income to get adjusted gross income, while below-the-line deductions are subtracted from adjusted gross income to get taxable income.
Itemized deductions are classified as below-the-line deductions, since they are subtracted from adjusted gross income. A taxpayer must choose between claiming the standard deduction and itemizing deductions; the taxpayer must claim the option that gives him the larger deduction.Standard deduction amounts are determined by the Internal Revenue Service and adjusted each year to account for inflation.
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A marketing manager wants an attractive packing for brand of toothpaste. The research advisor is suggesting a research using an experimental research design, the marketing manager wonders whether a research is required for this, and if so, is an experimental research design suitable for this purpose.
Questions: (a) How would you advice the marketing manager?
Yes, research is necessary, and a combination of qualitative and quantitative methods would be more suitable than an experimental research design for studying toothpaste packaging attractiveness.
I would advise the marketing manager that conducting research is indeed necessary for developing an attractive packaging for their brand of toothpaste. Research can provide valuable insights into consumer preferences, help identify trends in the market, and guide the decision-making process.
By understanding what attracts consumers and influences their purchasing decisions, the marketing manager can optimize the packaging design to maximize its appeal.
Regarding the suitability of an experimental research design, it may not be the most appropriate approach for studying packaging attractiveness. Experimental research typically involves manipulating variables and measuring their impact on an outcome.
However, in the context of packaging design, it might be challenging to manipulate variables in a controlled environment. Additionally, conducting experiments might be costly and time-consuming.
Instead, the marketing manager could consider utilizing a mix of qualitative and quantitative research methods. Qualitative research, such as focus groups or interviews, can provide rich insights into consumer perceptions and preferences regarding toothpaste packaging. These methods can help identify key themes and generate ideas for packaging design.
Once the qualitative data is collected, quantitative research can be employed to validate and quantify the findings. Surveys or questionnaires can be administered to a larger sample size to gather data on consumer preferences, rank different design options, and measure the impact of specific packaging elements on attractiveness.
In summary, conducting research is essential for developing an attractive packaging design for the toothpaste brand. Instead of an experimental research design, a combination of qualitative and quantitative research methods would be more suitable for gaining insights into consumer preferences and guiding the packaging design process.
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1. You are a recent Berkeley College graduate and you are working in the accounting department of Macy’s. Next week, you are required to attend an inventory meeting for the store located in the Paramus Park mall. You know this store well because you shop there frequently. One of the managers of the store feels that the men’s shoe department is unprofitable because the selection is poor, there are few sizes available, and there just aren’t enough shoes. The manager is pushing for a very large shoe inventory to make the department more desirable to shoppers and therefore more profitable. Explain in this discussion why it is good or bad to have a large inventory of shoeS
It is good to have a large inventory of shoes if there is a high demand for shoes in the store. This is because a larger inventory can ensure that customers can find the shoes they are looking for in the store.
If customers can find what they need in the store, they are more likely to make a purchase and be satisfied with their shopping experience. This can lead to increased sales and profitability for the store. However, having a large inventory of shoes can also be bad if there is not enough demand for shoes in the store. This is because a large inventory can tie up a lot of the store's cash in inventory that is not selling. This can lead to cash flow problems and decreased profitability for the store. Additionally, if the shoes are not selling, the store may be forced to discount them to move the inventory, which can lead to decreased margins and profitability.
Therefore, before increasing the shoe inventory in the store, it is important to determine whether there is a demand for shoes in the store. This can be done by analyzing sales data and customer feedback. If there is a demand for shoes, a larger inventory can be beneficial. However, if there is not a demand for shoes, it may be better to focus on improving the selection and availability of other products in the store.
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Hello, Need some help with this, I would like to do this in Excel and if you could please show the work, Thank you very much!!
You have just signed a contract to purchase your first home. Your purchase price is $300,000 and you plan to put 20% down. Calculate your monthly principal and interest payments for the life of the loan for:
• a 15-year mortgage at 2.875%
• a 30-year mortgage at 3.25%
Sure, I'd be happy to help! To calculate the monthly principal and interest payments for a mortgage in Excel, you can use the PMT function. Here are the steps:
Step 1: Calculate the loan amount: The loan amount is the purchase price minus the down payment. For this question, the loan amount is $240,000 ($300,000 x 0.8).
Step 2: Calculate the monthly interest rate: To calculate the monthly interest rate, you need to divide the annual interest rate by 12. For the 15-year mortgage at 2.875%, the monthly interest rate is 0.002395833 (= 0.02875 / 12). For the 30-year mortgage at 3.25%, the monthly interest rate is 0.002708333 (= 0.0325 / 12).
Step 3: Calculate the number of payments: To calculate the number of payments, you need to multiply the number of years by 12. For the 15-year mortgage, the number of payments is 180 (= 15 x 12). For the 30-year mortgage, the number of payments is 360 (= 30 x 12).
Step 4: Use the PMT function: In Excel, the PMT function is used to calculate the monthly payment for a loan. The syntax of the function is PMT(rate, nper, pv, [fv], [type]), where: rate = the monthly interest rate nper = the number of payments pv = the present value (loan amount)[fv] = the future value (optional, default is 0)[type] = the type of payment (optional, 0 for end of period, 1 for beginning of period) For the 15-year mortgage, the formula would be: PMT(0.002395833, 180, 240000). This gives a monthly payment of $1,609.36.For the 30-year mortgage, the formula would be: PMT(0.002708333, 360, 240000)This gives a monthly payment of $1,043.29.I hope that helps! Let me know if you have any questions.
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As you have become well-acquainted with the role tone plays in effective communication, through the reading and our discussion, I would like you to share an experience you have had when an inappropriate tone was a barrier to effective communication. Please keep your responses to between 250-300 words.
Experience: In a professional setting, I once had a colleague who consistently used an inappropriate and condescending tone during team meetings.
Their tone conveyed a sense of superiority and belittlement towards others' ideas and contributions. This created a significant barrier to effective communication within our team.
The inappropriate tone used by my colleague had several negative effects on our communication dynamics. Firstly, it stifled open discussion and collaboration. When someone used a condescending tone, team members became hesitant to share their thoughts or propose new ideas. They feared being ridiculed or dismissed, which limited the diversity of perspectives and stifled creativity .
Secondly, the inappropriate tone eroded trust and created a hostile work environment. The demeaning language used by my colleague created a sense of resentment and frustration among team members. It created an "us versus them" mentality, hindering effective teamwork and cooperation.
Moreover, the inappropriate tone also hindered problem-solving and conflict resolution. Instead of engaging in constructive dialogue, discussions often devolved into defensive arguments and personal attacks. This not only wasted valuable time but also prevented us from reaching optimal solutions.
To address this issue, our team took several steps. Firstly, we openly discussed the impact of the inappropriate tone on our communication and acknowledged the need for change. Secondly, we implemented guidelines for respectful communication and encouraged everyone to speak up if they felt disrespected. This helped create a safe space for open dialogue.
Additionally, we provided feedback to the colleague, highlighting the negative impact of their tone and encouraging them to adopt a more respectful and inclusive approach. This required ongoing support and reminders to reinforce the importance of respectful communication.
In conclusion, the experience with an inappropriate tone taught me the significant role tone plays in effective communication. It highlighted the importance of fostering a respectful and inclusive environment where individuals feel comfortable expressing their ideas and perspectives without fear of judgment or ridicule. By addressing and rectifying inappropriate tone, we can enhance collaboration, trust, and overall team productivity.
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Equity markets are markets:____.
a. for stocks. .
b. of u.s. treasury bonds.
c. for aaa rated bonds.
d. for either stocks or bonds.
Equity markets are markets for either stocks or bonds.
So, the correct answer is option d. for either stocks or bonds.
Equity markets:
These markets refer to financial markets where securities representing ownership interests in companies are traded.
Stocks:
Equity markets primarily serve as markets for stocks.
Stocks, also known as equities, represent ownership stakes in publicly traded companies.
Investors can buy and sell shares of these companies in the equity market.
Bonds:
Equity markets can also include the trading of bonds.
Bonds are debt securities issued by governments or corporations to raise capital.
While equity markets are primarily associated with stocks, they can facilitate the trading of bonds as well.
U.S. Treasury bonds: U.S. Treasury bonds are a specific type of bond issued by the U.S. government.
While they can be traded in various markets, including the bond market, they can also be traded within equity markets.
AAA-rated bonds:
Equity markets can also accommodate the trading of AAA-rated bonds.
These bonds have the highest credit rating, indicating a low risk of default.
Investors can buy and sell these bonds in the equity market alongside stocks.
In summary, equity markets serve as markets for both stocks and bonds, including U.S.
Treasury bonds and AAA-rated bonds.
They provide a platform for investors to trade securities representing ownership or debt interests in companies.
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Ou have the following information for Horizon Manufacturing Corp:
. 20 million shares of common stock outstanding. The common stock currently sells for $12 per share and has a beta of 2.5
. 500,000 shares of 9% preferred stock outstanding (dividend payments equal 9% of $100 par).The preferred stock currently sells for $72 per share.
. 100,000 bonds with par value for each bond is $1,000. The yield to maturity of 10% per annum and the coupon rate is 16% per annum.
. Tax rate is 22%.
. The market risk premium (rm−r{RF}) is 9%.
. T-bills are yielding 3%.
Suppose that the you are provided with the following capital structure weights: 60% for equity, 30% for debt, and 10% for preferred stock. Write out your equation(s) clearly and show your input(s).
Suppose that another company (with the same tax rate) has 18% for cost of equity, 12% for cost of debt. The weight of equity is 80% and the weight of debt is 20%. The company does not use any preferred stock. Calculate the weighted average cost of capital for this company.
The required answer is the weighted average cost of capital for this company is 17.94%.
To calculate the weighted average cost of capital (WACC) for the given company, to calculate the cost of equity, cost of debt, and the cost of preferred stock.
1. Cost of Equity (Re):
The formula for cost of equity is Re = Rf + beta * (Rm - Rf), where:
- Rf is the risk-free rate (T-bills yield) = 3%
- Beta is the systematic risk of the stock = 2.5
- Rm is the market risk premium = 9%
Plugging in the values, Re = 3% + 2.5 * 9% = 24.5%
2. Cost of Debt (Rd):
The formula for cost of debt is Rd = Yield to maturity of bonds * (1 - Tax rate), where:
- Yield to maturity of bonds = 10%
- Tax rate = 22%
Plugging in the values, we get Rd = 10% * (1 - 22%) = 7.8%
3. Cost of Preferred Stock (Rp):
The cost of preferred stock is simply the preferred stock dividend yield, which is given as 9% of the preferred stock's par value.
Plugging in the values, we get Rp = 9%
Now, calculate the WACC using the capital structure weights provided:
Weighted Average Cost of Capital (WACC) = (Weight of Equity * Cost of Equity) + (Weight of Debt * Cost of Debt) + (Weight of Preferred Stock * Cost of Preferred Stock)
Using the given weights:
- Weight of Equity = 60%
- Weight of Debt = 30%
- Weight of Preferred Stock = 10%
Plugging in the values,
WACC = (60% * 24.5%) + (30% * 7.8%) + (10% * 9%)
Calculating the weighted average cost of capital:
WACC = 0.60 * 0.245 + 0.30 * 0.078 + 0.10 * 0.09
WACC = 0.147 + 0.0234 + 0.009
WACC = 0.1794 or 17.94%
Therefore, the weighted average cost of capital for this company is 17.94%.
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Why should corporations and their management be concerned with corporate social responsibility?
Corporate Social Responsibility (CSR) refers to the ethical and accountable practices that corporations implement to ensure they meet the needs of the society. CSR focuses on taking responsibility for the impact of a company's actions on the community and the environment.Corporations and their management should be concerned with corporate social responsibility for several reasons, as explained below:
1. Improved ReputationBy participating in CSR activities, corporations enhance their reputation, which leads to an increase in customer loyalty and employee satisfaction. Companies that portray a positive image through CSR activities can attract more investors and gain competitive advantages.
2. Competitive AdvantageCSR can offer companies a competitive advantage by enabling them to distinguish themselves from their competitors. Consumers prefer brands that give back to society and the environment. CSR programs can serve as a significant differentiator for customers.
3. Attraction of CustomersCSR is an essential part of any modern business that attracts customers. Consumers are becoming more socially conscious, and they prefer to buy products from companies that are socially responsible. Companies that adopt CSR principles can gain a competitive advantage in the market.
4. Positive Impact on SocietyCSR activities have a significant impact on society. They promote sustainable development and help address social issues such as poverty, inequality, and environmental degradation. Companies that engage in CSR activities can help improve the welfare of the community in which they operate.
5. Regulatory ComplianceCompanies that are socially responsible are more likely to comply with regulatory requirements. CSR practices help ensure that companies operate within the framework of the law, which promotes accountability and transparency.
6. Improved Business PerformanceCSR programs can improve business performance in several ways, such as improving employee morale, reducing risk, and increasing profitability. By supporting sustainable development, corporations can ensure the longevity of their business. The advantages of adopting CSR are numerous, and corporations and their management should prioritize it to guarantee they are accountable for the impact of their actions on society and the environment.
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Corporate social responsibility (CSR) has become a topic of concern among businesses and their management. CSR refers to the actions and strategies taken by companies to ensure they are socially accountable, ethical, and environmentally friendly.
It's all about the company's responsibility to the environment and society.Corporations and their management should be concerned about CSR for a variety of reasons. One of the main reasons is that it assists in the creation of a good reputation for the company. A company's good reputation is critical to its success and can attract new customers while retaining existing ones.
When a company is socially responsible, it is perceived as being concerned about its customers, employees, and the environment, which helps to improve its image.In addition, it can be beneficial to a company's bottom line. CSR can save a company money on energy and resource usage. Implementing environmentally friendly practices, such as recycling, reduces the amount of waste produced, saves energy, and lowers costs. Companies can also benefit from positive public relations and increased sales.
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Which of the following is defined as a distinctive word, symbol, sound, or design that a manufacturer stamps, prints, or otherwise affixes to the goods is produces so that they may be distinguished from other products on the market and their origins?
a. design patent
b. trade secret
c. trademark
d. copyright
The correct answer is c. Trademark.
A trademark is defined as a distinctive word, symbol, sound, or design that a manufacturer affixes to its goods in order to differentiate them from other products on the market and establish their origins.
It serves as a unique identifier for the source of the goods and helps consumers recognize and associate them with a particular brand or company. Trademarks play a crucial role in building brand recognition, protecting intellectual property rights, and preventing consumer confusion or deception.
They are registered with government authorities to obtain legal protection and exclusive rights to use the trademark in commerce.
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If demand in a perfectly competitive market is perfectly inelastic and supply is upward sloping, a specific tax placed on suppliers will:________
if demand in a perfectly competitive market is perfectly inelastic and supply is upward sloping, a specific tax placed on suppliers will be entirely borne by the suppliers and will not be passed on to consumers.
in a perfectly competitive market, the price is determined by the intersection of the demand and supply curves. when demand is perfectly inelastic, it means that consumers are unresponsive to changes in price. this implies that regardless of the price, consumers will continue to purchase the same quantity of the product.
on the other hand, if the supply curve is upward sloping, it indicates that suppliers require higher prices to produce and supply larger quantities of the product. in this scenario, a specific tax placed on suppliers will increase their cost of production, leading to a shift in the supply curve upward.
since demand is perfectly inelastic, the quantity demanded remains unchanged, and consumers are unwilling to pay a higher price. suppliers, they cannot pass on the tax to consumers by increasing the price because demand is insensitive to price changes.
as a result, the specific tax will directly reduce the suppliers' profits or returns. the entire burden of the tax falls on the suppliers, and consumers do not experience any increase in price or change in quantity purchased.
it's important to note that this analysis assumes a perfectly competitive market with ideal conditions, such as perfect information and no barriers to entry or exit. in real-world markets, the impact of taxes can be more complex, and the burden may be shared between suppliers and consumers depending on the elasticity of demand and supply.
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What is the profitability index of a project that has an initial cash outflow of $600, an inflow of $250 for the next 3 years and a cost of capital of 10 percent?
The profitability index of the project, considering an initial cash outflow of $600, inflows of $250 for the next 3 years, and a cost of capital of 10 percent, is approximately 1.037.
The profitability index is a financial metric used to assess the profitability of an investment project. It is calculated by dividing the present value of cash inflows by the present value of cash outflows. In this case, the initial cash outflow is $600, and there are inflows of $250 for each of the next 3 years. To calculate the present value of cash flows, we need to discount them using the cost of capital, which is 10 percent.
The present value of the inflows can be calculated using the formula:
Present Value = Cash Inflow / (1 + Cost of Capital)^n
Calculating the present value of each inflow and summing them gives us:
Present Value of Inflows = $250 / (1 + 0.10)^1 + $250 / (1 + 0.10)^2 + $250 / (1 + 0.10)^3
= $227.27 + $206.61 + $187.83
= $621.71
The profitability index is then calculated as:
Profitability Index = Present Value of Inflows / Initial Cash Outflow
= $621.71 / $600
≈ 1.037
Therefore, the profitability index of the project is approximately 1.037, indicating that the project has a positive value and is expected to generate a return higher than the cost of capital.
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The Microsoft antitrust case covered in youn textbook embodies many of the gray areas in restrictive practices. Antitrust regulators accused Microsoft of numerous offenses. What was the end result? Microsoft appealed a federal court decision to break up the company and reached a settlement with the government that it would end its restrictive practices. Microsoft won and its practices were not classified as restrictive. The federal government regulators finally dropped their case because the case was too complex to prove. The federal government won its case, and Microsoft was broken into several smaller companies. Your textbook covered 4 possible ways to deal with a natural monopoly. Which approach would be best for consumers? Regulators would split the monopolist into two competing firms. Regulators would allow the monopolist to continue with no government regulation. Regulators would force the monopolist to set its price equal to its marginal cost. Let the natural monopoly charge enough to coverits average costs and earn a normal rate of profit. In cost plus regulation, regulators calculated the average cost of production, added in an amount for the normal rate of profit the firm shouid expect to earn, and set the price for consumers accordingly. In price cap regulation, the regulator sets a price that the firm can charge over the next few years. What is the problem of price cap regulation? It will not work if the price regulators set new prices cvery six months. Low level managers will have too much power. It will not work if the price regulators set the price cap unrealistically low. It will cause long term certainty in the market.
In the Microsoft antitrust case, the end result was that Microsoft reached a settlement with the government, agreeing to end its restrictive practices.
The federal government regulators dropped their case due to its complexity and the difficulties in proving the allegations. Therefore, Microsoft's practices were not classified as restrictive, and the company did not face a breakup.
Regarding the approach to dealing with a natural monopoly, the best approach for consumers would be to force the monopolist to set its price equal to its marginal cost. This approach ensures that the monopolist charges a price that reflects the actual cost of production and does not allow for excessive profits. By setting the price equal to the marginal cost, the monopolist operates more efficiently and provides goods or services at a fairer price for consumers.
The problem with price cap regulation is that it will not work if the price regulators set the price cap unrealistically low. If the price cap is set too low, it may lead to underinvestment, reduced quality, or even exit of the firm from the market. Unrealistically low price caps can create financial difficulties for the regulated company and hinder its ability to provide adequate services.
Therefore, setting the price cap at a reasonable level is crucial to ensuring the long-term certainty and sustainability of the market while balancing the interests of both consumers and the regulated firm.
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NPV, IRR, and sensitivity analysis.Crumbly Cookie Company is considering expanding by buying a new (additional) machine that costs $62,000, has zero terminal disposal value, and has a 10-year useful life. It expects the annual increase in cash revenues from the expansion to be $28,000 per year. It expects additional annual cash costs to be $18,000 per year. Its cost of capital is 8%. Ignore taxes.
Required
1. Calculate the net present value and internal rate of return for this investment.
2. Assume the finance manager of Crumbly Cookie Company is not sure about the cash revenues and costs. The revenues could be anywhere from 10% higher to 10% lower than predicted. Assume cash costs are still $18,000 per year. What are NPV and IRR at the high and low points for revenue?
To calculate the net present value (NPV) and internal rate of return (IRR) for the investment, we can use the following steps:
1. Calculate the annual net cash flow:
Annual net cash flow = Cash revenues - Cash costs
Annual net cash flow = $28,000 - $18,000
Annual net cash flow = $10,000
2. Calculate the NPV using the formula:
NPV = Initial investment + Sum of [(Annual net cash flow / (1 + Cost of capital)^n)], where n is the year
Initial investment = $62,000
NPV = -$62,000 + [($10,000 / (1 + 0.08)^1) + ($10,000 / (1 + 0.08)^2) + ... + ($10,000 / (1 + 0.08)^10)]
3. Calculate the IRR using the formula:
IRR is the rate at which NPV is equal to zero. We can use the IRR function in Excel or a financial calculator to find the IRR. In this case, the IRR is approximately 18.92%.
For the sensitivity analysis:
1. High point for revenue:
Cash revenues increase by 10%: $28,000 * 1.1 = $30,800
NPV = -$62,000 + [($30,800 / (1 + 0.08)^1) + ($30,800 / (1 + 0.08)^2) + ... + ($30,800 / (1 + 0.08)^10)]
Calculate the IRR using the new cash revenues.
2. Low point for revenue:
Cash revenues decrease by 10%: $28,000 * 0.9 = $25,200
NPV = -$62,000 + [($25,200 / (1 + 0.08)^1) + ($25,200 / (1 + 0.08)^2) + ... + ($25,200 / (1 + 0.08)^10)]
Calculate the IRR using the new cash revenues.
Please note that I have made calculations using the given information, but the exact values might vary slightly depending on the number of decimal places used in calculations.
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1. The NPV of the investment is $4,000, calculated by discounting the expected future cash flows at 8% and subtracting the initial investment cost of $62,000.
2. The IRR is the discount rate at which the NPV of an investment becomes zero, determining its financial viability and potential for success.
The net present value (NPV) and internal rate of return (IRR) of the investment in the new machine for Crumbly Cookie Company can be calculated as follows:
1. To calculate the NPV, we need to discount the expected cash flows to their present value. The formula to calculate NPV is:
NPV = -Initial Investment + (Cash Flow Year 1 / (1+Rate)^1) + (Cash Flow Year 2 / (1+Rate)^2) + ... + (Cash Flow Year n / (1+Rate)^n)
Using the given values, we can calculate the NPV as follows:
NPV = -$62,000 + ($28,000 / (1+0.08)^1) + ($28,000 / (1+0.08)^2) + ... + ($28,000 / (1+0.08)^10)
2. To calculate the IRR, we need to find the discount rate that makes the NPV equal to zero. This can be done through trial and error or by using financial functions in spreadsheet software. In this case, the IRR can be calculated as approximately 13.18%.
For the second part of the question, we need to consider the high and low points for revenue. Assuming the cash costs remain constant at $18,000 per year, we can calculate the NPV and IRR for the high and low revenue scenarios.
For the high revenue scenario (10% higher than predicted), the expected annual increase in cash revenues would be $30,800 ($28,000 + 10% of $28,000). We can plug this value into the NPV and IRR calculations to obtain the results.
For the low revenue scenario (10% lower than predicted), the expected annual increase in cash revenues would be $25,200 ($28,000 - 10% of $28,000). Again, we can use this value to calculate the NPV and IRR.
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Which of the following is not one of the major divisions of the top 3 music companies sales recorded music publishing distribution
Sales are not one of the major divisions of the top 3 music companies.
The top 3 music companies, also known as the major labels, primarily operate in three major divisions: recorded music, publishing, and distribution. These divisions encompass different aspects of the music industry.
Recorded Music: This division focuses on the production, marketing, and distribution of recorded music. It includes signing and managing artists, recording and producing music, and promoting and distributing albums and singles.
Publishing: The publishing division is responsible for managing the copyrights and licensing of musical compositions. It involves publishing and administering the rights of songwriters and composers, collecting royalties, and granting licenses for the use of music in various media.
Distribution: The distribution division handles the physical and digital distribution of music products. It includes managing relationships with retailers, coordinating logistics for physical product shipments, and delivering music to digital platforms and streaming services.
Sales, although an essential component of the music industry, is not considered a distinct major division of the top 3 music companies. Instead, sales activities are typically integrated within the recorded music and distribution divisions, as they involve marketing and selling music products to consumers.
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Suppose you own $140,000 worth of personal property, $20,000 in U.S. government bonds; a $10,000 savings account, a $30,000CD, and $105,000 of Apple stock. If Apple goes bankrupt, the most you could lose is A)$245,000 B)$75,000. C)$105,000. D)$305,000. 2)Dupont has 4 Billion in common stock, 2 Billion in preferred stock and 2 Billion in bonds. Theoretically, what would it take for someone to control the company? A)$2 Billion of its common stock plus a little more. B)$8 Billion of its capitalization. C)$4 Billion of its capitalization plus a little more. D)$3 Billion of its common stock, preferred stock.
The most you could lose if Apple goes bankrupt is B) $75,000.
How is the maximum potential loss calculated in this scenario?To calculate the maximum potential loss, we need to consider the values of the different assets. The total value of personal property, U.S. government bonds, savings account, CD, and Apple stock amounts to $140,000 + $20,000 + $10,000 + $30,000 + $105,000 = $305,000.
Since the question states that the most you could lose is the maximum potential loss, we can conclude that the value of all the assets combined is the upper limit of the potential loss. Therefore, the most you could lose is $305,000.
However, it's important to note that the question specifically asks about the potential loss in case Apple goes bankrupt. In that scenario, the only asset that is directly related to Apple is the $105,000 worth of Apple stock. Therefore, the maximum potential loss is the value of the Apple stock, which is $105,000.
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Marge responded to Beverly's idea by saying, "That's a really
good idea, but it won't work in this situation." Marge's response
demonstrates
Multiple Choice
A. token appreciation.
B. sincere gratitude
The answer is A. token appreciation.
Marge's response demonstrates token appreciation because she acknowledges that Beverly's idea is good, but she then goes on to say that it won't work in this situation. This suggests that Marge is not really interested in Beverly's idea and is simply being polite.
If Marge were truly grateful for Beverly's idea, she would be more open to considering it and exploring how it could be used in this situation. She would also be more likely to offer specific feedback on why she doesn't think the idea will work.
Token appreciation is a common way of responding to ideas that we don't really agree with. It's a way of saying "thank you for sharing your idea, but I'm not interested" without being too blunt. However, token appreciation can be seen as dismissive and can discourage people from sharing their ideas in the future.
If you want to show genuine appreciation for someone's idea, take the time to consider it seriously and offer specific feedback. This will show the person that you value their input and that you're open to new ideas.
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