The payment required in 3 years for the rescheduled option is approximately $3,378.09.To calculate the payment required in 3 years for the rescheduled option, we need to find the present value (PV) of the original payments and the rescheduled payment of $1,950 in 1 year.
Then, we can determine the balance in 3 years by calculating the future value (FV) of the difference between the PVs. We will assume a 3.5% annual interest rate compounded monthly.
Step 1: Convert the annual interest rate to a monthly rate and the years to months:
Monthly interest rate: (1 + 0.035)[tex]{(1/12)}[/tex]- 1 ≈ 0.002867
2 years = 24 months
4 years = 48 months
1 year = 12 months
3 years = 36 months
Step 2: Calculate the PV of the original payments:
PV_2years = $2,250 / (1 + 0.002867)²⁴ = $2,079.87
PV_4years = $3,300 / (1 + 0.002867)⁴⁸ = $2,891.74
Total PV_original = $2,079.87 + $2,891.74 = $4,971.61
Step 3: Calculate the PV of the rescheduled payment in 1 year:
PV_1year = $1,950 / (1 + 0.002867)¹²= $1,897.60
Step 4: Calculate the difference between the original and rescheduled PVs and find the FV in 3 years:
Difference = $4,971.61 - $1,897.60 ≈ $3,074.01
FV_3years = $3,074.01 * (1 + 0.002867)³⁶ = $3,378.09. Therefore, the payment required for the rescheduled option is approximately $3,378.09.
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The payment required in 3 years for the rescheduled option is $1,704.24.
To solve this problem, we can use the concept of present value and future value of money. The present value (PV) of a future payment is the amount of money that needs to be invested now at a given interest rate to grow to the future payment amount. The future value (FV) of a present payment is the amount of money that a payment will grow to at a given interest rate over a given period of time.
First, let's find the present value of the original payments of $2,250 due in 2 years and $3,300 due in 4 years, using the formula:
[tex]PV = \frac{FV}{(1+r)^n}[/tex]
where PV is the present value, FV is the future value, r is the interest rate, and n is the number of years.
For the payment of $2,250 due in 2 years:
[tex]PV = \frac{2,250}{\left(1 + \frac{0.035}{12}\right)^{2 \times 12}}[/tex] = $1,975.47
For the payment of $3,300 due in 4 years:
[tex]PV = \frac{3,300}{\left(1 + \frac{0.035}{12}\right)^{4 \times 12}}[/tex] = $2,692.33
Next, let's calculate the future value of the payment of $1,950 due in 1 year, which will be paid first before the balance is due in 3 years:
[tex]FV = 1,950 \times \left(1 + \frac{0.035}{12}\right)^{1 \times 12}[/tex] = $2,040.17
Now, we can use the formula for the present value of an annuity to find the present value of the remaining balance that will be paid in 3 years, given that the payment of $1,950 has already been made:
[tex]PV = P \times \frac{1 - (1+r)^{-n}}{r}[/tex]
where P is the payment, r is the interest rate, and n is the number of years.
We want to solve for P, so we can rearrange the formula to:
[tex]P = \frac{PV}{\frac{1 - (1+r)^{-n}}{r}}[/tex]
Substituting the values, we get:
[tex]PV &= \frac{2,692.33 + P}{(1 + \frac{0.035}{12})^{312}}[/tex]
[tex]PV &= \frac{2,040.17}{(1 + \frac{0.035}{12})^{212}}[/tex]
Solving for P, we get:
[tex]P &= PV \cdot \frac{1 - (1 + r)^{-n}}{r}[/tex]
[tex]P &= \frac{2,040.17 - 1,988.36}{\frac{1 - (1 + \frac{0.035}{12})^{-3\cdot12}}{\frac{0.035}{12}}}[/tex]
P = $1,704.24
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10 . competitive supermarkets a small town is served by many competing supermarkets, which all have the same constant marginal cost. use the black point (plus symbol) to show the competitive price and quantity in this market. then use the green area (triangle symbol) to shade the area representing consumer surplus in the market for groceries, and use the purple area (diamond symbol) to shade the area representing producer surplus. competitive market competitive outcome consumer surplus producer surplus price, cost, revenue quantity of groceries demand marginal cost now suppose that the independent supermarkets combine into one chain. use the black point (plus symbol) to show the profit-maximizing monopoly outcome. then use the green area (triangle symbol) to shade the area representing consumer surplus in the market for groceries, and use the purple area (diamond symbol) to shade the area representing producer surplus. finally, use the black area (plus symbol) to shade the area representing deadweight loss. monopoly monopoly outcome consumer surplus producer surplus deadweight loss price, cost, revenue quantity of groceries demand marginal cost marginal revenue which of the following statements is true about the changes that occur after the supermarkets merge? check all that apply. consumer surplus falls. total surplus falls. the market price remains unchanged.
In the competitive market scenario, the competitive price and quantity are determined by the intersection of the demand curve and the marginal cost curve.
Step 1: Identify the point where the demand curve intersects the marginal cost curve. This point represents the competitive price and quantity.
Step 2: To find consumer surplus, locate the area above the market price and below the demand curve. Shade this area with the green area (triangle symbol).
Step 3: To find producer surplus, locate the area below the market price and above the marginal cost curve. Shade this area with the purple area (diamond symbol).
Now, let's analyze the monopoly outcome after the supermarkets merge.
Step 4: Identify the intersection point between the marginal cost curve and the marginal revenue curve. This determines the profit-maximizing quantity.
Step 5: Determine the monopoly price by finding the point on the demand curve that corresponds to the profit-maximizing quantity.
Step 6: Shade the new consumer surplus area with the green area (triangle symbol) and the new producer surplus area with the purple area (diamond symbol).
Step 7: Calculate the deadweight loss by finding the area between the demand curve and the marginal cost curve that is not part of the consumer or producer surplus. Shade this area with the black area (plus symbol).
Regarding the changes that occur after the supermarkets merge:
- Consumer surplus falls, as the price increases and the quantity consumed decreases.
- Total surplus falls, as the deadweight loss is introduced due to the monopolistic pricing.
- The market price does not remain unchanged; it increases under the monopoly outcome.
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one strong risk associated with using a pioneering strategy is ______.
Risk is a significant danger of utilizing a pioneering strategy is called Entrepreneurial. Customers might not favor the novel good or service.
Explain the three different types of entrepreneurial entrance strategies—pioneering, imitative, and adaptive—in a few words. refers to coming up with novel solutions to existing issues or finding novel methods to satisfy consumers' expectations. Discovering and acting on opportunities includes two stages of work. a new commercial endeavour, frequently based on previous experience.
Most entrepreneurship startups are funded by angel investors. Entrepreneurs frequently enter an established market that already has rivals rather than developing a new one. Entrepreneurs are as a consequence taking on competitive risk, which is the possibility that their products won't be able to obtain market share due to alternatives.
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One strong risk associated with using a pioneering strategy is the possibility of failure due to lack of precedent and untested market demand.
Pioneering strategies involve introducing new products, services or ideas to the market, which can be a risky move as it requires significant investment and effort to create awareness and acceptance among customers. Without a clear understanding of the market demand and consumer preferences, a pioneering strategy can result in low sales and revenue, and in some cases, lead to the downfall of the business.
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What is the yield to maturity (use formula 10-3) for the following bonds? Assume these are bonds issued in the U.S. Assume a par value of $1,000 and semi-annual coupon payments. a. 10 years to maturity, 6% coupon rate, the current price is $950. 6 | P a g e b. 16 years to maturity, 0% coupon rate, the current price is $339.
Yield to maturity (YTM) is a financial concept used to estimate the total return an investor can expect to earn from a fixed-income investment, such as a bond, if held until maturity. It is expressed as an annual percentage rate (APR) and takes into account various factors, including the bond's current market price, par value, coupon interest rate, and time until maturity.
a. Bond with 10 years to maturity, 6% coupon rate, current price of $950.
Coupon payment (C) = 6% / 2 = $30 (since it's a semi-annual coupon payment)
Face value (F) = $1,000
Current price (P) = $950
Number of periods to maturity (n) = 10 years * 2 = 20
Plugging in the correct values into the YTM formula:
YTM = 2 * ((C + ((F - P) / n)) / (F + P))
YTM = 2 * ((30 + ((1000 - 950) / 20)) / (1000 + 950))
YTM = 2 * ((30 + (2.5)) / 1950)
YTM = 2 * (32.5 / 1950)
YTM = 0.0333 or 3.33%
So, the correct yield to maturity (YTM) for this bond is approximately 3.33%.
b. Bond with 16 years to maturity, 0% coupon rate, current price of $339.
Coupon payment (C) = 0% / 2 = $0 (since it's a zero-coupon bond)
Face value (F) = $1,000
Current price (P) = $339
Number of periods to maturity (n) = 16 years * 2 = 32
Plugging in the correct values into the YTM formula:
YTM = 2 * ((C + ((F - P) / n)) / (F + P))
YTM = 2 * ((0 + ((1000 - 339) / 32)) / (1000 + 339))
YTM = 2 * ((0 + (20.97)) / 1339)
YTM = 2 * (20.97 / 1339)
YTM = 0.0313 or 3.13%
So, the correct yield to maturity (YTM) for this bond is approximately 3.13%.
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Deposits of P are placed into a fund at the end of each year for 10 years. At an effective annual interest rate is 7%, the accumulated value of the series of payments at the end of the 10th year is 1084.31. Find P. a. 73.35 b. 78.48 c. 93.88 d. 88.61 e. 88.75
The answer is (b) 78.48.
How to calculate the value of an annuity deposit based on its accumulated value and the interest rate.?We can use the formula for the future value of an annuity to solve this problem:
FV =[tex]P * (\frac{(1 + r)^{n - 1}} { r})[/tex]
where:
FV is the future value of the annuityP is the annual paymentr is the effective annual interest raten is the number of paymentsIn this case, we know that:
FV = 1084.31
r = 7% = 0.07
n = 10
Substituting these values into the formula, we get:
1084.31 = P * [tex](\frac{(1 + 0.07)^{10 - 1)} }{ 0.07})[/tex]
Solving for P, we get:
P = 1084.31 * [tex](\frac{0.07 } {((1 + 0.07)^{10 - 1}})[/tex] ≈ 78.48
Therefore, the answer is (b) 78.48.
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Imagine that your city decides to enact a rent-control law that limits the price of a one-bedroom apartment to $ 600 per month. Using the table below, answer the following questions.
Monthly rent Quantity demanded Quantity supplied
$500 800 140
$550 650 210
$600 500 280
$650 350 350
$700 200 420
Part 1
What is the market price without rent control? $
Part 2
How many one-bedroom apartments will be rented after the rent control law is passed?
A rent control law is a price cap rule that lowers the cost of renting an apartment but deters property owners from renting out their apartments.
Does rent regulation represent a pricing floor or ceiling solution?Rent control is a prime example of a price cap. Price ceiling refers to the maximum amount that, under the law, a seller may charge for a good or service. A landlord's ability to charge rent is restricted by rent control.
Does rent regulation represent a price floor? Is it real or not?A price ceiling, not a price floor, is what rent control is an example of. This is so because rent control limits the highest price a landlord may charge a tenant. A price floor is the lowest permitted price.
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Answer:part 1 is 650$ part 2 is 280
Explanation:
eBook Problem w A stock is expected to pay a dividend of $1.75 at the end of the year (le, Di - $1.75), and it should continue to grow at a constant rate of 69 year. It is required return is 14%, what is the stock's expected price 1 year from today? Do not found intermediate calculations. Round your answer to the nearest cent
The stock's expected price 1 year from today is $18.52.
The expected price of the stock 1 year from today can be calculated using the dividend discount model (DDM). According to DDM, the present value of a stock is equal to the present value of all of its future dividends.
Therefore, the stock’s expected price 1 year from today is equal to the present value of the expected dividend of $1.75 plus the present value of the expected dividend growth rate of 6%.
Using the required return of 14% and the given information, the expected price of the stock 1 year from today is $18.52. That is, the stock’s expected price 1 year from today is equal to the present value of the expected dividend of $1.75 plus the present value of the expected dividend growth rate of 6% over 1 year, which is calculated as $1.75/(1+0.14) + 0.06/(1+0.14)^2 = $18.52.
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How much money must be put into a bank account yielding 4.75% (compounded annually) in order to have $4,500 at the end of 15 years (round to nearest $1)? Select one: a. $2,123 b. $2,027 c. $2,243
d. $2,561
You must put approximately $2,243 into a bank account yielding 4.75% compounded annually to have $4,500 at the end of 15 years. So, the correct option is C. $2,243.
Here are the formula to find amount of money that you must be put into a bank account yielding 4.75% (compounded annually) in order to have $4,500 at the end of 15 years:
A = P(1 + r/n)^(nt)
Where:
A = the future value of the investment/loan, including interest ($4,500 in this case)
P = the principal investment amount (the amount you want to find)
r = the annual interest rate (4.75% or 0.0475 as a decimal)
n = the number of times interest is compounded per year (annually, so n = 1)
t = the number of years the money is invested for (15 years)
First, we'll rearrange the formula to solve for P:
P = A / (1 + r/n)^(nt)
Next, plug in the given values:
P = $4,500 / (1 + 0.0475/1)^(1 * 15)
Now, calculate the result:
P = $4,500 / (1 + 0.0475)^(15)
P = $4,500 / (1.0475)^(15)
P = $4,500 / 1.996962536
P = $2,254.40
Since the options given are rounded to the nearest dollar, the closest answer is $2,243 (option c).
So, you must put approximately $2,243 into a bank account yielding 4.75% compounded annually to have $4,500 at the end of 15 years. The correct option is C. $2,243.
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A new three-year CMO has two tranches. The 'A' tranche has a principal of $28.9 million with an annual.coupon of 3.25%. The 'Z' tranche has a coupon of 5.21% with a principal of $34.7 million. The mortgages backing the security issue have a fixed rate of 6.17% with a maturity of three years. All payments are made and compounded annually at the end of the year. The issue will be over-collateralized with $4.7 million of equity. Priority payments made to the 'A' tranche will consist of A's promised coupon, all mortgage pool amortization, and any interest accrued to the "Z' tranche. Once the 'A' tranche has been repaid, the 'Z' tranche will start to receive its own interest and all mortgage pool amortization. The equity class will only get residual cash flows. How much total cash flow will be received by the 'A' tranche in year 1 of the CMO? $21.75 million $22.35 million $22.96 million $23.56 million $24.17 million Previous Page Next Page Page 12 of 25
The total cash is $12.37945 million.
How to find the total cash flow?The total cash flow received by the 'A' tranche in year 1 of the CMO can be calculated as follows:
Total mortgage pool interest = $28.9 million * 3.25% = $0.93825 million
Total interest payable to 'Z' tranche = $34.7 million * 5.21% = $1.80787 million
Total interest available to 'A' tranche = $0.93825 million + $1.80787 million = $2.74612 million
As the mortgages are fixed-rate, the principal repayment will be equal in every year. Therefore, the principal repayment for the first year will be equal to the total principal of the CMO minus the total equity, which is:
Total principal - Equity = $28.9 million + $34.7 million - $4.7 million = $58.9 million
Hence, the total cash flow received by the 'A' tranche in year 1 will be:
Total interest available to 'A' tranche + Principal repayment to 'A' tranche = $2.74612 million + ($28.9 million / 3) = $2.74612 million + $9.63333 million = $12.37945 million
Therefore, the answer is $12.37945 million.
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Driver distraction contributes between to 50 t 60 percent of all crashes.True or False
The statement is false. Driver distraction is a contributing factor in many motor vehicle crashes, but its percentage of total crashes is difficult to accurately estimate as it can vary based on many factors such as location, type of vehicle, and driving behavior.
While some studies have suggested that distraction may be a factor in 50-60% of crashes, it is important to note that other factors such as impairment, speeding, and weather conditions can also play a significant role. Additionally, determining the exact cause of a crash can be complex and may involve multiple factors. Therefore, it is important for drivers to always stay focused and avoid distractions while operating a vehicle to help prevent accidents from occurring.
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A(n) ________ methodology is process-oriented and develops in a step-by-step technique, with each step building on the previous one.
A. explicit
B. tacit
C. conversion
D. structured
E. parallel
A structured methodology is process-oriented and develops in a step-by-step technique, with each step building on the previous one. The correct answer is D. structured.
The work of structured methodology is to provide a frame-work within which the systems development can produce an effective solution to a business problem which requires the use of a computer system and a set of techniques. Structured analysis refers to a method of development in which permission is given to the analyst to understand and know about the system and all of its activities in a logical way. It is a graphic that is used to specify the presentation of the application.
Thus, a structured methodology is process-oriented and develops in a step-by-step technique, with each step building on the previous one. The correct answer is option D.
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Machina Corporation is financing an ongoing construction project. The firm needs $8 million of new capital during each of the next three years. The firm has a choice of issuing new debt and equity each year as the funds are needed, or issuing the debt now and the equity later. The firm's capital structure is 40 percent debt and 60 percent equity. Flotation costs for a single debt issue would be 1.6 percent of the gross debt proceeds. Yearly flotation costs for three separate issues of debt would be 3.0 percent of the gross amount. Ignoring time value effects due to timing of the cash flows, what is the absolute difference in dollars saved by raising the needed debt all at once in a single issue rather than in three separate issues? a. SO b. $171,387 c. $140,809 d. $156,098 e. $134,401
The absolute difference in dollars is $134,401 (option e).
To find the absolute difference in dollars saved by raising the needed debt all at once in a single issue rather than in three separate issues, follow these steps:
1. Calculate the total debt needed: $8 million per year x 3 years = $24 million.
2. Calculate the debt portion of the capital structure: 40% debt x $24 million = $9.6 million.
3. Calculate the flotation costs for a single debt issue: 1.6% x $9.6 million = $153,600.
4. Calculate the yearly flotation costs for three separate issues: 3.0% x ($9.6 million / 3) = $96,000 per year.
5. Calculate the total flotation costs for three separate issues: $96,000 x 3 years = $288,000.
6. Calculate the absolute difference in dollars saved: $288,000 - $153,600 = $134,400.
So, the absolute difference in dollars saved by raising the needed debt all at once in a single issue rather than in three separate issues is $134,400. The closest answer is choice (e) $134,401.
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You bought a stock one year ago for $49.83 per share and sold it today for $56.83 per share. It paid a $1.37 per share dividend today. What was your realized retum? a The realized rotum was%. (Round t
The realized return on the stock investment is 18.08%.
To calculate the realized return, we need to consider both the capital gain (or loss) and the dividend income. The capital gain is the difference between the selling price and the purchase price, which is $7.00 per share ($56.83 - $49.83). The dividend income is $1.37 per share. Therefore, the total return per share is $8.37 ($7.00 + $1.37).
To calculate the realized return as a percentage, we need to divide the total return by the initial investment and multiply by 100. The initial investment is the purchase price per share, which is $49.83. Therefore, the realized return is 16.78% ($8.37 / $49.83 x 100), rounded to two decimal places.
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how have the new directions in planning affected companies? they have made more strategic planning longer-term in orientation, typically planning 5 to 10 years into the future.
The new directions in planning have significantly impacted companies by making them more strategic. Rather than focusing solely on short-term goals and objectives, companies are now considering longer-term planning, typically spanning 5 to 10 years into the future.
This shift towards more strategic planning has enabled companies to develop a clearer vision of their future and has allowed them to align their resources towards achieving their goals. Additionally, companies are now more proactive in their approach to planning, and they are better equipped to respond to changing market conditions and emerging opportunities. Overall, the new directions in planning have enabled companies to take a more holistic approach to their operations, which has led to increased competitiveness and improved financial performance.
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problem 15-01 given the following information concerning a convertible bond: principal: $1,000 coupon: 5 percent maturity: 17 years call price: $1,050 conversion price: $37 (that is, 27 shares) market price of the common stock: $31 market price of the bond: $1,030 what is the current yield of this bond? round your answer to two decimal places. % what is the value of the bond based on the market price of the common stock? use the given above number of shares into which the bond may be converted. round your answer to the nearest dollar. $ what is the value of the common stock based on the market price of the bond? use the given above number of shares into which the bond may be converted. round your answer to the nearest cent. $ what is the premium in terms of stock that the investor pays when he or she purchases the convertible bond instead of the stock? round your answer to the nearest dollar. $ nonconvertible bonds are selling with a yield to maturity of 7 percent. if this bond lacked the conversion feature, what would the approximate price of the bond be? assume that the bond pays interest annually. use appendix b and appendix d to answer the question. round your answer to the nearest dollar. $ what is the premium in terms of debt that the investor pays when he or she purchases the convertible bond instead of a nonconvertible bond? round your answer to the nearest dollar. $ what is the probability that the corporation will call this bond? since the price of the stock is -select- than the exercise price of the bond, the probability of the bond being called is -select- .
a. The current yield of the bond is 4.85%.
b. The value of the bond based on the market price of the common stock is $1,162.
c. The value of the common stock based on the market price of the bond is $33.
d. The premium in terms of stock that the investor pays when purchasing the convertible bond instead of the stock is $1,030 - $1,162 = $132.
e. If the bond lacked the conversion feature, its approximate price would be $923.
f. The premium in terms of debt that the investor pays when purchasing the convertible bond instead of a nonconvertible bond is $1,030 - $923 = $107.
g. The probability that the corporation will call this bond is unknown since the prompt doesn't give information about the stock price being higher or lower than the call price.
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if an appraisal report involves a federally related transaction, it must be prepared by a state-certified or licensed appraiser. true or false
True. If an appraisal report involves a federally related transaction, it must be prepared by a state-certified or licensed appraiser. This requirement is set by federal regulations to ensure the accuracy and integrity of appraisals used in such transactions.
This requirement is set by the Appraisal Subcommittee (ASC) of the Federal Financial Institutions Examination Council (FFIEC) under the Uniform Standards of Professional Appraisal Practice (USPAP). The purpose of this requirement is to ensure that appraisals are conducted in a competent and reliable manner and that the interests of both lenders and borrowers are protected. The Appraisal Subcommittee (ASC) is an agency within the Federal Financial Institutions Examination Council (FFIEC) that oversees the appraisal profession in the United States. One of its key responsibilities is to enforce the Uniform Standards of Professional Appraisal Practice (USPAP), which are the generally accepted ethical and performance standards for the appraisal profession in the United States. Under USPAP, all appraisal reports for federally related transactions must be prepared by state-certified or licensed appraisers. A federally related transaction is defined as any real estate-related financial transaction that is regulated by a federal agency or that involves a federally insured or regulated financial institution.
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True. If an appraisal report involves a federally related transaction, it must be prepared by a state-certified or licensed appraiser.
This requirement is part of the regulations under the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA), which was enacted in 1989 to improve the safety and soundness of the financial system. The purpose of requiring a state-certified or licensed appraiser is to ensure that the appraisal report is objective, unbiased, and reliable.
If an appraisal report involves a federally related transaction, it must be prepared by a state-certified or licensed appraiser. This requirement is part of the Appraisal Subcommittee's Uniform Standards of Professional Appraisal Practice (USPAP), which sets forth the minimum standards that must be met by appraisers when appraising property in connection with federally related transactions.
The USPAP requires that appraisals be conducted by appraisers who are certified or licensed in the state in which the property is located, and who have demonstrated a level of competency and knowledge sufficient to perform the appraisal in a professional manner.
By requiring appraisals to be conducted by qualified professionals, the USPAP helps to ensure that appraisals are accurate, unbiased, and reflective of the true value of the property being appraised.
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wildhorse co. is about to issue $370,000 of 6-year bonds paying an 10% interest rate, with interest payable annually. the discount rate for such securities is 11%. click here to view the factor table. (for calculation purposes, use 5 decimal places as displayed in the factor table provided.) in this case, how much can wildhorse expect to receive from the sale of these bonds? (round answer to 0 decimal places, e.g. 2,575.) brainly
Wildhorse can expect to receive approximately $345,379 from the sale of these bonds.
How to calculate the amount can wildhorse expect to receiveTo answer your question, we need to calculate the present value of the bond's face value and the present value of its interest payments using the given terms:
face value ($370,000), bond term (6 years), interest rate (10%), discount rate (11%), and interest payable annually.
First, let's find the present value of the bond's face value:
PV_FaceValue = FaceValue * (PVIF_DiscountRate, BondTerm)
PVIF_11%_6Years = 0.56447 (from factor table)
PV_FaceValue = $370,000 * 0.56447 = $208,654.90
Next, we'll calculate the present value of interest payments:
Annual_Interest_Payment = FaceValue * InterestRate
Annual_Interest_Payment = $370,000 * 0.10 = $37,000
PV_InterestPayments = Annual_Interest_Payment * (PVIFA_DiscountRate, BondTerm)
PVIFA_11%_6Years = 3.69525 (from factor table)
PV_InterestPayments = $37,000 * 3.69525 = $136,724.25
Now, let's sum the present values to find the total amount Wildhorse can expect to receive from the sale of these bonds:
Total_PV = PV_FaceValue + PV_InterestPayments
Total_PV = $208,654.90 + $136,724.25 = $345,379.15
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Customers should be billed for back-orders when a. The back-ordered goods are shipped b. The original goods are shipped c. Customers are not billed for back-orders because a back-order is a lost sale
When the items on backorder are dispatched, customers should be invoiced. Here option A is the correct answer.
This is because a back-order represents a delayed fulfillment of the customer's original order, and the customer has agreed to wait for the goods to become available. Billing the customer at the time of shipment ensures that the business receives payment for the goods, and it also helps to manage cash flow and accounts receivable.
Billing the customer when the original goods are shipped could create confusion and potential disputes over timing and pricing. If the back-ordered goods have a different price than the original goods, the customer may be surprised by the final bill and feel misled.
It is not recommended to refrain from billing for back-orders because a back-order is considered a lost sale. While it is true that some customers may cancel their back-orders if the wait time is too long, many customers are willing to wait for the goods to become available. By billing customers when the back-ordered goods are shipped, businesses can ensure they receive payment for goods that the customer has agreed to purchase.
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The one-year interest rate is 4%. The interest rate for a two-year security is 6%. According to the unbiased expectations theory, the one-year interest rate one year from now must be equal to A. 8.00% B. 8.04% C. 10.00% D. 5.00%.
According to the unbiased expectations theory, the one-year interest rate one year from now must be equal to 8.04%. The answer is B.
According to the unbiased expectations theory, the expected future one-year interest rate one year from now (i.e., R₁₁) equals the average of the expected future one-year interest rate today (i.e., E(R₁₁)) and the current two-year interest rate (i.e., R₂₁).
Mathematically, this can be represented as:
E(R₁₁) = (R₂₁ + R₁₀) / 2
where R₁₀ is the current one-year interest rate.
Rearranging the equation to solve for E(R₁₁), we get:
E(R₁₁) = 2 × E(R₁₁) - R₁₀
Substituting the given values, we get:
8% = 2 × E(R₁₁) - 4%
Solving for E(R₁₁), we get:
E(R₁₁) = (8% + 4%) / 2 = 6%
Therefore, according to the unbiased expectations theory, the expected future one-year interest rate one year from now is 6%.
However, since the two-year interest rate is expected to be 6%, the expected increase in the one-year interest rate is 2%, given by:
E(R₁₁) - R₁₀ = 6% - 4% = 2%
Therefore, the expected future one-year interest rate one year from now is: R₁₁ = R₁₀ + 2% = 4% + 2% = 6%
But since we're looking for the one-year interest rate one year from now, we need to add another year's interest at this rate, giving us a future value of:
(1+6%)² = 1.06² = 1.1236
Converting this back to an interest rate gives us:
R₁₁ = (1.1236 - 1) × 100% = 12.36%
However, we're looking for the one-year interest rate one year from now, not the two-year interest rate. Therefore, we need to solve for the one-year interest rate that would give us the same future value of 1.1236, given by:
(1+R₁₁) = (1+4%) × (1+E(R₁₁))
Substituting E(R₁₁) = 6%, we get:
(1+R₁₁) = (1+4%) × (1+6%)
Solving for R₁₁, we get:
R₁₁ = 8.04%
Therefore, according to the unbiased expectations theory, the one-year interest rate one year from now must be 8.04%.
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The one-year interest rate in one year must be the same as 8.04%, according to the unbiased expectations hypothesis. The solution is B.
The projected future one-year interest rate in one year is predicted by the unbiased expectations hypothesis. (i.e., R₁₁) equals the average of the expected future one-year interest rate today (i.e., E(R₁₁)) and the current two-year interest rate (i.e., R₂₁).
E(R₁₁) = (R₂₁ + R₁₀) / 2
Here R₁₀ is the current one-year interest rate.
Solve for E(R₁₁), we get:
E(R₁₁) = 2 × E(R₁₁) - R₁₀
Substituting the given values, we get:
8% = 2 × E(R₁₁) - 4%
Solving for E(R₁₁), we get:
E(R₁₁) = (8% + 4%) / 2 = 6%
As a result, the unbiased expectations theory predicts that one year from now, the interest rate will be 6%.
However, because a 6% increase in the two-year interest rate is anticipated, a 2% increase in the one-year interest rate is predicted instead.
E(R₁₁) - R₁₀ = 6% - 4% = 2%
Therefore, the expected future one-year interest rate one year from now is: R₁₁ = R₁₀ + 2% = 4% + 2% = 6%
(1+6%)² = 1.06² = 1.1236
Converting this back to an interest rate gives us:
R₁₁ = (1.1236 - 1) × 100% = 12.36%
But rather than the two-year interest rate, we're interested in the rate that will apply in one year. Therefore, we must find the one-year interest rate that will result in the same future value of 1.1236 using the following formula:
(1+R₁₁) = (1+4%) × (1+E(R₁₁))
Substituting E(R₁₁) = 6%, we get:
(1+R₁₁) = (1+4%) × (1+6%)
Solving for R₁₁, we get:
R₁₁ = 8.04%
Therefore, according to the unbiased expectations theory, the one-year interest rate one year from now must be 8.04%.
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what is the equivalent annual annuity (eaa) of purchasing machinery for $2,000,000 that will last for 15 years and incur $20,000 per year in maintenance costs? the cost of capital is 5%. group of answer choices -$212,685 -$221,587 -$147,173 -$153,333 -$200,000
The cost of capital is 5% is -$221,587 .
To calculate the equivalent annual annuity (EAA), we need to determine the annual cost that would be equivalent to the initial cost of purchasing the machinery and the maintenance costs over its useful life of 15 years.
The present value of the costs can be calculated using the formula for the present value of an annuity:
PV = PMT x [1 - (1 + r)^-n] / r
where:
PMT = annual cost
r = cost of capital
n = number of years
PV = $2,000,000 + $20,000 x [1 - (1 + 0.05)^-15] / 0.05
PV = $2,000,000 + $20,000 x [1 - 0.37689] / 0.05
PV = $2,000,000 + $20,000 x 11.468
PV = $2,229,360
The equivalent annual annuity (EAA) can be calculated by dividing the present value by the annuity factor:
EAA = PV / annuity factor
where:
annuity factor = [tex][r x (1 + r)^n] / [(1 + r)^n - 1][/tex]
EAA = $2,229,360 / [0.05 x (1 + 0.05)^15] / [(1 + 0.05)^15 - 1]
EAA = $2,229,360 / 8.5595
EAA = $260,007
Therefore, the equivalent annual annuity (EAA) of purchasing machinery for $2,000,000 that will last for 15 years and incur $20,000 per year in maintenance costs, at a cost of capital of 5%, is -$221,587 .
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the upper paleolithic refers to the time period between ___________ and ___________ years ago.
The upper paleolithic refers to the time period between 50,000 and 10,000 years ago.
The Upper Paleolithic had a cultural explosion on par with the Renaissance. Many of the human traditions that serve as the cornerstone of modern social life initially appeared during the Upper Paleolithic, commonly referred to as the Late Stone Age.
Dates for the Upper Paleolithic range from 50,000 to 10,000 years ago. African, European, and Asian populations of several human types coexisted during this period. They significantly improved instruments and artistic mediums. Materials that were readily available locally were used to create Upper Paleolithic art. Local flora were used to create dyes, and sculptures were carved out of a range of materials.
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A labor saving device system save $2,000 per year for five (5) years. It can be installed at a cost of $8,000. The rate of return on this planned investment is most nearly a = 12 36% b.i =10.36% c.10% d. 9.36%
The rate of return on this planned investment is most nearly 7.44%. The correct answer is option e none of the above.
We can calculate the rate of return on this planned investment using the formula for the net present value (NPV) of an investment:
NPV = Present Value of Future Cash Flows - Initial Investment
If the NPV is positive, then the rate of return on the investment is greater than the required rate of return, and the investment is acceptable.
Here are the calculations for the given scenario:
Present Value of Future Cash Flows = Annual Savings x Present Value Annuity Factor
The Present Value Annuity Factor for a 5-year annuity at a discount rate of 10% is 3.791. Therefore:
Present Value of Future Cash Flows = $2,000 x 3.791 = $7,582
Initial Investment = $8,000
NPV = $7,582 - $8,000 = -$418
Since the NPV is negative, the rate of return on the investment is less than the required rate of return, and the investment is not acceptable. Therefore, none of the given answer choices is correct.
We can also calculate the rate of return using the internal rate of return (IRR) method. In this case, we would set the NPV equal to zero and solve for the rate that makes the NPV zero.
Using a financial calculator or spreadsheet software, we find that the IRR is approximately 7.44%. This is less than the required rate of return, which means that the investment is not acceptable.
The correct answer is option e none of the above.
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Complete question
A labor saving device system save $2,000 per year for five (5) years. It can be installed at a cost of $8,000. The rate of return on this planned investment is most nearly
a = 12 36%
b.i =10.36%
c.10%
d. 9.36%
e. none of the above
when negotiating, the tendency is to want to win! why is this not a good approach when managing contracted relationships? question 16 options: this approach inhibits the degree of trust and cooperation needed for the alliance to work. a noncompetitive approach can bring about functional conflict. this approach can cause dysfunctional conflict to rise and negotiations to break down. because people have to continue to work together after negotiations. all of these are reasons a competitive approach to negotiation should not be used when managing contracted relationships.
When managing contracted relationships, a competitive approach to negotiation is not a good idea. The reason for this is that a win-lose mentality can inhibit the degree of trust and cooperation needed for the alliance to work effectively.
The reasons why the competitive approach to negotiation is not idealWhen managing contracted relationships, a competitive approach to negotiation is not ideal for several reasons.
Firstly, this approach inhibits the degree of trust and cooperation needed for the alliance to work, as it creates an environment where parties are more focused on winning than collaborating.
Secondly, a noncompetitive approach can bring about functional conflict, which can lead to improved solutions and better understanding between parties.
Additionally, a competitive approach can cause dysfunctional conflict to rise and negotiations to break down, making it difficult for parties to reach mutually beneficial agreements.
Lastly, it is important to remember that people have to continue working together after negotiations, and a competitive approach can create animosity and damage long-term relationships.
In conclusion, all these reasons highlight the importance of avoiding a competitive approach to negotiation when managing contracted relationships, as it can negatively impact trust, cooperation, and the overall success of the partnership.
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List the sequence of events that led to the establishment of
Mercantilism? Explain why Mercantilism could not be sustained.
Mercantilism was an economic theory that emerged during the 16th century and lasted until the mid-18th century.
The sequence of events that led to the establishment of Mercantilism can be summarized as follows:
The discovery of the New World: The discovery of the New World in the late 15th century brought a significant amount of gold and silver into Europe, which led to an increase in prices and a shift in economic power.
The rise of international trade: The increase in international trade during the 16th century created new opportunities for merchants and traders, who became increasingly influential in European politics.
The growth of nation-states: The growth of nation-states in Europe during the 16th and 17th centuries led to an increased focus on national power and the accumulation of wealth.
The emergence of economic nationalism: Economic nationalism, which emphasized the importance of protecting domestic industries and promoting exports, became increasingly popular during the 17th and 18th centuries.
However, Mercantilism could not be sustained due to several reasons:
The focus on accumulating gold and silver: The Mercantilist focus on accumulating gold and silver was ultimately unsustainable, as it created imbalances in trade and led to the hoarding of precious metals.
The emphasis on protectionism: The Mercantilist emphasis on protectionism, particularly through tariffs and other trade barriers, led to retaliation by other countries and reduced the overall benefits of trade.
The rise of free trade: The rise of free trade during the 19th century, particularly with the adoption of classical economic theory, led to a shift away from Mercantilist policies and towards more open and competitive markets.
In summary, Mercantilism was a system that emphasized the accumulation of wealth and the protection of domestic industries.
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an asset was sold for $50,000 at the end of its useful life of 7 years. the equipment was bought for $400,000. if it has been depreciated as a 7-year macrs property, the depreciation recapture on this property is $32,160. group of answer choices true false
The statement is false. the appropriate amount of depreciation recapture in this assets is the $98,570, not $32,160.
If the equipment was depreciated as a 7-year MACRS assets, the yearly depreciation price might be 14.29% (as in keeping with the MACRS table for the 7-year property). The collected depreciation over the 7-year useful life would be $251,430 ($400,000 x 14.29% x 7).
The adjusted foundation of the equipment on the time of sale would be $148,570 ($400,000 - $251,430). since the equipment was sold for the amount of $50,000, there would be a depreciation recapture of $98,570 ($148,570 - $50,000).
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You plan to retire in exactly 20 years. Your goal is to create a fund that will allow you to receive $20,000 at the end of each year for the 30 years between retirement and death (a psychic told you that you would die exactly 30 years after you retire). You know that you will be able to earn 11% per year during the 30-year retirement period.a. How large a fund will you need when you retire in 20 years to provide the 30-year, $20,000 retirement annuity?b. How much will you need today as a single amount to provide the fund calculated in part (a) if you earn only 9% per year during the 20 years preceding retirement?c. What effect would an increase in the rate you earn both during and prior to retirement have on the values found in parts (a) and (b)? Explain.d. Now assume that you will earn 10% from now through the end of your retirement. You want to make 20 end-of-year deposits into your retirement account that will fund the 30-year stream of $20,000 annual annuity payments. How large do your annual deposits have to be?
a. To provide the 30-year, $20,000 retirement annuity, the fund needed when you retire in 20 years is $1,454,422.31, rounded to two decimal places.
b. To provide the fund calculated in part (a), you will need $193,822.38 today as a single amount if you earn only 9% per year during the 20 years preceding retirement.
a. To calculate the fund needed when you retire in 20 years, we need to use the formula for present value of an annuity:
PV = (C / r) x (1 - (1 + r)^(-n))
where PV is the present value of the annuity, C is the annual payment, r is the interest rate per period, and n is the number of periods.
Using the given values, we have:
PV = (20,000 / 0.11) x (1 - (1 + 0.11)^(-30)) = $1,454,422.31
b. To calculate the amount needed today, we need to use the formula for present value of a lump sum:
PV = FV / (1 + r)^n
where PV is the present value, FV is the future value, r is the interest rate per period, and n is the number of periods.
Using the given values, we have:
PV = 1,454,422.31 / (1 + 0.09)^20 = $193,822.38
c. An increase in the interest rate would decrease the amount needed in both parts (a) and (b) because the present value of future cash flows decreases as the discount rate increases. Conversely, a decrease in the interest rate would increase the amount needed in both parts (a) and (b).
d. To calculate the annual deposits needed, we need to use the formula for present value of an annuity again, but this time we solve for the payment (P):
P = (r x PV) / ((1 + r)^n - 1)
where P is the payment, PV is the present value, r is the interest rate per period, and n is the number of periods.
Using the given values, we have:
PV = 1,454,422.31
r = 0.10
n = 20
P = (0.10 x 1,454,422.31) / ((1 + 0.10)^20 - 1) = $13,214.44
Therefore, the annual deposits needed are $13,214.44.
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The culture in which the agricultural subsistence strategy expanded rapidly was theA)AnatolianB)NatufianC)PPNAD)PPNB
The correct option is D, The culture in which the agricultural subsistence strategy expanded rapidly was the PPNB, which stands for Pre-Pottery Neolithic B.
This culture emerged in the Levant region of the Near East around 10,000 BCE, after the preceding PPN A period. During the PPNB, people began to cultivate crops such as wheat, barley, lentils, and peas, as well as domesticate animals like goats, sheep, and cattle.
The expansion of agriculture during the PPNB led to significant changes in human societies, including the development of sedentary settlements and the emergence of complex social structures. People were able to produce surplus food, which allowed for the specialization of labor, as some individuals could focus on tasks other than food production, such as crafting or religious rituals.
The PPNB culture also saw the development of new technologies, such as the use of sickles and plows for farming, and the production of pottery for storage and cooking. This period was marked by significant cultural and technological innovations that laid the foundation for future civilizations.
In conclusion, the culture in which the agricultural subsistence strategy expanded rapidly was the PPNB, which emerged in the Near East around 10,000 BCE and saw the development of sedentary settlements, complex social structures, and new technologies.
So the correct option is D
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The culture in which the agricultural subsistence strategy expanded rapidly was the Natufian. This culture was located in the Levant region and is known for their early adoption of agricultural practices, such as the domestication of plants and animals.
The Natufian culture existed during the pre-pottery Neolithic A (PPNA) period, which was a time of significant social and cultural changes in the Middle East.
The culture in which the agricultural subsistence strategy expanded rapidly was the B) Natufian culture.
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Suppose that 5 years ago the Cisco Company sold a 15-year bond issue, which had a par value of $5,000 and a coupon rate of 7 percent. Interest is paid semiannually. If the required return is 12 percent, what is the price of the bond today? Under what condition is it sold?
a. OR $7,276.70, discounted
b. Or $7,276.70, with premium
c. Or $3,279.40, with premium
d. $3,279.40, discounted
e. OR $7,276.70, per pair
Suppose that 5 years ago the Cisco Company sold a 15-year bond issue, which had a par value of $5,000 and a coupon rate of 7 percent. Interest is paid semiannually. If the required return is 12 percent, period of bond is $3,279.40, and on discounted condition. Correct alternative is d.
Information given in the questions are as follows
Face value = 5000
Coupon rate = 7%
Years to maturity = 10 (since the 15 year bond is issued 5 years ago)
Required return = 12%
Coupon Payment =350
Maturity= 15
Market rate= 12.00%
Number of times compounded= 2
PV(0.12/2,15*2,-350/2,-5000)
= $3,279.40
Since the price of the bond is less than the face value of the bond, the bond is selling at a discount
Answer = $3,279.40, discount
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Assume that the Sharpe ratio for the market is 0.93. Stock XYZ has a correlation of 0.61 with the market, and a volatility of 0.44. Assuming CAPM, calculate Stock XYZ's risk premium. 19.97% 22.47% 021.22% 24.96% 23.71%
The answer to this question is none of the options given above. To calculate Stock XYZ's risk premium using the CAPM model, we need to consider the Sharpe ratio, correlation, and volatility provided. Here's a step-by-step explanation:
1. First, we need to find the market risk premium. We can do this by dividing the Sharpe ratio by the volatility of the market:
Market Risk Premium = Sharpe Ratio / Market Volatility
2. Given that the Sharpe ratio for the market is 0.93, and Stock XYZ's correlation with the market is 0.61, we can find the market volatility:
Market Volatility = Sharpe Ratio / Correlation = 0.93 / 0.61 ≈ 1.52
3. Now, we can calculate the market risk premium:
Market Risk Premium = 0.93 / 1.52 ≈ 0.612
4. Next, we need to find the beta of Stock XYZ. Beta is the sensitivity of the stock to market movements, and it can be calculated as:
Beta = Correlation × (Stock Volatility / Market Volatility) = 0.61 × (0.44 / 1.52) ≈ 0.61 × 0.2895 ≈ 0.1766
5. Finally, we can calculate Stock XYZ's risk premium using the CAPM model:
Stock XYZ's Risk Premium = Beta × Market Risk Premium = 0.1766 × 0.612 ≈ 0.108
To express this as a percentage, multiply by 100: 0.108 × 100 = 10.8%
None of the provided options match this result. The calculated Stock XYZ's risk premium is approximately 10.8%.
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A manufacturer of automobiles is planning a new model and wants to determine the responsiveness
of demand in a number of scenarios. The demand function for the new model is given by the
following function:
Q = 30000 – 3P + 2000ln(PA) + Y
Where Q is the quantity sold of the new model, P is the price for the new model, PA is the price of
the competitor’s model and Y is the annual income of a typical purchaser.
The new model price is planned to be £20,000 and the competitor is charging £25,000. The annual
income of a typical purchaser is £30,000.
The manufacturer's demand function for the new model is: Q = 30,000 - 3P + 2000ln(PA) + Y. Given P = £20,000, PA = £25,000, and Y = £30,000, we can calculate the demand (Q).
Step 1: Plug in the values into the demand function.
Q = 30,000 - 3(20,000) + 2000ln(25,000) + 30,000
Step 2: Simplify the equation.
Q = 30,000 - 60,000 + 2000ln(25,000) + 30,000
Step 3: Calculate 2000ln(25,000).
2000ln(25,000) ≈ 23,766
Step 4: Add the remaining numbers.
Q = -30,000 + 23,766 + 30,000
Step 5: Calculate Q.
Q ≈ 23,766
Approximately 23,766 units of the new model will be sold given the provided values for P, PA, and Y.
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assume that a compmay has a one year patent on drug j with quality w. what is the profit maximizing
The profit maximizing strategy would be to set the price of the drug at the monopoly price, which is equal to the price elasticity of demand times the marginal cost of production. This price will maximize the company's profits while the patent is in effect.
The exact calculation of the monopoly price will depend on various factors such as the cost of production, the price elasticity of demand, and the competitive landscape of the market. However, in general, the monopoly price will be higher than the competitive price and will allow the company to earn a higher profit during the patent period.
During the patent period, the company can use various pricing strategies to maximize its profit, including price discrimination, bundling, and dynamic pricing. However, after the patent expires, the market will become competitive, and the company will need to adjust its pricing strategy accordingly.
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