The stock price would be $100 per share without the marketing campaign investment and $111 per share with the investment commitment.
To calculate the stock price, we need to use the dividend discount model. This model calculates the present value of future dividends, which we can use to estimate the stock price.
Without the marketing campaign investment, the current earnings of Sarro Shipping of $1 million would be distributed among the 100,000 shares outstanding. This gives us a dividend per share of $10 ($1,000,000 / 100,000). Using the dividend discount model, we can calculate the stock price as follows:
Stock price = Dividend per share / (Discount rate - Dividend growth rate)
Since Sarro Shipping is paying out all of its earnings, the dividend growth rate is zero. The discount rate is given as 10%, so we can calculate the stock price as:
Stock price = $10 / (0.10 - 0) = $100 per share
Now, if the company invests $1 million in a marketing campaign, it will generate an additional $210,000 per period. This will increase the company's earnings to $1.21 million ($1 million + $210,000).
However, this will require the company to retain $1 million of earnings at the end of period 1 for the investment. So, the dividend per share will be reduced to $11.10 ($1,210,000 / 100,000). Using the dividend discount model again, we can calculate the stock price as follows:
Stock price = Dividend per share / (Discount rate - Dividend growth rate)
Stock price = $11.10 / (0.10 - 0) = $111 per share
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NCG Ltd has just issued $5 million worth of 90-day bank bills at the current market interest rate of 6.25% p.a. The total dollar amount NCG Ltd will receive from this issue is closest to:
Group of answer choices
$4,874,115.
$4,911,786.
$4,924,115.
$4,936,443.
The total dollar amount NCG Ltd will receive from issuing $5 million worth of 90-day bank bills at the current market interest rate of 6.25% p.a. is closest to $4,924,115. Therefore, the correct option is option 3.
1. Convert the annual interest rate to a daily rate:
(6.25% / 365 days) = 0.01712% per day
2. Calculate the total interest for 90 days:
(0.01712% * 90 days) = 1.541% total interest
3. Find the dollar amount of the total interest:
($5,000,000 * 1.541%) = $77,050
4. Subtract the total interest from the face value:
($5,000,000 - $77,050) = $4,922,950
The total dollar amount NCG Ltd will receive from this issue is closest to $4,924,115. Hence, the correct answer is option 3: $4,924,115.
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3iii. suppose this firm operates in perfectly competitive markets, and the market wage rate is $32 per worker per hour. how many workers does the following perfectly competitive firm want to hire to maximize profits? a. 27 b. 28 c. 29 d. 30 e. 31
Since the firm cannot hire a fractional number of workers, the profit-maximizing number of workers to hire if the market wage rate is $20 per worker per hour is 12 workers.
To determine the profit-maximizing number of workers for a perfectly competitive firm, we need to find the number of workers that equates the marginal cost of labor to the marginal revenue product of labor.
Given that the marginal product of labor is 25 units and the price of the output is $10, the marginal revenue product of labor is:
MRP = marginal product of labor x price of output
= 25 x $10
= $250
The marginal cost of labor for the firm is the wage rate, which is $20 per worker per hour.
To maximize profits, the firm should hire workers up to the point where the MRP equals the wage rate. Thus, the profit-maximizing number of workers is:
MRP = wage rate
$250 = $20 per worker per hour x n workers
n = 12.5 workers
Since the firm cannot hire a fractional number of workers, it should hire 12 workers to maximize its profits.
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The complete question is :
If the marginal product of labor for a perfectly competitive firm is 25 units and the price of its output is $10, what is the profit-maximizing number of workers to hire if the market wage rate is $20 per worker per hour?
Carnes Cosmetics Co.'s stock price is $54, and it recently paid a $1.50 dividend. This dividend is expected to grow by 27% for the next 3 years, then grow forever at a constant rate, g; and rs = 14%. At what constant rate is the stock expected to grow after Year 3? Do not round intermediate calculations. Round your answer to two decimal places
Carnes Cosmetics Co.'s stock is expected to grow at a constant rate of 14% after Year 3.
The constant rate of growth for Carnes Cosmetics Co.'s stock after Year 3 is calculated using the Gordon Growth Model. This model states that the dividend growth rate of a stock must equal the required rate of return (rs) of the stock.
Therefore, the constant rate of growth (g) is equal to rs. In this case, the required rate of return of the stock is 14%, so the constant rate of growth is also equal to 14%. Thus, stock is expected to grow at a constant rate of 14% after Year 3.
The Gordon Growth Model is a useful tool for investors and analysts who wish to determine the required rate of return of a stock. By using this model, investors can accurately determine the rate of growth at which a stock is expected to grow, allowing them to make informed decisions regarding the stock.
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Carnes Cosmetics Co.'s stock is expected to grow at a constant rate of 14% after Year 3.
The constant rate of growth for Carnes Cosmetics Co.'s stock after Year 3 is calculated using the Gordon Growth Model. This model states that the dividend growth rate of a stock must equal the required rate of return (rs) of the stock.
Therefore, the constant rate of growth (g) is equal to rs. In this case, the required rate of return of the stock is 14%, so the constant rate of growth is also equal to 14%. Thus, stock is expected to grow at a constant rate of 14% after Year 3.
The Gordon Growth Model is a useful tool for investors and analysts who wish to determine the required rate of return of a stock. By using this model, investors can accurately determine the rate of growth at which a stock is expected to grow, allowing them to make informed decisions regarding the stock.
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A stock recently paid a $2/share dividend. They will grow this dividend by 10%/year in each of the next 3 years. Afterward, they will maintain a zero growth dividend policy, forever. R=15%. Calculate the stock price.
The stock price is $20.78 per share.To calculate the stock price, we need to find the present value of all future dividends discounted at the required rate of return.
In this case, the dividends will grow at a rate of 10% per year for the next 3 years, and then maintain a zero growth policy. So, we can calculate the present value of the dividends in the first three years as follows:
PV of dividend in year 1 = $2 / (1 + 0.15) = $1.74
PV of dividend in year 2 = $2.20 / (1 + 0.15)² = $1.57
PV of dividend in year 3 = $2.42 / (1 + 0.15)³ = $1.34
Next, we can calculate the present value of all future dividends beyond year 3, which will be a perpetuity with a zero growth rate:
PV of future dividends beyond year 3 = $2.42 / (0.15 - 0) = $16.13
Therefore, the total present value of all future dividends is:
Total PV of dividends = $1.74 + $1.57 + $1.34 + $16.13 = $20.78
Finally, we can calculate the stock price as the present value of all future dividends:
Stock price = $20.78
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What is an advantage of buying on account?
OA. It is free of legal ramifications.
OB. It is the most cost-effective option.
OC. It is convenient and easy.
OD. It is the simplest option.
Answer: OC - It is convenient and easy
Explanation: Buying on account, also known as credit purchasing, allows customers to make purchases without immediate payment, which can be convenient and easy. Customers can receive goods or services upfront and defer payment until a later date, which can provide flexibility in managing cash flow and budgeting.
Here is an article on the advantages and disadvantages of buying on credit: https://extensionpublications.unl.edu/assets/pdf/g1802.pdf
Answer:The advantages of buying on account is: OC.it is convenient and easy.
Explanation:
Buying goods on account is "convenient and easy' because one can buy stuff on credit using this method. This ensures that the person can buy the goods and services while paying half or no amount for the goods.
however, the balance will remain in the credit account,until the payment has been made in cash/via account. till then, the buyer will remain liable to the seller/service provider.
4 POINTS COST BEHAVIOR, ANALYSIS, AND USE The following information from the Thunderball Co., a merchandising business, is available for the current year: a Sales in Units June 11,000 Julaugust 8,000
The information provided indicates the number of units sold by Thunderball Co. in June and July/August.
Cost behavior refers to how costs change as the level of activity changes. By analyzing sales data, Thunderball Co. can determine the behavior of costs in relation to changes in sales volume.
This information can be used to make informed decisions about pricing strategies, production levels, and inventory management. Additionally, by comparing sales data over time, Thunderball Co. can identify trends and make predictions about future sales and cost behavior.
Overall, understanding cost behavior is essential for effective financial management and decision-making in any business.
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A firm issues a 20-year semi-annual payment bond, which is priced at $1213.55. The coupon rate of the bond is 9.00%. The tax rate is 37 percent. What is the after-tax cost of debt? % (to two decimal places)
The after-tax cost of debt is the cost of debt adjusted for the tax savings due to the tax-deductibility of interest payments. The after-tax cost of debt is 4.41%.
The formula for after-tax cost of debt is: After-tax cost of debt = pre-tax cost of debt × (1 - tax rate). First, we need to calculate the pre-tax cost of debt, which can be found using the bond pricing formula:
Bond price = [tex](C × [1 - (1 + r)^(-n)] / r) + (M / (1 + r)^n)[/tex] Where: C = coupon payment, r = semi-annual yield to maturity, n = number of semi-annual periods, M = par value of the bond, Substituting the given values into the formula, we get: $1213.55 = [tex]($45 × [1 - (1 + r)^(-40)] / r) + ($1000 / (1 + r)^40)[/tex]
Solving for r using a financial calculator or spreadsheet software, we get a semi-annual yield to maturity of 3.50%. Next, we can calculate the pre-tax cost of debt: Pre-tax cost of debt = semi-annual yield to maturity × 2, Pre-tax cost of debt = 3.50% × 2 = 7.00%
Finally, we can calculate the after-tax cost of debt: After-tax cost of debt = pre-tax cost of debt × (1 - tax rate) After-tax cost of debt = 7.00% × (1 - 0.37) = 4.41%. Therefore, the after-tax cost of debt is 4.41%.
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Restex has a debt-equity ratio of 0.72, an equity cost of capital of 15%, and a debt cost of capital of 8%. Restex's corporate tax rate is 38%, and its market capitalization is $185 million. a. If Restex's free cash flow is expected to be $10 million one year from now and will grow at a constant rate, what expected future growth rate is consistent with Restex's current market value? b. Estimate the value of Restex's interest tax shield. a. If Restex's free cash flow is expected to be $10 million one year from now and will grow at a constant rate, what expected future growth rate is consistent with Restex's current market value? If Restex's free cash flow is expected to be $10 million in one year, the expected future growth rate is ____%. (Round to two decimal places.) b. Estimate the value of Restex's interest tax shield. Interest tax shield value is $____million. (Round to the nearest million.)
9.46% is the predicted growth rate, in line with Restex's current market value.
The interest tax shield for Restex is worth $8 million (rounded to the nearest million).
a. To determine the expected future growth rate, we can use the Gordon growth model:
Market value = Free cash flow / (Cost of equity - Growth rate)
Rearranging the equation, we get:
Growth rate = Cost of equity - Free cash flow / Market value
Substituting the given values, we get:
Growth rate = 15% - $10 million / $185 million
Growth rate = 9.46%
Therefore, the expected future growth rate consistent with Restex's current market value is 9.46%.
b. The value of Restex's interest tax shield can be calculated using the formula:
Value of interest tax shield = Debt * Cost of debt * (1 - Tax rate)
Substituting the given values, we get:
Value of interest tax shield = 0.72 * $185 million * 8% * (1 - 38%)
Value of interest tax shield = $8.16 million
Therefore, the value of Restex's interest tax shield is $8 million (rounded to the nearest million).
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An operating plan can be developed for any time horizon, but most companies use a _____ horizon, with the first period being the most detailed.
6-month
10-year
5-year
12-month
3-year
An operating plan can be developed for any time horizon, but most companies use a 12-month horizon, with the first period being the most detailed.
A 12-month operating plan, also known as an annual operating plan, is a detailed plan that outlines an organization's goals and objectives for the upcoming year. It includes a detailed budget, revenue and expense projections, and performance metrics to track progress throughout the year.
While longer-term planning horizons, such as 5-year or 10-year plans, are important for strategic planning, a 12-month operating plan provides a more detailed and actionable roadmap for the short-term operational activities of the organization.
It's worth noting that some companies may also develop shorter-term operating plans, such as a 6-month or 3-year plan, depending on their specific needs and circumstances. However, the 12-month plan is the most common and widely used planning horizon for operating plans.
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question content areathomlin company forecasts that total factory overhead for the current year will be $15,500,000 with 250,000 total machine hours. year to date, the actual factory overhead is $16,000,000 and the actual machine hours are 330,000 hours. the predetermined factory overhead rate based on machine hours isa.$62 per machine hourb.$50 per machine hourc.$48 per machine hourd.$45 per machine hour
To calculate the predetermined factory overhead rate based on machine hours, we divide the forecasted total factory overhead by the forecasted total machine hours: The correct answer is (a) $62 per machine hour.
$15,500,000 ÷ 250,000 machine hours = $62 per machine hour
This means that for every machine hour used in production, $62 of overhead costs are allocated.
Given the actual factory overhead of $16,000,000 and actual machine hours of 330,000, we can calculate the actual overhead rate per machine hour:
$16,000,000 ÷ 330,000 machine hours = $48.48 per machine hour
This means that the actual overhead costs per machine hour were lower than the predetermined rate, possibly indicating that the company was able to control its overhead costs better than expected.
Therefore the correct answer is a. $62 per machine hour.
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last year the price per share of stock x increased by k percent and the earnings per share of stock x increased by m percent, where k is greater than m. by what percent did the ratio of price per share to earnings per share increase, in terms of k and m ?
The percentage increase in the ratio of price per share to earnings per share in terms of k and m is [(k - m) / (1 + m/100)] * 100%.
Let the initial price per share of stock X be P and the initial earnings per share be E.
After the price per share increased by k percent, the new price per share is:
P' = P + (k/100) * P = P(1 + k/100)
After the earnings per share increased by m percent, the new earnings per share is:
E' = E + (m/100) * E = E(1 + m/100)
Therefore, the new ratio of price per share to earnings per share is:
(P') / (E') = (P(1 + k/100)) / (E(1 + m/100))
The percentage increase in this ratio can be calculated as follows:
(P' / E') / (P / E) * 100% - 100%
= [(P(1 + k/100)) / (E(1 + m/100))] / (P / E) * 100% - 100%
= [(1 + k/100) / (1 + m/100)] * 100% - 100%
Using the fact that k > m, we can simplify this expression as follows:
[(1 + k/100) / (1 + m/100)] * 100% - 100%
= [(1 + k/100) - (1 + m/100)) / (1 + m/100)] * 100%
= [(k - m) / (1 + m/100)] * 100%
Therefore, the percentage increase in the ratio of price per share to earnings per share is [(k - m) / (1 + m/100)] * 100%.
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the periodic method uses a formula to determine the cost of goods available for sale that involves adding beginning inventory to . a. cost of goods sold b. purchases c. ending inventory d. returns
The periodic method uses a formula to determine the cost of goods available for sale that involves adding beginning inventory to the cost of goods. Thus, option A is correct.
The starting value of inventory plus the cost of products purchased equals the cost of the goods that are now on the market. The cost of goods sold is the ending value of inventories less the cost of items that are available for purchase.
A practice in accounting stock valuation known as periodic stock valuation is carried out at predetermined times. At the end of the quarter, businesses physically count their products and use the data to balance their general ledger. The remaining funds are then applied to the start of the new period. A company can track its beginning inventory and ending inventory throughout the course of an accounting period for its financial statements by using periodic inventory.
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A firm expects to receive a payment of CAD 650,000 four yearsfrom now. The risk-free rate of return is 0.86 percent in the U.S.and 2.10 percent in Canada. Assume the current exchange rate isCAD1 = $.74. How much will the payment four years from now be worth in U.S. dollars?
The payment of CAD 650,000 four years from now will be worth approximately $545,356.92 in U.S. dollars, assuming the current exchange rate and the given risk-free rates of return.
To calculate the value of CAD 650,000 in U.S. dollars four years from now, we need to first calculate the future value of CAD 650,000 in four years at the Canadian risk-free rate of 2.10 percent. Using the formula FV = PV x (1 + r)^n, where FV is the future value, PV is the present value, r is the interest rate, and n is the number of periods, we get:
FV = CAD 650,000 x (1 + 0.0210)^4
FV = CAD 738,303.31
Next, we need to convert this future value from Canadian dollars to U.S. dollars using the current exchange rate of CAD1 = $0.74. Therefore, we get:
FV in USD = CAD 738,303.31 x $0.74
FV in USD = $545,356.92
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If the current rate of interest is 9%, then the future value (FV) of an investment that pays $1,400 per year and lasts 22 years is closest to: A $88,023 OB. $123,232 OC. $52,814 OD. $105,628
To find the future value of an investment, we can use the formula:
FV = (PMT x (((1 + r)^n) - 1)) / r
Where PMT is the annual payment,
r is the interest rate, and
n is the number of years.
Plugging in the given values, we get:
FV = (1400 x (((1 + 0.09)^22) - 1)) / 0.09
FV = (1400 x 71.187) / 0.09
FV = $1,108,662.22
Therefore, the closest option is OD. $105,628.
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Explain all the possible situations which will always resultinOver absorption of overheadsUnder absorption of overhead
Overhead absorption refers to the process of allocating or apportioning indirect costs or overheads to products or services. Overhead costs are those expenses that cannot be directly linked to a specific product or service, such as rent, utilities, and administrative expenses.
Overhead absorption is important because it helps to determine the true cost of production or service, which is important for pricing decisions and profitability analysis. However, there are situations where overhead absorption may result in either over absorption or under absorption of overhead costs.
In situations where the actual overhead costs are lower than the allocated overhead costs, over absorption of overhead costs occurs. This means that the products or services are being charged with more overhead costs than they actually incur, resulting in an overstatement of profits. Conversely, under absorption of overhead occurs when the actual overhead costs are higher than the allocated overhead costs.
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under what circumstances may it make sense not to prepare a business forecast? group of answer choices the forecast horizon is 40 years. no data is readily available. the future will be no different from the past. there is no consensus among informed individuals. the industry to forecast is undergoing dramatic change.
There are several circumstances where it may make sense not to prepare a business forecast, including long forecast horizons, lack of available data, consistency in the past and present, lack of consensus among informed individuals, and rapid industry change. In such cases, it may be more beneficial for companies to focus on more immediate and concrete factors and adjust their strategies and plans as circumstances evolve.
Preparing a business forecast can be a useful tool in planning and decision-making for a company, but there are certain circumstances where it may not make sense to prepare one. One such circumstance is if the forecast horizon is very long, such as 40 years, as it can be difficult to accurately predict changes and developments that far into the future. Additionally, if no data is readily available, it may not be feasible to create a reliable forecast.
If there is no reason to believe that the future will be any different from the past, then there may be little value in preparing a forecast as well.Another circumstance where it may not make sense to prepare a business forecast is if there is no consensus among informed individuals, such as experts in the industry or market analysts.
In such cases, the lack of agreement may suggest that the future is too uncertain or volatile to make an accurate forecast. Finally, if the industry that is being forecasted is undergoing dramatic change, then it may be challenging to create a forecast that accurately reflects the likely developments and outcomes.
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Buildmazing Developers need an amount of money to expand their business. They secure a loan at an interest rate of 10,5% per year, compounded annually. The outstanding balance will be repaid in equal payments of R137 828,00 at the end of each year for the next seven years. Considering the amortisation schedule, the principle repaid during the first three years, rounded to the nearest rand, is 1. R227 891 2. R185 593 3. R83 662 4. R413 484
A. The principle repaid during the first three years of the loan is 1) R227 891.
B. The loan is for an amount not specified in the question, but we can determine the outstanding balance by using the present value formula:
PV = FV / (1 + r)^n
where PV is the present value, FV is the future value, r is the interest rate, and n is the number of years.
Using the given information, we can calculate the present value of the loan:
PV = 137828 * ((1 - (1 + 0.105)^-7) / 0.105) = R721,140.60
The outstanding balance at the end of the first year will be the present value minus the payment made:
Balance Y1 = PV - Payment Y1 = R721,140.60 - R137,828 = R583,312.60
The outstanding balance at the end of the second year will be the balance at the end of the first year plus the interest:
Balance Y2 = Balance Y1 * (1 + r) - Payment Y2 = R583,312.60 * 1.105 - R137,828 = R556,845.62
The outstanding balance at the end of the third year will be the balance at the end of the second year plus the interest:
Balance Y3 = Balance Y2 * (1 + r) - Payment Y3 = R556,845.62 * 1.105 - R137,828 = R527,684.71
The principle repaid during the first three years will be the original amount of the loan minus the outstanding balance at the end of the third year:
Principle Repaid Y1-3 = PV - Balance Y3 = R721,140.60 - R527,684.71 = R227 891.
Rounding this value to the nearest rand gives us the answer: 1) R227 891.
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Suppose that the enterprise has implicit costs of $ 500,000, and accounting costs of $4.5 million. If the firm sells 100,000 units of its products at a price $45, calculate a) its accounting profit
b) economic profit
Accounting profit is calculated by subtracting the explicit costs from the total revenue. In this case, the accounting profit would be $4.5 million (total revenue) - $4.5 million (explicit costs) = $0.
However, economic profit takes into account both explicit and implicit costs. Implicit costs are the opportunity costs associated with the resources used by the enterprise, such as the foregone income from the use of the owner's capital. To calculate economic profit, we need to subtract both explicit and implicit costs from the total revenue.
The total cost of the enterprise would be $5 million ($4.5 million in explicit costs + $500,000 in implicit costs). The total revenue generated from selling 100,000 units of its products at a price of $45 per unit would be $4.5 million.
Therefore, the economic profit would be calculated as $4.5 million (total revenue) - $5 million (total cost) = -$500,000. This means that the enterprise is making a loss of $500,000, even though it appears to be making a profit based on accounting profit alone.
It is important for businesses to consider both explicit and implicit costs in their decision-making processes to ensure that they are making informed choices about their operations. Ignoring implicit costs can lead to overestimating profits and making decisions that may not be financially sound in the long run.
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which of the following did not contribute to the russian currency crisis of 1998? an accelerated flight of capital generally deteriorating economic conditions a surprisingly healthy government surplus that was neither funding internal investment nor external debt service all of the above
The following did not contribute to the Russian currency crisis of 1998:
c. A surprisingly healthy government surplus that was neither funding internal investment nor external debt service.
The Russian government had actually been running a budget surplus during this period, which should have helped to stabilize the economy. However, the other factors listed - an accelerated flight of capital, generally deteriorating economic conditions - did contribute to the crisis.
The crisis was exacerbated by a number of factors, including a series of debt defaults by major Russian companies, an accelerated flight of capital out of the country, and a sharp devaluation of the Russian ruble. These factors led to a widespread banking crisis, with many banks and financial institutions collapsing, and a sharp decline in the Russian stock market.
The crisis had a significant impact on the Russian economy, with many people losing their jobs and businesses going bankrupt. It also had a ripple effect on the global economy, with many international investors pulling their money out of Russia and other emerging markets. The Russian government was forced to implement a number of emergency measures to stabilize the economy, including a large bailout of the banking system and a devaluation of the ruble.
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Intro You took out a loan to buy a new car. The monthly interest rate on the loan is 0.3%. You have to pay $280 every month for 60 months, starting one month from now. What is the present value of the cash flows?
Answer: The present value of the cash flows is approximately $48,885.28.
Explanation: To calculate the present value of the cash flows, you can use the formula for the present value of an annuity:
[tex]PV = PMT x [1 - (1 + r)^-n] / r[/tex]
where PV is the present value,
PMT is the payment amount,
r is the interest rate per period,
and n is the number of periods.
In this case, you're making 60 monthly payments of $280, starting one month from now. So PMT is $280, r is 0.3% per month (or 0.003), and n is 60.
Plugging in the values, we get:
[tex]PV = 280 [1 - (1 + 0.003)^-60] / 0.003[/tex]
= 280 x [1 - 0.4765] / 0.003
= 280 x 174.676
= 48,885.28
Therefore, the present value of the cash flows is approximately $48,885.28.
This means that if you were to invest this amount today at the same interest rate of 0.3% per month, you would have enough money to make all 60 payments of $280 over the next five years.
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Suppose you just purchased a 6 year. $1.000 par value bond. The coupon rate on this bond is 9% annually, with interest being paid semi-annually. If you expect to earn a 11% rate of return on this bond, how much did you pay for it? (Round your answer to two decimal point)
The answer is $1,073.64.
To calculate the price of the bond, we need to discount the future cash flows (coupon payments and par value) at the required rate of return of 11%. Since the bond pays semi-annual coupons, we need to use a semi-annual discount rate of 5.5%.
Using the bond pricing formula, we can calculate the price of the bond as follows:
Price = (C/2)/(1 + r/2) + (C/2)/(1 + r/2)^2 + ... + (C/2)/(1 + r/2)^11 + (FV)/(1 + r/2)^12
Where:
C = coupon payment = 9% x $1,000 / 2 = $45
r = required rate of return = 11% / 2 = 5.5%
FV = par value = $1,000
Plugging in the values, we get:
Price = ($45/1.055) + ($45/1.055^2) + ... + ($45/1.055^11) + ($1,000/1.055^12)
Price = $531.69 + $497.96 + ... + $318.57 + $523.04
Price = $5,903.12 / 5.5
Price = $1,073.64 (rounded to two decimal points)
Therefore, the price paid for the bond is $1,073.64.
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Sandy is allowed to spend $8. 00 to create a new candle for the candle store. Sandy told the owner she would like to sell her candles for 12. 00 each. What is snady's gross profit margin?
She earns a $4.00 gross profit on each candle she sells, which is 33.33% of the selling price.
To calculate Sandy's gross profit margin, we need to first determine the cost of producing one candle. If she is allowed to spend $8.00 to create a new candle, we can assume that the cost of producing one candle is $8.00.
To calculate the gross profit margin, we need to subtract the cost of producing one candle from the selling price of one candle, and then divide the result by the selling price. So:
Gross profit margin = (Selling price - Cost of goods sold) / Selling price
Selling price = $12.00
Cost of goods sold = $8.00
Gross profit margin = ($12.00 - $8.00) / $12.00
Gross profit margin = $4.00 / $12.00
Gross profit margin = 0.3333
So Sandy's gross profit margin is 0.3333, or 33.33%. This means that for each candle she sells, she is earning a gross profit of $4.00, which represents 33.33% of the selling price.
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Cambridge Construction Company follows the percentage-of-completion method for reporting long-term contract revenues. The percentage-of-completion is based on the cost of materials shipped to the project site as a percentage of total expected material costs. Cambridge’s major debt agreement includes restrictions on net worth, interest coverage, and minimum working capital requirements. A leading analyst claims that "the company is buying its way out of these covenants by spending cash and buying materials, even when they are not needed." Explain how this might be possible.
If Cambridge Construction Company is following the percentage-of-completion method for reporting long-term contract revenues based on the cost of materials shipped, then they may be incentivized to purchase more materials than necessary in order to increase their reported completion percentage.
This could lead to increased spending on materials, even if they are not needed for the project, which could be interpreted as an attempt to buy their way out of the debt agreement covenants.
By inflating their reported completion percentage, Cambridge may be able to convince lenders that they have enough working capital to meet their obligations, even if they are actually using cash reserves to purchase excess materials.
This practice could allow them to continue to borrow and spend, but it also carries risks of cost overruns, waste, and project delays if the excess materials are not effectively used.
Ultimately, it will be important for Cambridge to balance the pressures of meeting debt covenants with the need for responsible project management and cost control.
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intending to take a vacation, newlyweds place a continuous stream of $2,000 per year into a savings account which has a continuously compounding interest rate of 1.9%. what will be the value of this continuous stream after 3 years? round your answer to the nearest integer. do not include a dollar sign or commas in your answer.
The value of the continuous stream of $2,000 per year after 3 years, with continuous compounding interest rate of 1.9%, can be calculated using the formula for continuous compounding:
A = P * e^(rt)
where:
A = the future value of the continuous stream
P = the initial amount of the continuous stream per year ($2,000)
e = Euler's number (approximately equal to 2.71828)
r = the continuous interest rate (1.9% or 0.019 as a decimal)
t = the time period (3 years)
Plugging in the values into the formula:
A = 2000 * e^(0.019 * 3)
Using a calculator, we can calculate the value of e^(0.019 * 3) and then multiply it by $2,000 to get the approximate value of the continuous stream after 3 years.
After rounding to the nearest integer, the value of the continuous stream after 3 years would be $2,136.
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Suppose you have just won a lottery. You will receive a total of 26 annual payment, and each payment is $3,455. You will receive the first payment today. If you can earn 4.9% annual rate of return each year, how much is this lottery worth to you today? (round to the nearest dollar
This lottery is worth $71,988 today. To calculate this, you must first add up the total of all 26 payments, $3,455 x 26 = $89,430.
Then you must use a present value formula to discount the future payments to their equivalent today. The formula for present value is: PV = FV / (1 + r)^n, where FV is the total of the future payments, r is the interest rate and n is the number of periods (in this case, 26). Plugging in the numbers gives: $89,430 / (1 + 0.049)^26 = $71,988.
The present value formula is useful for calculating the current worth of an investment or asset. It takes into account the time value of money, which states that a dollar today is worth more than a dollar in the future. This is because a dollar today can be invested and earn interest over time, whereas a dollar in the future cannot. Therefore, the present value formula discounts future payments to their equivalent today.
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why does the long-run aggregate supply curve not depend on expected prices, while the short-run aggregate supply curve does? g
The long-run aggregate supply (LRAS) curve does not depend on expected prices because, in the long run, all factors of production are fully adjustable, allowing the economy to achieve its full potential output regardless of price levels. In contrast, the short-run aggregate supply (SRAS) curve depends on expected prices because, in the short run, factors such as wages and resource prices are fixed, making output and employment levels sensitive to changes in price expectations.
Because all factors of production are fully flexible in the long run, any changes in expected prices will be reflected in the costs of production, including wages. In other words, if firms expect higher prices in the future, they will adjust their production costs accordingly, such as increasing wages for workers, and this will be reflected in the LRAS curve. Therefore, the LRAS curve does not depend on expected prices, since any changes in expected prices will be incorporated into the costs of production and will not affect the overall level of aggregate output in the long run.On the other hand, the short-run aggregate supply (SRAS) curve represents the relationship between the aggregate output that firms are willing and able to supply in the short run and the general price level, assuming that some factors of production are fixed in the short run, such as capital and technology. In the short run, firms may not be able to adjust their costs of production fully, including wages, to changes in expected prices. Therefore, changes in expected prices will affect the overall level of aggregate output in the short run, and this will be reflected in the SRAS curve. As a result, the SRAS curve depends on expected prices, while the LRAS curve does not.
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The reason why the long-run aggregate supply (LRAS) curve does not depend on expected prices, while the short-run aggregate supply (SRAS) curve does, is due to the differences in economic factors and adjustments that occur in the short-run versus the long-run.
1. In the short run, the SRAS curve is affected by expected prices because of price stickiness, which is the resistance of prices to change. When businesses expect prices to increase or decrease, they adjust their production levels accordingly, which leads to fluctuations in supply. This makes the SRAS curve upward-sloping.
2. In the long run, the LRAS curve is not affected by expected prices because it is assumed that all prices, including wages and input prices, have adjusted accordingly to reach a state of equilibrium. In the long run, the economy operates at its potential output, or full employment level, which is not influenced by price expectations. As a result, the LRAS curve is vertical, indicating that the long-run aggregate supply is fixed and does not depend on price levels.
In summary, the difference between the SRAS and LRAS curves regarding expected prices is due to the adjustments and flexibility of prices and wages in the short run compared to the long run, with the long run ultimately achieving an equilibrium state where expected prices do not influence aggregate supply.
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Raymond made his annual RSP contribution of $4299 and decided to use the proceeds to purchase a Labour Sponsored Venture Capital Corporation. He lives in a province with a 8% provincial LSVCC tax credit and his marginal tax rate is 46%. What will Raymond's total tax refund be on this RSP contribution and purchase?
Please provide answer to 2 decimal places (e.g. 1234.56)
Raymond's total tax refund on his RSP contribution and LSVCC purchase will be $2,321.46.
To determine Raymond's total tax refund on his RSP contribution and purchase of a Labour Sponsored Venture Capital Corporation (LSVCC), we need to calculate the tax refunds for each component separately and then add them together.
Step 1: Calculate the tax refund on the RSP contribution.
Tax refund on RSP = RSP contribution × marginal tax rate
Tax refund on RSP = $4,299 × 46%
Tax refund on RSP = $1,977.54
Step 2: Calculate the tax refund on the LSVCC investment.
Tax refund on LSVCC = RSP contribution × provincial LSVCC tax credit rate
Tax refund on LSVCC = $4,299 × 8%
Tax refund on LSVCC = $343.92
Step 3: Add the tax refunds from both components.
Total tax refund = Tax refund on RSP + Tax refund on LSVCC
Total tax refund = $1,977.54 + $343.92
Total tax refund = $2,321.46
Thus, Raymond's total tax refund on his RSP contribution and LSVCC purchase will be $2,321.46.
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united states v. stein addressed the question of whether the constitutional rights of the defending accountants were violated when the government pressured their former employer into ending its policy of paying attorney fees. how did the court rule?
In Joined Together States v. Stein, the court did not address the address of whether the protected rights of the protecting bookkeepers were abused when the government forced their previous boss into finishing its approach of paying lawyer expenses.
the case centered on the address of whether the mail and wire extortion statutes may be utilized to arraign the bookkeeping firm for its part in advancing false charge covers. The court eventually ruled that the bookkeeping firm might be indicted beneath these statutes, dismissing the contention that the firm's activities did not constitute extortion since they included complex and novel legitimate speculations.
By and large, Joined Together States v. Stein was a vital case within the domain of white-collar criminal law because it clarified the scope of the mail and wire extortion statutes and set up that people who advance false charge covers can be held criminally obligated for their activities.
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small gatherings of deliberately selected people who participate in planned discussions that are intended to secure consumer perceptions about particular topics are called focus group. is it true or false
The given statement "small gatherings of deliberately selected people who participate in planned discussions that are intended to secure consumer perceptions about particular topics are called focus group." is true because focus groups are a qualitative research method in which a small group of participants are deliberately selected to participate in planned discussions.
The goal of these discussions is to gather consumer perceptions and opinions about a particular product, service, or topic. Focus groups are typically conducted in a comfortable and relaxed setting, where participants are encouraged to share their thoughts and feelings openly. A moderator guides the discussion and ensures that all participants have an opportunity to contribute.
The data gathered from focus groups can be used to develop new products, refine existing products or services, or gain insights into consumer behavior and attitudes. Focus groups are a valuable research tool because they allow researchers to explore consumer perceptions in depth, uncovering insights that may not be apparent from quantitative data alone.
Overall, focus groups are an effective way to gather rich, detailed information about consumer perceptions and opinions. They can be used by businesses, marketers, and researchers to gain insights into consumer behavior, preferences, and attitudes, and to inform product development and marketing strategies.
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a cylinder shaped can needs to be constructed to hold 450 cubic centimeters of soup. the material for the sides of the can costs 0.03 cents per square centimeter. the material for the top and bottom of the can need to be thicker, and costs 0.07 cents per square centimeter. find the dimensions for the can that will minimize production cost.
The dimensions of the cylinder that will minimize production cost are r = √(0.07/0.03)/2 and h = 2√(0.07/0.03).
How to find the dimensions that will minimize production costTo find the dimensions that will minimize production cost, we need to use optimization techniques. Let's first start by defining the variables we need.
Let r be the radius of the cylinder, and h be the height of the cylinder.
We know that the volume of the cylinder is given by V = πr^2h.
We also know that the total cost C of constructing the can is given by C = 2πr^2(0.07) + 2πrh(0.03).
Now, we can use calculus to find the critical points of the cost function.
We differentiate with respect to r and set it equal to zero:
dC/dr = 4πr(0.07) + 2πh(0.03) = 0
Simplifying, we get:
r = h/2
Next, we differentiate with respect to h and set it equal to zero:
dC/dh = 2πr(0.03) + 2π(0.07) = 0
Simplifying, we get:
r = √(0.07/0.03)
Substituting r = h/2 from the first equation, we get:
h = 2√(0.07/0.03)
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