Answer:
25,886 per person
Explanation:
The real US GDP in the year 1998 is 7636.4 billion
The US population was 295 million
Therefore thecapitapital real GDP can be calculated as follows
= 7636.4 billion/295 million
= 25,886 per person
a) Take a real time example of a company of your own choice working in Pakistan and then discuss the factors that lead to pressure for local responsiveness. Discuss it in detail. Draw diagram to show the effect.
Answer:
This responsiveness also promotes the local market orientation of a subsidiary and therefore the strength of its existing network with the businessmen and government authorities.
Explanation:
Usually, firms working within the global market confront two sorts of competitive pressure. They face pressure to scale back costs and pressure to react locally. These competing forces throw a corporation into conflict. It's going to also need a corporation to supply a consistent product on the international market to downstream the experience curve as soon as feasible. In response to local pressures, however, it's necessary for a firm to differentiate its product offering and marketing strategy from one country to a different in an effort to satisfy the various demands arising from domestic consumer preferences, business practices, channels of distribution, competitive conditions and public policies. Because it's going to entail substantial redundancy and a scarcity of product standards to adapt products to varied domestic needs, the result could also be a rise in prices.
While some organizations, like Company A, face a high to scale back cost and low for the reaction of locally, while others, like Company B, face low to scale back costs and high for local reaction, many companies are within the situation of Company C. It suggests and supports three layers of variables, including environmental, structural, and organizational responsiveness. The analysis of 168 MNE companies within the People's Republic of China shows that environmental complexity and therefore the uniqueness of business culture increase local reaction. Structural variables like the intensity of competition, heterogeneity of demand and localisation of components increase local reaction.
Suppose a chair manufacturer finds that the marginal rate of technical substitution (MRTS) of capital for labor in her production process is substantially than the ratio of the wage rate for assembly-line labor (w) to the rental rate on machinery (r). How should she alter her use of labor and capital to minimize the cost of production? Holding output constant, the chair manufacturer should use ▼ less more labor and ▼ more less capital.
Answer:
The chair manufacturer should use less labor and more capital.
Explanation:
Note: This question is not complete because the important word less is omitted. The complete question is therefore provided before answering the question as follows:
Suppose a chair manufacturer finds that the marginal rate of technical substitution (MRTS) of capital for labor in her production process is substantially less than the ratio of the wage rate for assembly-line labor (w) to the rental rate on machinery (r). How should she alter her use of labor and capital to minimize the cost of production? Holding output constant, the chair manufacturer should use [less/more] labor and [more/less] capital.
Explanation of the answer is now provided as follows:
The marginal rate of technical substitution (MRST) is the amount by which the quantity of one input must be reduced when one more unit of another input is used to keep output constant.
In order to minimize cost of production while holding output constant, when the MRTS of capital for labor is substantially greater than the ratio of w to r, it implies that less capital and more labor should be used; but when the MRTS of capital for labor is substantially less than the ratio of w to r, it implies that more capital and less labor should be used.
Based on the above explanation, the chair manufacturer should use less labor and more capital.
Avery Company has two divisions, Polk and Bishop. Polk produces an item that Bishop could use in its production. Bishop currently is purchasing 26,000 units from an outside supplier for $16 per unit. Polk is currently operating at less than its full capacity of 630,000 units and has variable costs of $9 per unit. The full cost to manufacture the unit is $12. Polk currently sells 460,000 units at a selling price of $18 per unit.
a. What will be the effect on Avery Company’s operating profit if the transfer is made internally?
b. What is the minimum transfer price from Polk’s perspective?
c. What is the maximum transfer price from Bishop’s perspective?
Answer:
a. The effect is that Avery Company’s operating profit will increase by $182,000 if the transfer is made internally.
b. Minimum transfer price = $9
c. Maximum transfer price from Bishop’s perspective = $16.
Explanation:
a. What will be the effect on Avery Company’s operating profit if the transfer is made internally?
To determine this, fixed cost is ignored because it considered irrelevant. Therefore, we have:
Profit per unit = Purchase price from outside - Variable cost of production internally = $16 - $9 = $7
Total increment in operating profit = Current purchase unit of Bishop * Profit per unit = 26,000 * $7 = $182,000
Therefore, Avery Company’s operating profit will increase by $182,000 if the transfer is made internally.
b. What is the minimum transfer price from Polk’s perspective?
Since Polk is currently operating at less than its full capacity, this implies that it will not incur additional fixed cost to produce current purchase units of Bishop. Therefore, only its variable cost of $9 will have to recovered. By implication, we have:
Minimum transfer price = Variable cost = $9
c. What is the maximum transfer price from Bishop’s perspective?
Any price that is higher than $16 at which Bishop is currently purchasing from an outside supplier will result in a loss for Bishop and the increment profit of $182,000 will be lost by Avery Company. This therefore implies that:
Maximum transfer price from Bishop’s perspective = Price at which Bishop is currently purchasing from an outside supplier = $16
Gabbe Industries is a division of a major corporation. Last year the division had total sales of $23,826,400, net operating income of $2,835,342, and average operating assets of $9,164,000. The company's minimum required rate of return is 19%.
Answer:
a. Division margin:
= Net operating income / Total sales
= 2,835,342 / 23,826,400
= 11.9%
b. Division turnover:
= Sales / Total assets
= 23,826,400 / 9,164,000
= 2.6 times
c. Division ROI:
= Net operating income / Total assets
= 2,835,342 / 9,164,000
= 30.94%
How many shares are held as treasury stock by Coca-Cola at December 31, 2015, and by PepsiCo at December 26, 2015
Answer:
December 31 ,2015 Coca cola and December 26, 2015
Use the following selected balance sheet and income statement information for Caroline Supply Co. (in millions) to compute asset turnover (AT) to the nearest hundredth of a percent.
Operating profit before tax Earnings without interest expense (EWI) Average total assets Sales Tax rate on operating profit
$58,300 $93,400 $360,600 $1,135,420 35%
Answer:
3.15 times
Explanation:
Asset turnover = Sales revenue / Average total assets
Asset turnover = $1,135,420 / $360,600
Asset turnover = 3.15 times
The Abner Corporation, a retail seller of television sets, wants to determine how many television sets it must sell to earn a profit of $10,000 per month. The price of each television set is $300, and the average variable cost is $100. What is the required sales volume if the Abner Corporation’s monthly fixed costs are $5,000 per month?
Answer: 75
Explanation:
The required sales volume if the Abner Corporation’s monthly fixed costs are $5,000 per month will be:
Required sales = (Fixed cost + target profit) / (Selling price - AVC)
= (5,000 + 10,000) / (300 - 100)
= 15,000 / 200
= 75
Therefore, the required sales volume is 75.
Winner Corporation acquired 80 percent of the common shares and 70 percent of the preferred shares of First Corporation at underlying book value on January 1, 20X9. At that date, the fair value of the noncontrolling interest in First's common stock was equal to 20 percent of the book value of its common stock. First's balance sheet at the time of acquisition contained the following balances:
Total Assets $600,000 Total Liabilities $90,000
Preferred Stock 100,000
Common Stock 150,000
Retained Earnings 260,000
Total Assets $600,000 Total Liabilities and
Equities $600,000
The preferred shares are cumulative and have a 10 percent annual dividend rate and are four years in arrears on January 1, 20X9. All of the $5 par value preferred shares are callable at $6 per share. During 20X9, Shovel reported net income of $100,000 and paid no dividends.
Required information
Based on the preceding information, what is First's contribution to consolidated net income for 20X9?
a. $80,000
b. $100,000
c. $90,000
d. $50,000
Answer:
b. $100,000
Explanation:
Based on the information given , the FIRST'S CONTRIBUTION TO CONSOLIDATED NET INCOME for 20X9 will be NET INCOME amount of $100,000 because During the year 20X9, the company reported NET INCOME of $100,000 in which they paid no dividends.
Therefore First's contribution to consolidated net income for 20X9 is $100,000
Mellilo Corporation issued $4.7 million of 20-year, 9.5 percent bonds on July 1, 2021, at 98. Interest is due on June 30 and December 31 of each year, and all of the bonds in the issue mature on June 30, 2041. Mellilo's fiscal year ends on December 31. Prepare the following journal entries.
Answer:
On Issue date
July 1, 2021
Debit : Cash $4.606 million
Credit : Bonds Payable $4.606 million
Explanation:
The journal entry on Issue date include a debit of Cash and Credit to Bond Payable at discount price of 98 % ($4.606 million).
Hillside Manufacturing Company uses 2,000 units of bearings per year. The bearings are purchased from a supplier in Florida. The following information is known for the problem:
Annual demand, D 2.000 units $10
Purchase price per unit, P
Holding cost per unit per year expressed as a percent of per-unit purchase price 20% $125
Ordering cost per order. S
Lead time. L 6 days 250
Number of working days per year
Answer the following questions. Write your final answer only (without intermediate steps) for the fill-in-the-blank questions.
Question 2 (2 points) The holding cost (H) = $ A/ per unit per year. Use 2-decimal accuracy for the final answer, e.g., 0.12, when necessary.
Question 3 (2 points) The economic order quantity (EOQ) = units. Round the final answer (if it is not an integer) to the nearest integer.
Question 4 (2 points) Based on the EOQ, the average inventory = A units. Round the final answer (if it is not an integer) to the nearest integer.
Question 5 (2 points) A/ Total annual inventory holding cost = $ . Round the final answer (if it is not an integer) to the nearest integer.
Question 6 (2 points) The optimal number of orders per year = A orders. Round the final answer (if it is not an integer) to the nearest integer.
Question 7 (2 points) Total annual inventory cost (excluding the purchase cost) = $ A Round the final answer (if it is not an integer) to the nearest integer
Question 8 (2 points) A units. Round Reorder point (ROP) = the final answer (if it is not an integer) to the nearest integer.
Question 9 (2 points) If the management decides to order 2,000 units (instead of the EOQ quantity obtained above) per order, the total annual inventory cost (excluding the purchase cost) = $ A Round the final answer (if it is not an integer) to the nearest integer.
Answer:
2. holding cost is $2
3. EOQ = 500 units
4. Average inventory = 250units
5. total annual hoding cost = $500
6. number of orders is 4
7. total annual inventory = $1000
8. reorder point = 48
9. $2125
Explanation:
2. holding cost = 20% * $10
the holding cost is 20 percent of the purchase price for each unit
= 0.2*10
= $2.00
3. the EOQ
= 2*2000*$125/$2
= 250000
[tex]EOQ=\sqrt{250000}[/tex]
= 500 units
4.average inventory = EOQ/2
= 500/2 = 250 units
5. total annual hoding cost = average inventory * holding cost
= 250*2
= $500
6. number of orders= 2000 units/EOQ
= 2000/500
= 4 0rders
7. total annual inventory cost = ordering cost annual + holding cost annual
ordering annual cost = 2000/500*125
= 500
total annual inventory cost = 500 + 500 = $1000
8. reorder point
wwe first calculate the daily demand; = 2000/250 = 8
ROP = 8*6 = 48
9. annual ordring = 2000/2000 * 125
= $125
annual holding = 2000/2 * holding cost of $2
= $2000
total annual inventory = 125 + 2000
= $2125
Kuley plans to retire in 8 years with $263,700 in her account, which has an annual return of 8.17 percent. If she receives annual payments of X, with her first payment of X received in 8 years and her last payment of X received in 15 years, then what is X, the amount of each payment
Answer:
Kuley
If she receives annual payments of X, with her first payment of X received in 8 years and her last payment of X received in 15 years, then the amount of each payment is:
X = $50,944.35
Explanation:
a) Data and Calculations:
Amount in savings account in 8 years' time = $263,700
Annual return rate = 8.17%
Period of savings from Year 8 to Year 15 = 7 years
Annual payments = X
X = $50,944.35
From an online financial calculator, the payment is determined as follows:
N (# of periods) 7
I/Y (Interest per year) 8.17
PV (Present Value) 263700
FV (Future Value) 0
Results
PMT = $50,944.35
Sum of all periodic payments $356,610.45
Total Interest $92,910.45
The Bronco Corporation exchanged land for equipment. The land had a book value of $131,000 and a fair value of $172,000. Bronco received $21,000 from the owner of the equipment to complete the exchange which has commercial substance. Required: 1. What is the fair value of the equipment
Answer: $151,000
Explanation:
The fair value of the equipment is the amount that was less than the fair value of land by the amount of cash that the equipment owner had to pay to complete the transaction:
Fair value of equipment = Fair value of land - Cash paid by owner of equipment
= 172,000 - 21,000
= $151,000
Suppose that the price of a rental car (Prc) is $50 while the price of a flight (Pfl) is $85. Also, suppose that the marginal utility of a rental car (MUrc) is 20 utils while the marginal utility of flying (MUfl) is 30 utils. What is the best advice for this consumer?
Answer:
Consumers should choose to take the flight.
Explanation:
The price of a rental car = $50
Marginal utility from the car = 20 utils
Now find the per dollar utility from car = $50 / 20 = 2.5
The price of a flight = $85
Marginal utility from the flight = 30 utils
Now find the per dollar utility from flight = $85 / 30 = 2.83
Since the per dollar, MU is greater in the case of flight so consumers should choose to take the flight.
Gary Marks is paid on a monthly basis. For the month of January of the current year, he earned a total of $9,138. FICA tax for Social Security is 6.2% on the first $128,400 of earnings each calendar year and the FICA tax for Medicare is 1.45% of all earnings. The FUTA tax rate is 0.6%, and the SUTA tax rate is 5.4%. Both unemployment taxes are applied to the first $7,000 of an employee's pay. The amount of Federal Income Tax withheld from his earnings was $1,516.27. What is the amount of the employer's payroll taxes expenses for this employee
Answer:
$ 1,119.06
Explanation:
It is given that :
Gary Marks total earning = $ 9,138
The social security tax = 6.2%
The Medicare tax = 1.45%
We known, the FUTA and the SUTA must only be applied to the first $7000 earned from Gary's pay.
So, the employer's payroll taxes expenses = Social security + Medicare + FUTA + SUTA
= ($9,138 x 6.2%) + ($9,138 x 1.45%) + ($7000 x 0.6%) + ($7000 x 5.4%)
= 566.56 + 132.5 + 42 + 378
= $ 1,119.06
Therefore, the amount of the employer's payroll taxes expenses is $1,119.06
Betty Vinson improperly capitalized line costs at her boss's direction. Which company did she work for
Answer: WorldCom
Explanation:
The WorldCom scandal of 2002 was the worst one in U.S. history and led to shareholders losing over $30 billion as a result of share prices falling drastically when it was revealed that the company had been making fraudulent accounting entries to look successful when it fact it had been losing money.
Betty Vinson was the company's Director of Corporate Reporting and her boss, CEO Bernie Ebbers, pressured her into making fraudulent entries because it was said that he "didn't want to disappoint Wall Street". This scandal was one of those that directly led to the Sarbanes-Oxley Act being passed.
When something is evaluated according to ______, this is called finding the value on an ad valorem basis.
Answer:
its value.
Explanation:
Ad valorem is a Latin word for "according to value" and as such it simply means to evaluate something according to its value.
Hence, when something is evaluated according to its value, this is called finding the value on an ad valorem basis.
Taxation can be defined as the involuntary or compulsory fees levied on individuals or business entities by the government to generate revenues used for funding public institutions and activities.
In Taxation, we have what is referred to as ad valorem tax which refers to a property tax.
Property tax is a type of tax that is charged or levied based on the value of a person's home or business. Thus, it is mainly taxed on physical assets or properties such as land, building, cars, business, etc.
Over the past four years, Hashwari Corporation reported sales revenue and warranty expense as follows.
2016 2017 2018 2019
Sales revenue $5,000,000 $5,200,000 $5,382,000 $5,704,920
Warranty expense 105,200 104,100 118,500 108,400
We wish to reformulate the income statement to reflect a constant proportion of warranty expense to sales over the four-year period. What is our warranty expense adjustment for each year?
Answer:
Missing word "Average warranty to sales rate is 2.05%"
Adjusted expense and Adjustment required
2014 2015 2016 2017
Sales revenue $5,000,000 $5,200,000 $5,382,000 $5,704,920
Average warranty to sales rate 2.05% 2.05% 2.05% 2.05%
Adjusted warranty expense $102,500 $106,600 $110,331 $116,951
Actual warranty expense $105,200 $104,100 $118,500 $108,400
Adjustment required -$2,700 $2,500 -$8,169 $8,551
The quantity demanded x for a product is inversely proportional to the cube of the price p for p > 1. When the price is $10 per unit, the quantity demanded is 64 units. The initial cost is $140 and the cost per unit is $4. What price will yield a maximum profit? (Round your answer to two decimal places.)
$______
Answer:
$6.00
Explanation:
Given data
quantity demanded ( x ) ∝ 1 / p^3 for p > 1
when p = $10/unit , x = 64
initial cost = $140, cost per unit = $4
Determine the price that will yield a maximum profit
x = k/p^3 ----- ( 1 ). when x = 64 , p = $10 , k = constant
64 = k/10^3
k = 64 * ( 10^3 )
= 64000
back to equation 1
x = 64000 / p^3
∴ p = 40 / ∛x
next calculate the value of revenue generated
Revenue(Rx) = P(price ) * x ( quantity )
= 40 / ∛x * x = 40 x^2/3
next calculate Total cost of product
C(x) = 140 + 4x
Maximum Profit generated = R(x) - C(x) = 0
= 40x^2/3 - 140 + 4x = 0
= 40(2/3) x^(2/3 -1) - 0 - 4 = 0
∴ ∛x = 20/3 ∴ x = (20/3 ) ^3 = 296
profit is maximum at x(quantity demanded ) = 296 units
hence the price that will yield a maximum profit
P = 40 / ∛x
= ( 40 / (20/3) ) = $6
How do global logistical systems influence the 4Ps of marketing (price, product, place, and promotion)?
Answer:
In simple words, Because of customised backing to miniscule distributors, fast motion of components, detecting price levels from resting some other nation like China, providing product lines from one nation to some other nation with the assistance of a representative, internet assistance, and even product promotion, global logistic systems have a significant impact on marketing 4Ps like price, product, place, and promotion.
When Chernobyl melted down in the Soviet Union, the: a. price of U.S. basketballs increased. b. prices of assets reacted slowly to the information. c. price of U.S. potatoes increased. d. stock prices of U.S. nuclear plants increased.
Answer: d. stock prices of U.S. nuclear plants increased.
Explanation:
Chernobyl was a nuclear power plant in the former Soviet Union that was being used to produce electricity until it suffered a meltdown that effectively rendered the surrounding areas unlivable.
In response to this disaster, the stock prices of U.S. nuclear power plants went up because the Soviet meltdown not only reduced the supply of nuclear powered electricity but also showed that American engineering was superior and so people bought more American nuclear plant shares which took its price up.
Your boss wants to set safety stock levels correctly to ensure an 87.9% service level. She needs your answer right away. What should the safety stock level be given that you know:
Average replenishment cycle is 10 days
Standard deviation of daily demand is 12 units
Average daily demand is 100 units
Standard deviation of the replenishment cycle is 3 days
a. 57 units
b. 188 units
c. 302 units
d. 354 units
e. 1,000 units
In purchasing an existing business, Alice has decided to lease the equipment and fixtures from the original owner rather than purchasing it outright to save money initially. This is an example of ______.
Answer: thinning the assets
Explanation:
Thinning the assets refers to the reduction of the burden of an asset on the buyer by the seller do that the business can be priced at a reasonable value for the buyer. It is done to make a business more affordable.
Since Alice decided to lease the equipment and fixtures from the original owner rather than buying it outright to save money initially, this is thinning the assets.
Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land 5 years ago for $9,639,708 in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $3,650,288. An engineer was hired to study the land at a cost of $810,081, and her conclusion was that the land can support the new manufacturing facility. The company wants to build its new manufacturing plant on this land; the plant will cost $6,880,840 million to build, and the site requires $529,656 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?
Answer:
the proper cash flow amount is $11,060,784
Explanation:
The computation of the proper cash flow amount is shown below:
= land value + plant value + grading value
= $3,650,288 + 6,880,840 + $529,656
= $11,060,784
Hence, the proper cash flow amount is $11,060,784
So the same should be considered and relevant
The journal entry to record direct labor used in process costing is a(n):___________
a. decrease in assets and a decrease in liabilities.
b. increase in assets and an increase in liabilities.
c. decrease in assets and a decrease in equity.
d. increase in assets and an increase in equity.
Answer:
b. increase in assets and an increase in liabilities.
Explanation:
The journal entry to record the direct labor cost used is shown below:
Work in process Dr
To wages payable
(Being the direct labor cost used is recorded)
Here the work in process is debited as it increased the assets and credited the wages payable as it also increased the liabilities
The following data are from the financial statements of the Riverton Company.
Current assets $55,000
Total liabilities $95,000
Total assets 125,000
Net income 18,000
Current liabilities 25,000
Sales 275,000
Answer:
then what i have to found
In the case of an auto accident conflict over which insurance should pay is a common reason for rejection. True False
Answer:
True
Explanation:
When damages exceed the limits defined in the insurance policy, the insurer may deny the claim. This is usually the case when accident is due to negligence of driver. The insurance company may cover partial or none of the claim.
how to assess a peers written assignment
I don't understand ur question
Below is financial information for two sporting goods retailers. Extreme Sports Company operates a retail business and franchising business. At the end 2011, Extreme Sports had 263 Company-owned and 120 franchise-operated retail stores. Extreme's stores are located in suburban, strip mall and regional mall locations, the company operates in 32 states. All Sports Corporation sells sporting goods and related products at over 2,500 Company-operated retail stores.
Selected Data for All Sports and Extreme Sports (amounts in millions):
All Sports Extreme Sports
Sales $5,320 $1,344
Cost of Goods Sold 3,897 887
Interest Expense 138 43
Net Income 212 33
Average Accounts Receivable 114 18
Average Inventory 998 286
Average Fixed Assets 1,163 130
Average Total Assets 2,472 662
Average Tax Rate 40% 40%
Calculate the following ratios for All Sports and Extreme Sports: If required, round your answers to two decimal places.
Find the following for each: All Sports / Extreme Sports
a. Return on assets
b. Profit Margin for ROA
c. Assets turnover
d. Accounts receivable turnover
e. Inventory turnover
f. Fixed asset turnover
Answer:
All Sports Company and Extreme Sports Company
All Sports Extreme Sports
a. Return on assets (ROA) = Profit margin * Assets turnover
= 3.98%*2.15 2.46%*2.03
= 8.56% 4.99%
b. Profit Margin for ROA = Net income/Sales
= ($212/5,320 * 100) ($33/1,344 * 100)
= 3.98% 2.46%
c. Assets turnover = Sales/Total assets
= $5,320/$2,472 $1,344/$662
= 2.15 2.03
d. Accounts receivable turnover = Credit Sales/Average receivable
= $5,320/$114 $1,344/$18
= 46.67x 74.67x
e. Inventory turnover = Cost of goods sold/Average Inventory
= $3,897/$998 $887/$286
= 3.9x 3.10x
f. Fixed asset turnover = Sales/Fixed assets
= $5,320/$1,163 $1,344/$130
= 4.57x 1.03x
Explanation:
a) Data and Calculations:
All Sports Extreme Sports
Sales $5,320 $1,344
Cost of Goods Sold 3,897 887
Interest Expense 138 43
Net Income 212 33
Average Accounts Receivable 114 18
Average Inventory 998 286
Average Fixed Assets 1,163 130
Average Total Assets 2,472 662
Average Tax Rate 40% 40%
Alpha Moose Transporters has a current stock price of $33.35 per share, and is expected to pay a per-share dividend of $1.36 at the end of next year. The company’s earnings’ and dividends’ growth rate are expected to grow at the constant rate of 8.70% into the foreseeable future. If Alpha Moose expects to incur flotation costs of 5.00% of the value of its newly-raised equity funds, then the flotation-adjusted (net) cost of its new common stock (rounded to two decimal places) should be
Answer:
Alpha Moose Transporters
If Alpha Moose expects to incur flotation costs of 5.00% of the value of its newly-raised equity funds, then the flotation-adjusted (net) cost of its new common stock (rounded to two decimal places) should be:
= $30.84.
Explanation:
a) Data and Calculations:
Current stock price = $33.35 per share
Dividend per share = $1.36
Flotation costs = 5.00%
Flotation-adjusted stock price = $31.68 ($33.35 * 0.95)
Expected dividend growth rate = 8.70%
Expected rate of returns = 4.29% ($1.36/$31.68 * 100)
Cost of new common stock = Dividend per share/(Expected rate of returns - Dividend growth rate)
= $1.36/(0.0429 - 0.087)
= $1.36/0.0441
= $30.84
What is the present value of an investment that will pay $2,000 at the end of the year when interest is compounded annually at 5.10%
Answer:
the present value of an investment is $1,902.94
Explanation:
The computation of the present value of an investment is given below:
present value
= Future value ÷ (1 + rate of interest)^time period
=$2,000 ÷ (1+.051)^1
= $2,000 ÷ 1.051
= $1902.94
Hence, the present value of an investment is $1,902.94
