Suppose that the inflation rate is 2% and the real terminal value of an investment is expected to be $82,500 in 4 years. Calculate the nominal terminal value of the investment at the end of year 4.

Answers

Answer 1

Answer: $89300.65

Explanation:

Based on the information given in the question, the nominal terminal value of the investment at the end of year 4 will be calculated thus:

Inflation rate = 2%

Real terminal value of investment = $82,500

Normal terminal value of investment will be:

= $82500 × (1+2%)⁴

= $82500 × (1 +0.02)⁴

= $82500 × 1.02⁴

= $89300.65


Related Questions

Why does the government sometimes use an expansionary fiscal policy?

Answers

Expansionary fiscal policy is used to kick-start the economy during a recession. It boosts aggregate demand, which in turn increases output and employment in the economy.

Minor Electric has received a special... Minor Electric has received a special one-time order for 1,500 light fixtures (units) at $11 per unit. Minor currently produces and sells 7,500 units at $12.00 each. This level represents 75% of its capacity. Production costs for these units are $13.50 per unit, which includes $9.00 variable cost and $4.50 fixed cost. To produce the special order, a new machine needs to be purchased at a cost of $625 with a zero salvage value. Management expects no other changes in costs as a result of the additional production. If Minor wishes to earn $1,075 on the special order, the size of the order would need to be:_______.
a. 3,400 units
b. 683 units
c. 1,700 units
d. 136 units
e. 850 units

Answers

Answer:

e. 850 units

Explanation:

Desired profit = $1,075

New machine cost = $625

Variable cost per unit = $9 per unit

Sale price per unit = $11 per unit

Order size = (Desired profit + Machine cost) / Contribution margin per unit

Order size = ($1,075 + $625) / ($11 - $9)

Order size = $1,700 / $2

Order size = 850 units

So therefore, if Minor wishes to earn $1,075 on the special order, the size of the order would need to be 850 units.

The following monthly data are available for Bonita Industries. which produces only one product: Selling price per unit, $42; Unit variable expenses, $14; Total fixed expenses, $42000; Actual sales for the month of June, 5000 units. How much is the margin of safety for the company for June

Answers

Answer:

70%

Explanation:

Margin of safety is the amount of sales a company makes in excess of the breakeven point  

Margin of safety = (actual sales -  break-even sales) / actual sales

Breakeven quantity are the number of  units produced and sold at which net income is zero

Breakeven quantity = fixed cost / price – variable cost per unit /

$42000 / (42 -14) = 1500

(5000 - 1500) / 5000 = 70%

Sales-Related Transactions
Merchandise is sold on account to a customer for $7,400, terms FOB shipping point, 1/10, n/30. The seller
paid the freight of $390. Determine the following:
a.
Amount of the sale

b.
Amount debited to Accounts Receivable

c.
Amount received within the discount period
7,326 X

Answers

Answer:

a. Particulars                       Amount

Sales revenue - Gross        $7,400

Less: Sales discount           $74       ($7,400*1%)

Net sales revenue               $7,474

b. Particulars                                                Amount

Sales revenue-Net                                        $7,474

Add: Freight paid on behalf of purchaser   $390  

Account receivable debited                        $7,864

c. Particulars                                    Amount

Total amount due                           $7,938

Less: Sales discount ($7,400*1%)   $74  

Net amount to be received            $7,864

You are considering the purchase of a machine out of your evaluation among four new ones. They have differing initial and ongoing costs and differing lives. Whichever machine is purchased will be replaced at the end of its useful life. Under such circumstances, you should choose the machine to purchase based on the ___________________.

Answers

Answer:

Lowest equivalent annual cost.

Explanation:

Considering the above scenario, it is more advantageous to choose the machine that has the lowest equivalent annual cost. As the newly acquired machine will be replaced at the end of its useful life, it is more advantageous for it to have a higher performance and lower annual cost among others, as the cost of depreciation of machinery and equipment must be considered as a fixed cost that will also directly impact a company's accounts.

Exercise 8-22 Evaluating efficient use of assets LO A1 Lok Co. reports net sales of $5,856,480 for Year 2 and $8,679,690 for Year 3. End-of-year balances for total assets are Year 1, $1,686,000; Year 2, $1,800,000; and Year 3, $1,982,000. (1) Compute Lok's total asset turnover for Year 2 and Year 3.

Answers

Answer:

Total asset turnover = Net sales / Average total assets

Year 2:

= 5,856,480 / (1,686,000 + 1,800,000) / 2

= 5,856,480 / 1,743,000

= 3.36

Year 3:

= 8,679,690 / (1,800,000 + 1,982,000) / 2

= 8,679,690 / 1,891,000

= 4.59

During year 1 meriwerher construction company started a construction job with a contract price 3,000,000 the job was completed in year 2

Answers

Answer Correct Answer = Option ‘C’ $ 350,000= Gross Profit for Year 2 Working for above answer Working Year 1 end Year 2 End A Contract Price $ 3,000,000

HOPE SO IT HELPS YOU

Wages of 8,000 are earned by workers but not paid as of december 31

Answers

Answer:

huh i dont understand that question no choosing letter

the ness company sells $5,000,000 of five-year, 10% bonds at the start of the year. the bonds have an effective yield of 9%. present value factors are below: The amount of bond premium amortization for Year 2 is:

Answers

Answer:

The amount of bond premium amortization for Year 2 is:

=  $35,421.26

Explanation:

a) Data and Calculations:

Face value of bonds = $5,000,000

Selling price of bonds = $5,194,482.56

Premium on bonds = $194,482.56

Coupon interest rate = 10%

Effective yield = 9%

Annual interest payment = $500,000 ($5,000,000 * 10%)

N (# of periods)  5

I/Y (Interest per year)  9

PMT (Periodic Payment)  500000

FV (Future Value)  5000000

Amortization Schedule

Period PV                            Annual PMT     Interest        Amortization

Year 1       $5,194,482.56     $500,000.00   $467,503.43      $32,496.57

Year 2      $5,161,985.99      $500,000.00 $464,578.74       $35,421.26

Year 3      $5,126,564.73     $500,000.00 $461,390.83       $38,609.17

Year 4    $5,087,955.56      $500,000.00 $457,916.00     $42,084.00

Year 5     $5,045,871.56      $500,000.00 $454,128.44    $45,871.56

End of Year 5 FV = $5,000,000

Results

PV = $5,194,482.56

Sum of all periodic payments $2,500,000.00

Total Interest $2,305,517.44

Tora Co. plans to produce 1,020 units in July. Each unit requires two hours of direct labor. The direct labor rate is $20 per hour. Prepare a direct labor budget for July.\

Answers

Answer: $40,800

Explanation:

Each unit requires 2 hours of direct labor.

1,020 units would therefore require:

= 1,020 * 2

= 2,040 hours of labor

The direct labor rate is $20 per hour. If there are 2,040 hours to be worked, the cost would therefore be:

= 20 * 2,040

= $40,800

Brownley Company has one service department and two operating (production) departments. Payroll Department costs are allocated to the two operating departments in proportion to the number of employees in each. Listed below are the operating data for the current period: Department Direct Expenses No.of Employees Payroll $ 26,000 Milling 80,000 52 Assembly 109,600 78 The total cost of operating the Milling Department for the current period is: rev: 12_17_2020_QC_CS-243789 Multiple Choice $90,400. $95,600. $10,400. $15,600. $80,000.

Answers

Answer:

$90,400

Explanation:

Calculation to determine Cost of operating mining department

Using this formula

Cost of operating mining department= Direct Cost + Payroll cost allocated

Let plug in the formula

Cost of operating mining department= 80,000 + (26,000/130)*52

(52+78=130)

Cost of operating mining department= 80,000 + $10,400

Cost of operating mining department= $90,400

Therefore Cost of operating mining department is $90,400

A machine cost $1,200,000, has annual depreciation of $200,000, and has accumulated depreciation of $950,000 on December 31, 2020. On April 1, 2021, when the machine has a fair value of $275,000, it is exchanged for a machine with a fair value of $1,350,000 and the proper amount of cash is paid. The exchange had commercial substance. The gain to be recorded on the exchange is

Answers

Answer: $1,350,000

Explanation:

If an exchange is said to have commercial substance, it means that the company will either record the asset received at its fair value and if this is not available, it will then record the value of the asset received at the fair value of the assets that were exchanged for it.

The fair value of the assets acquired are available in this instance so the machine will be recorded at its fair value of $1,350,000.

Tom and Jerry's has 2.4 million shares of common stock outstanding, 2.4 million shares of preferred stock outstanding, and 14.00 thousand bonds. If the common shares are selling for $13.40 per share, the preferred share are selling for $10.40 per share, and the bonds are selling for 99.96 percent of par, what would be the weight used for common stock in the computation of Tom and Jerry's WACC

Answers

Answer:

Tom and Jerry's

The weight used for common stock in the computation of Tom and Jerry's WACC is:

= 45.22%

Explanation:

a) Data and Calculations:

                                               Common   Preferred    Bonds

                                                  Stock         Stock

Outstanding number               2.4 m         2.4 m         14,000

Market price per share           $13.40      $10.40         $999.6

Total value                               $32.16 m  $24.96 m    $13,994,400

Total value of stock and bonds = $71,114,400

Weight of common stock = $32.16/$71.1144 * 100 = 45.22%

Yesterday, the dollar was trading in the foreign exchange market at 1.10 euros per dollar.​ Today, the dollar is trading at 1.20 euros per dollar. The dollar has​ ________ and a possible reason for the change is​ ________ in the expected future exchange rate.

Answers

Answer: appreciated; an increase.

Explanation:

Since there's an increase in the dollar rate at the foreign exchange market at 1.10 euros per dollar to 1.20 euros per dollar, this implies that the dollar has appreciated.

The appreciation of the dollar simply means that there's an increase in the value of the dollar when it's compared to.anitgee currency. Tge reason for the change is​ the increase in the expected future exchange rate.

Firms engaged in international trade deal with people they may have never seen, who live in different countries, who speak different languages, and who abide by different legal systems. These factors result in

Answers

Answer:

a lack of trust between the parties.

Explanation:

It is correct to say that these factors result in a lack of trust between the parties, due to social, political and cultural differences between different countries.

To reduce the lack of trust between the parties, it is necessary that companies operating in international trade comply with the legal, ethical and moral rules of the location where they are located, maintaining a multicultural relationship with their stakeholders, observing their preferences and desires and aligning its products and services to what local consumers are looking for in a company. Creating value for the consumer increases the company's confidence and positioning in an international market.

Sports Corp has 11.7 million shares of common stock outstanding, 6.7 million shares of preferred stock outstanding, and 2.7 million bonds. If the common shares are selling for $26.7 per share, the preferred share are selling for $14.2 per share, and the bonds are selling for 96.83 percent of par, what would be the weight used for common stock in the computation of Sports's WACC

Answers

Answer: 10.34%

Explanation:

First calculate the value of the company's total capital:

= Common stock + Preferred stock + Debt

= (11,700,000 * 26.70) + (6,700,000 * 14.20) + (2,700,000 * 96.83/100 * 1,000 par value)

= $3,021,940,000

The weight to be used for common stock is:

= Common stock value / Total capital value

= (11,700,000 * 26.70) / 3,021,940,000

= 312,390,000 / 3,021,940,000

= 10.34%

The FHA functions MOST like

Answers

Explanation:

As an agency within the Department of Housing and Urban Development, the FHA has an important role in providing affordable mortgages, especially during tough economic times. The FHA insures the loans and reimburses lenders if the borrowers default.

The Federal Housing Administration (FHA) is a U.S. agency offering mortgage insurance to FHA-approved lenders that meet specific qualifications.

Most FHA loans are for individuals who could not afford, and would not ordinarily qualify for, a traditional home mortgage loan.

An investor is holding a stock which has been volatile with returns significantly year-over-year. The initial investment was $1,000 in stock ABC, and it returned the following: Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Return 10% -15% 20% 22% -30% 40% What is the geometric returns of Stock ABC for six years

Answers

Answer:

the geometric returns of Stock ABC for six years is 5.02%

Explanation:

The computation of the  geometric returns of Stock ABC for six years is given below:

= [(1 + r1) × (1 + r2) × (1 + r3) × (1 + r4) × (1 + r5) × (1 + r6)]^1 ÷ 6 - 1

= [(1 + 0.10) × (1 - 0.15) × (1 + 0.20) × (1 + 0.22) × (1 - 0.30) × (1 + 0.40)]^(1 ÷ 6) - 1

= 0.0502 or 5.02%

Hence, the geometric returns of Stock ABC for six years is 5.02%

The above formula should be applied

The current economy is strong and many people are feeling confident about their future and ability to pay off debt. Because of this they are taking on more bank loans for things like new cars, renovating their homes, or buying new homes. Using the four step process with this type of market, what will banks most likely do with their loans

Answers

Answer:

They would increase the quantity supplied of loans and increase the interest rate

Explanation:

Monetary policy

This is simply refered to as alterations or changes in the interest rate to alter or influence the level of aggregate demand in an economy that is the demand side policy.

The central banks are known to be regulators of commercial banks and bankers to governments. The interest rate is the price of money. They manages interest rates to influence the money supply. They set the base rate of interest and the base rate influences all other interest rates that commercial banks use (i.e. savings rate, mortgage rate, car loan rate

Bugaboo Co. manufactures three types of cookies: Fluffs, Crinkles, and Snaps. The production process is relatively simple, and factory overhead costs are allocated to products using a single plantwide factory rate based on direct labor hours. Information for the month of May, Bugaboo's first month of operations, follows:
Budgeted Unit Volume Direct Labor Hours per unit
Fluffs 80,000 boxes 0.10
Crinkles 60,000 boxes 0.20
Snaps 20,000 boxes 0.50
Bugaboo has budgeted direct labor costs for May at $8.50 per hour. Budgeted direct materials costs for May are: Fluffs, $0.75/unit; Crinkles $0.40/unit; and Snaps $0.30/unit.
Bugaboo's budgeted overhead costs for May are:
Indirect Labor $280,000
Utilities $65,000
Supplies $45,000
Depreciation $30,000
Total $420,000
Assume that Bugaboo sells all the boxes it produces in May. Round your answers to two decimal places, if necessary.
a. Compute Bugaboo's plantwide factory overhead rate for May.
$_______per direct labor hour
b. Compute May's product cost for each type of cookie.
Cost per box Fluffs Crinkles Snaps
Total manufacturing cost $____ $____ $ ____

Answers

Answer:

Bugaboo Co.

a. Bugaboo's plantwide factory overhead rate for May.

$14 per direct labor hour

b. May's product cost for each type of cookie.

                                                 Fluffs      Crinkles       Snaps

Cost per box                            $3.00       $4.90         $11.55    

Total manufacturing cost   $240,000  $294,000   $231,000

Explanation:

a) Data and Calculations:

Budgeted Unit Volume      Direct Labor Hours   Total DLH

                                                      per unit

Fluffs            80,000 boxes             0.10                   8,000

Crinkles       60,000 boxes            0.20                  12,000

Snaps          20,000 boxes            0.50                  10,000

Total direct labor hours for the three products = 30,000

Budgeted overhead costs for May are:

Indirect Labor      $280,000

Utilities                  $65,000

Supplies                $45,000

Depreciation        $30,000

Total                   $420,000

Overhead rate per direct labor hour = $14 ($420,000/30,000)

                                              Fluffs           Crinkles          Snaps

Direct labor hours                 8,000            12,000         10,000

Direct materials per unit       $0.75             $0.40          $0.30

Direct materials                $60,000        $24,000        $6,000

Direct labor costs               68,000         102,000        85,000

Overhead allocated          112,000          168,000      140,000

Total production costs $240,000       $294,000   $231,000

Cost per box                       $3.00              $4.90         $11.55    

You own a portfolio that is invested 15 percent in Stock X, 35 percent in Stock Y, and 50 percent in Stock Z. The expected returns on these three stocks are 9 percent, 15 percent, and 12 percent, respectively. What is the expected return on the portfolio

Answers

Answer:

12.60%

Explanation:

The expected return on the portfolio is the sum of the weighted expected return of each stock in the portfolio

(0.15 x 9) + (0.35 x 15) + (0.5 x 12)

= 1.35 + 5.25 + 6

= 12.6%

Sarah inherited a large amount of cash after her grandparents passed away. She would rather overdraw her bank account and max out her credit cards, then deposit the cash into her bank account. This is an example of a consumer ________.

Answers

Answer:

a) failing to treat money as fungible

Explanation:

In the given situation, since sarah has been use the money in the form of credit cards rather using the larger cash amount which is in her hand. So this represents that she should be failed for using the 2 forms of money also the fungibility of money means the various forms of money could be used interchangable.

Therefore the option a is correct

Corris Co. accumulates the following data concerning a mixed cost, using miles as the activity level. Miles Driven Total Cost January 10,000 $17,000 February 8,000 13,500 March 9,000 14,400 April 7,000 12,500 Compute the variable and fixed cost elements using the high-low method. (Round variable cost to 2 decimal places, e.g. 15.25.)

Answers

Answer:

Results are below.

Explanation:

Giving the following information:

Miles Driven Total Cost

January 10,000 $17,000

February 8,000 13,500

March 9,000 14,400

April 7,000 12,500

To calculate the variable cost per unit and the total fixed cost, we need to use the following formula:

Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)

Variable cost per unit= (17,000 - 12,500) / (10,000 - 7,000)

Variable cost per unit= $1.5

Fixed costs= Highest activity cost - (Variable cost per unit * HAU)

Fixed costs= 17,000 - (1.5*10,000)

Fixed costs= $2,000

Fixed costs= LAC - (Variable cost per unit* LAU)

Fixed costs= 12,500 - (1.5*7,000)

Fixed costs= $2,000

The following balance sheet accounts (in millions of dol- lars) have been taken from the annual report for a U.S. bank. Arrange the accounts in balance sheet order and determine the value of total assets. Based on the balance sheet structure, would you classify this bank as a community bank, regional bank, or a money center bank?
Premises $1,078
Savings deposits 3,292
Cash 2,660
NOW accounts 12,816
Long-term debt 1,191
Other assets 1,633
Other time deposits 2,333
Net loans $29,981
Short-term borrowing 2,080
Other liabilities 778
Equity 3,272
Investment securities 6,092
Demand deposits 5,939
Certificates of deposit
(under $100,000) 9,853
Federal funds sold 110

Answers

The bank should be treated as a community bank.

The computation is as follows:

Total Assets = Premises+ Cash + Other assets + Net Loans + Investment securities + Federal funds sold

= $1,078 + $2,660 + $1,633 + $29,981 + $6,092 + $110

= $41,554  in Millions

Since the bank is a small regional bank that contains total assets of $41.5 billion so if this is the $41.5 million so it should be treated as the community bank.

Therefore we can conclude that the bank should be treated as a community bank.

Learn more about the asset here: brainly.com/question/13848560

Vaughn Manufacturing began the year with retained earnings of $654000. During the year, the company recorded revenues of $610000, expenses of $377000, and paid dividends of $143000. What was Vaughn's retained earnings at the end of the year

Answers

Answer:

$744,000

Explanation:

First and foremost, we need to determine the earnings after in the year which is the total earnings that would be used in computing the ending retained earnings

earnings after-tax=revenue-expenses

earnings after-tax= $610000-$377,000

earnings after-tax= $233,000

The closing retained earnings=beginning retained earnings+net income-dividends

The closing retained earnings=$654000+$233,000-$143,000

The closing retained earnings=$744,000

The Learning Journal is a space where you should reflect on what was learned during the week and how it applies to your daily life and will help you with your life (career) goals.

a. True
b. False

Answers

the answer is A. true

The following data come from the financial records of Campbell Corporation for Year 3: Sales $ 840,000 Interest expense 5,000 Income tax expense 25,500 Net income 25,500 Required How many times was interest earned in Year 3

Answers

Answer:

the times was interest earned in Year 3 is 11.2 times

Explanation:

The computation of the times interest earned ratio is given below:

The times interest earned ratio is

= (Net income+ Income tax expense+ Interest expense) ÷ Interest expense

= ($25,500 + $25,500 + $5,000) ÷ $5,000

= 11.2 times

Hence, the times was interest earned in Year 3 is 11.2 times

The same is to be relevant

Select the statement below that is true of long run aggregate supply curves.

a. There is no relationship between price level and RGDP.
b. Changes in price level affect output.
c. There is a variable quantity of RGDP.

Answers

Answer:

There is no relationship between price level and RGDp

Answer:

(A) There is no relationship between price level and RGDP

advantages of discounted payback period​

Answers

Answer:

The main advantage of the discounted payback period method is that it can give some clue about liquidity and uncertainly risk. Other things being equal, the shorter the payback period, the greater the liquidity of the project. Also, the longer the project, the greater the uncertainty risk of future cash flows.

Suppose savers either buy bonds or make deposits in savings accounts at banks. Initially, the interest income earned on bonds or deposits is taxed at a rate of 20%. Now suppose there is an increase in the tax rate on interest income, from 20% to 25%.
Shift the appropriate curve on the graph to reflect this change.
This change in the tax treatment of interest income from saving causes the equilibrium interest rate in the market for loanable funds to and the level of investment spending to ______.

Answers

Answer:

실례합니다? 당신은 이것을 의미합니까?

Explanation:

저축자들이 채권을 사거나 은행의 예금 계좌에 예금한다고 가정해 봅시다. 처음에는 채권이나 예금으로 얻은 이자 소득에 20%의 세율이 적용됩니다. 이제 이자 소득에 대한 세율이 20%에서 25%로 인상되었다고 가정합니다. 이 변경 사항을 반영하려면 그래프에서 적절한 곡선을 이동하십시오. 저축으로 인한 이자 소득에 대한 세금 처리의 이러한 변화는 대부자금 시장의 균형 이자율과 투자 지출 수준을 ______로 만듭니다. ?

Other Questions
He remembered the story very well because he (read) the book several times. For an atoms electrons, how many energy sublevels are present in the principal energy level n = 4?A. 4B. 9C. 10D. 16E. 32 Answer my question im being timed Use the following information to prepare a multistep income statement and a balance sheet for Sherman Equipment Co. for 2016. (Hint: Some of the items will not appear on either statement, and ending retained earnings must be calculated.) (Balance Sheet only: Items to be deducted must be indicated with a minus sign.)Salaries Expense $ 69,000 Operating Expenses $ 62,000 Common Stock 100,000 Cash Flow from Investing Activities 78,400 Notes Receivable 24,000 Prepaid Rent 12,500 (short term) Allowance for Doubtful Accounts 7,800 Land 40,000 Uncollectible Accounts Expense 8,100 Cash 48,100 Supplies 1,200 Inventory 98,300 Interest Revenue 5,400 Accounts Payable 46,000 Sales Revenue 320,000 Salaries Payable 12,000 Dividends 3,500 Cost of Goods Sold 148,000 Interest Receivable (short term) 1,500 Accounts Receivable 56,000 Beginning Retained Earnings 81,000 Do you think that interest and capacity play a great role to get success in a profession?Give your opinion. Como ------ tu de nina What is the answer? ErasEraEran Which description matches the function represented by the values in thistable?X 141256224489653584O A. exponential decayOB. linear growthO C. linear decayD. exponential growth organize the highlighted words and phrases into the ones shown into the screenshot this is really hard for me. i will give 60pnts Question 4 James Bennett also allocates wealth between youth and old age. He has no cash currently (in his youth), but will inherit $3000 in his old age. He can lend and borrow at the bank at 18% (that is, lending $1 in youth will give him $1.18 in old age). He has an investment opportunity that costs $12,000 now in his youth and has a payoff of $15,000 in his old age. This is the only investment opportunity available to him. What is the most he can consume in his youth what is |x-4| if x>4 X = [?]Dr.X As140BC What year was it when I was a freshman if I graduated this year(2021)? Fina Corp. had the following transactions during the quarter ended March 31, 2018: Payment of fire insurance premium for calendar year 2018 800,000 What amount should be included in Fina's income statement for the quarter ended March 31, 2018? The dogs as well as the cats ______ great noice What is 15.4624 divided by 0.32 Mt vt c nm ln trn theo phng thng ng. Ngi quan stthy vt i qua v tr c cao h hai ln v khong thi gian gia hai ln lt. Tm vn tc ban u v thi gian chuyn ng ca vt t lc nm n khi vtri v v tr ban u. 5. I heard the boy my namesriladioA. Call B.calling C. called D. calls Transitive spread refers to the effect of the original things transmitted to the associate things through the material, energy or information.a. Trueb. False Help please:) ((( no links ))) (.) (.) name a factor tht affects the value of electron affinity