Answer:
The actual results for 175,000 units with a new budget for 175,000 units.
Explanation:
To be more useful, actual results should be compared with budgeted amounts of actual production.
The actual results for 175,000 units should be compare with a new budget for 175,000 units
Buckson Framing's cost formula for its supplies cost is $1,350 per month plus $18 per frame. For the month of June, the company planned for activity of 716 frames, but the actual level of activity was 713 frames. The actual supplies cost for the month was $14,820. The supplies cost in the flexible budget for June would be closest to:
Answer:
c. $ 14,238
Explanation:
Computation of costs in the flexible budget
Planned activity 716 units
Budgeted cost per unit $ 18 per frame
Total planned variable cost - 716 units * $ 18 $ 12,888
Fixed monthly cost $ 1,350
Total supplies cost in flexible budget for June $ 14,238
The other information regarding the actual costs and actual production are not required for determining the budgted cost for supplies.
Hughey Co. as lessee records a capital lease of machinery on January 1, 2011. The seven annual lease payments of $350,000 are made at the end of each year. The present value of the lease payments at 10% is $1,704,000. Hughey uses the effective-interest method of amortization and sum-of-the-years'-digits depreciation (no residual value). Round to the nearest dollar.
a) Prepare an amortization table for 2 011 and 2012.
b) Prepare all of Hughey's journal entries for 2011.
Answer:
Both requirements are solved below
Explanation:
An amortization table can be made as follows
DATA
Lease term = 7years
annual lease payments = $350,0000
Present value of the leases payment = $1,704,000
Implicit interest rate = 10%
Requirement A Amortization table for 2011 and 2012
Date Annual payment Effective decreased Balance
interest liability $1,704,000
12/31/11 $350,000 $170,400 $179,600 $1524,400
12/31/12 $350,000 $152,440 $197,560 $1,326,840
Requirement B journal entries for 2011
January 1
Entry
DEBIT CREDIT
Leased machinery $1,704,000
Lease liability $1,704,000
December 31
Entry
DEBIT CREDIT
Interest expense $170,400
Lease liability $179,600
Cash $350,000
December 31
Entry
DEBIT CREDIT
Depreciation expense(w) $426,000
Accumulated depreciation $426,000
Working
Sum of the years = (7+6+5+4+3+2+1) = 28
Cost = $1,704,000
Residual value = $0
Estimated life = 7years
Depreciation expense = $1,704,000 x 7/28
Depreciation expense = $426,000
Sand Key Development Company estimates that it will generate an operating income of $7.25 million. Which financing option should Sand Key use?
Answer: debt financing option
Explanation:
Debt financing is a way by which an economic agent such as the individual, firm or the government gets enough money in order to meet a particular need.
Debt financing can be through loans from family and friends, personal loans, bank loans, credit cards etc. Since Sand Key Development Company estimates that it will generate an operating income of $7.25 million, the company can use debt financing.
. A particular parcel of real estate (land) is sold for $20,000,000 and was originally purchased for $10,000,000. On a taxable sale, explain a circumstance (type of investor, intent, entity, etc.) that would pay the following U.S. federal income tax results on the $10,000,000 gain (exclude the 3.8% net investment income tax and any state taxes in the calculation):
Question Completion:
Choices: a. No tax liability on the sale b. $2,000,000 of tax c. $2,960,000 of tax d. $2,100,000 of tax
Answer:
b. $2,000,000 of tax for individuals
Explanation:
Long-term capital gains tax is a tax on profits from the sale of an asset which an investor has held for more than a year. The approved long-term capital gains tax rates are 0%, 15% or 20% depending on your taxable income bracket and whether you are filing as a single or jointly as married. But, an important point to note is that long-term capital gains tax rates are generally lower than short-term capital gains tax rates, thus encouraging investors to hold assets for a longer time. Short-term capital gains tax rates are the rates applicable to the normal individual income tax brackets.
The federal government has the legal authority to prevent a company from adding products through acquisitions if the acquisition threatens to lessen competition.
A. True
B. False
Answer:
True
Explanation:
One way of determining if acquisitions would lessen competition is through the calculation of the HHI. if the HHI of the industry is more than 1500 before the acquisition and the HHI changes by more than 50 after the acquisition, the government would challenge the merger
If an economist wishes to determine whether there is evidence that average family incomes in a community exceeds $25,000:_______
a. either a one-tailed or two-tailed test could be used with equivalent results.
b. a one-tailed test should be utilized.
c. a two-tailed test should be utilized.
d. None of the above.
Answer: one tailed test should be utilized
Explanation:
From the question, we are informed that an economist wishes to determine whether there is evidence that average family incomes in a community exceeds $25,000.
A one tailed test should be utilized because the region of rejection will just have to be based on one side.
A large furniture and appliance rental business is considering sponsorship options. It has brought together vice-presidents from the various functional areas of the company to determine which sponsorships will most effectively reach the rental company's prospective customers. The rental company has established a:
a. cross-functional team
b. horizontally-organized team
c. vertically-organized team
d. problem-resolution team
e. project committee
Answer:
a. cross-functional team
Explanation:
In this case, the most appropriate is the use of a cross-functional team.
This team is formed by several professionals with knowledge, techniques, skills and resources to help the company achieve its goals and objectives.
The benefits of forming a cross-functional team is to aggregate the potential of each member in a common objective, which ensures greater flexibility of ideas, greater innovation, greater exchange of experiences, which guarantees greater team engagement, greater possibility of designing solutions and greater efficiency in organizational processes.
Sager Industries is considering an investment in equipment that will replace direct labor. The equipment has a cost of $1,200,000 with a $300,000 residual value and a 10-year life. The equipment will replace three employees who has an average total wages of $180,000 per year. In addition, the equipment will have operating and energy costs of $7,500 per year.
Determine the average rate of return on the equipment, giving effect to straight-line depreciation on the investment.
Answer:
Average rate of return = 11%
Explanation:
Depreciation = (Cost of equipment - Residual value) / Useful years
Depreciation = (1,200,000-300,000) / 10
Depreciation = 90,000
Increase in net annual income = 180,000 - 90,000 - 7,500
Increase in net annual income = 82,500
Average investment = (1,200,000 + 300,000) / 2 = 750,000
Average rate of return = Increase in net annual income / Average investment
Average rate of return = 82,500/750,000
Average rate of return = 0.11
Average rate of return = 11%
The production sector would NOT include Group of answer choices a Florida orange grove a California wine grower a meat packing plant
Answer: Meat packing plant
Explanation:
The options to the question are:
A. California wine grower
B. meat packing plant
C. horticultural nursery
D. Florida orange grove
E. none of the above
Of all the options given in the question, the correct answer is meat packing plant. It should be noted that the meat packaging plant will not be part of the production sector due to the fact that no productive activities are taking place, it only involves in services.
Suppose that on August 14, 2019, an antique woven rug handmade in Canada is priced at CAD 1,100. The approximate U.S. dollar price of the rug would be
Answer:
USD 825.95Explanation:
Step one:
To tackle this problem we need data from historical chart.
From historical chart, on August 14, 2019, 1 USD is equivalent to CAD 1.3318
Step two:
From the historical data we need to perform conversion on the data to get the USD equivalent of the CAD given in the problem
Hence
if 1 USD = CAD 1.3318 then
x USD = CAD 1,100
by cross multiplying we have
x USD= 1,100/ 1.3318
x USD= 825.95
Hence as at August 14, 2019 CAD 1,100 is USD 825.95
Discounted payback period. Given the following two projects and their cash flows, LOADING..., calculate the discounted payback period with a discount rate of %, %, and %. What do you notice about the payback period as the discount rate rises? Explain this relationship. With a discount rate of %, the cash outflow for project A is:
Answer:
the numbers are missing, so I looked for a similar question:
Cash Flow A B
Cost $10,000 $105,000
Cash flow year 1 $3,571 $21,000
Cash flow year 2 $3,571 $10,500
Cash flow year 3 $3,571 $42,000
Cash flow year 4 $3,571 $31,500
Cash flow year 5 $3,571 $5,250
Cash flow year 6 $3,571 $0
With a discount rate of 5%, 10% & 15%
Discounted cash flows for project A:
5% 10% 15%
Cost $10,000
Cash flow year 1 $3,571 $3,401 $3,246 $3,105
Cash flow year 2 $3,571 $3,239 $2,951 $2,700
Cash flow year 3 $3,571 $3,085 $2,683 $2,348
Cash flow year 4 $3,571 $2,938 $2,439 $2,042
Cash flow year 5 $3,571 $2,798 $2,217 $1,775
Cash flow year 6 $3,571 $2,665 $2,016 $1,544
discounted payback period:
5% = 3.09 years
10% = 3.46 years
15% = 3.9 years
The higher the discount rate, the longer the discounted payback period.
Discounted cash flows for project B:
5% 10% 15%
Cost $105,000
Cash flow year 1 $21,000 $20,000 $19,091 $18,261
Cash flow year 2 $10,500 $9,524 $8,678 $7,940
Cash flow year 3 $42,000 $36,281 $31,555 $27,616
Cash flow year 4 $31,500 $25,915 $21,515 $18,010
Cash flow year 5 $5,250 $4,114 $3,260 $2,610
discounted payback period:
5% = more than 5 years, the project's NPV is negative -$9,166.37
10% = more than 5 years, the project's NPV is negative -$20,901.42
15% = more than 5 years, the project's NPV is negative -$30,563.54
Which of the following statements regarding fiscal policy are true according to the macroeconomic consensus in the United States?
a. Congress, not the Federal Reserve, should be in charge of monetary policy.
b. Expansionary monetary policies should be used to keep unemployment below its natural rate.
c. Monetary policy should focus on price stability.
Answer: Monetary policy should focus on price stability.
Explanation:
The statements regarding fiscal policy that is true according to the macroeconomic consensus in the United States is that monetary policy should focus on price stability.
The statements that Congress, not the Federal Reserve, should be in charge of monetary policy and that Expansionary monetary policies should be used to keep unemployment below its natural rate are both wrong.
In the liquidation of a partnership, any gain or loss on the realization of non-cash assets should be allocated:_____.
a. first to creditors and the remainder to partners.
b. to the partners on the basis of their capital balances.
c. only after all creditors have been paid.
d. to the partners on the basis of their income-sharing ratio.
Answer:
D. To the partners on the basis of their income-sharing ratio.
Explanation:
Partnership liquidation can be easily seen to come into existence indefinitely through periodic changes within the ownership, they are seen to occur by circumstances which are totally uncommon occurrence.
The form of the dissolution is irrelevant, whether by absenting by personal decision of individual member or wholesale departure and formal liquidation. The end result will be the same. The primary dream of these harmonious and synchronical growth of the firm will be seen to come to an end.
This is why it is best shared to the partners on the basis of their income sharing ratio.
Orbit Services, Inc. pays $ 760 ,000 to acquire 30% (200,000 shares) of the voting stock of State Investments, Inc. on January 5, 2019. State Investments, Inc. declares and pays a cash dividend of $ 1.40 per share on June 14, 2019. What is the correct journal entry for the transaction on June 14, 2019?
Answer:
since Orbit's investment represents a significant influence (more than 20%) on State, we have to use the equity method for accounting for investments in other companies.
the journal entry to record the initial investment:
January 5, 2019, investment in State Investments, Inc.
Dr Investment in State Investments, Inc., 760,000
Cr Cash 760,000
When we use the equity method, cash dividends decrease the carrying value of our investments:
June 14, 2019, cash dividend received from State Investments, Inc.
Dr Cash 280,000
Cr Investment in State Investments, Inc., 280,000
Sonny's BBQ Company recently issued $85 par value preferred stock that pays an annual dividend of $9. Analysts estimate that the stock has a beta of 1.01. The current T-bill rate is 2.4%. The S&P 500's expected return is 12.1%. Assuming that CAPM holds, what is the intrinsic value of this preferred stock?
Answer:
Intrinsic value=$73.77
Explanation:
The Dividend Valuation Model(DVM) is a technique used to value the worth of an asset.
According to this model, the value of an asset is the sum of the present values of the future cash flows would that arise from the asset discounted at the required rate of return.
Price = D/Kp
D- Dividend payable
Kp- cost of preferred stock
So will need to work out the cost of equity using CAPM
The capital asset pricing model (CAPM): relates the price of a share to the market risk or systematic risk. The systematic risk is that which affects all the all the economic agents, e.g inflation, interest rate e.t.c
This model is considered superior to DVM. Hence, we will use the CAPM
Using the CAPM , the expected return on a asset is given as follows:
E(r)= Rf +β(Rm-Rf)
E(r) =? , Rf- 2.4%, Rm- 12.1% β- 1.01
E(r) = 2.4% + 1.23×(12.1- 2.4)% = 12.20 %
Cost of preferred stock= 12.20 %
Using the dividend valuation model
Intrinsic value = 9/0.1220=73.77
Intrinsic value=$73.77
Windhoek Mines, Ltd., of Namibia, is contemplating the purchase of equipment to exploit a mineral deposit on land to which the company has mineral rights. An engineering and cost analysis has been made, and it is expected that the following cash flows would be associated with opening and operating a mine in the area:
Cost of new equipment and timbers $ 380,000
Working capital required $ 120,000
Annual net cash receipts $ 135,000
Cost to construct new roads in year three $ 44,000
Salvage value of equipment in four years $ 69,000
Receipts from sales of ore, less out-of-pocket costs for salaries, utilities, insurance, and so forth.
The mineral deposit would be exhausted after four years of mining. At that point, the working capital would be released for reinvestment elsewhere. The company’s required rate of return is 18%.
Required:
Determine the net present value of the proposed mining project. (Any cash outflows should be indicated by a minus sign.
Answer:
The net present value of the proposed mining project is - $163,621.41.
Explanation:
The Summary of Cash flows is as follows :
Year 0 : - ($ 380,000 + $ 120,000) = - $500,000
Year 1 : $ 135,000
Year 2: $ 135,000
Year 3: $ 135,000 - $ 44,000 = $91,000
Year 4: $ 135,000 + $ 69,000 + $ 120,000 = $324,000
Determine the Net Present Value of the mining project as follows :
Using a Financial Calculator, entries will be as follows
- $500,000 CFj
$ 135,000 CFj
$ 135,000 CFj
$91,000 CFj
$ 135,000 CFj
18 % I/YR
SHIFT NPV - $163,621.41
An assembly line with 17 tasks is to be balanced. The longest task is 2.4 minutes, and the total time for all tasks is 18 minutes. The line will operate for 450 minutes per day.Required:a. What are the minimum and maximum cycle times? b. What range of daily output is theoretically possible for the line? c. What is the minimum number of workstations needed if the maximum output rate is to be sought?d. What cycle time will provide an output rate of 125 units per day?
Answer
a)Minumum cycle time = 2.4 Minutes And Maximum cycle time = 18 Minutes
b)=187.5 units per day and 25 units per day
c) 8 workstation
d)2.6min/cycle
Explanation:
Given:
output rate = 125 units per day
Operating time= 450 minutes per day
What are the minimum and maximum cycle times?
Minimum Cycle time = duration of the longest task
Therefore,Minimum cycle time = 2.4 minutes
Maximum cycle time = addition of the task
Maximum Cycle Time = 18 minutes
Therefore, Minumum cycle time = 2.4 Minutes And Maximum cycle time = 18 Minutes
B)B)What range of daily output is theoretically possible for the line?
Range of daily output = Operating time / minimum Cycle time
At 2.4 minutes Cycletime
= 450/2.4
=187.5 units per day
At Cycle time 18 Minutes
= 450/18
Cycle time 18 minutes = 25 units per day
C)What is the minimum number of workstations needed if the maximum output rate is to be sought?
number of workstation=(D× summation of all task)/Operating time
number of workstation=(187.5*18)/450
= 7.5= 8 workstation
D)What cycle time will provide an output rate of 125 units per day?
cycle time= Operating time/output rate
=450/125
= 2.6min/cycle
Company X's current assets increased by $40 million from 2007 to 2008, while the company's current liabilities increased by $25 million over the same period. The cash impact of the change in working capital was:
a. A decrease of $15 million
b. An increase of $15 million
c. An increase of $40 million
d. An increase of $25 million
Answer:
b. An increase of $15 million
Explanation:
The computation of the cash impact of the change in working capital is shown below:
As we know that
Working capital = Current assets - current liabilities
So, the change in working capital is
= Increase in current assets - increased in current liabilities
= $40 million - $25 million
= $15 million
Hence, the b option is correct
Lake Incorporated purchased all of the outstanding stock of Huron Company, paying $1,000,000 cash. Lake assumed all of the liabilities. Book values and fair values of acquired assets and liabilities were: Book Value Fair Value Current assets (net) $ 190,000 $ 125,000 Property, plant, equip. (net) 650,000 765,000 Liabilities 255,000 255,000 Lake would record goodwill of
Answer:
Lake would record goodwill of $365,000
Explanation:
Fair value of net assets = Fair value of current asset + Fair value of property, plant and equipment
Fair value of net assets = $125,000 + $765,000
Fair value of net assets = $890,000
Fair market value = Fair value of net assets - Liabilities assumed
Fair market value = $890,000 - 255,000
Fair market value = $635,000
Goodwill = Consideration - Fair market value
= $1,000,000 - $635,000
= $365,000
Hence, the amount of goodwill is $365,000.
If the current interest rate is 5% and your semi-annual coupon paying bond has a duration of 5.33 years, how much will the price of the bond change if the interest rate increases by 1 basis point?
Answer:
Percentage change in price = -5.33 * 0.00005
Explanation:
Percentage change in price = - modified duration * (Change in yield in BP/100)
Percentage change in price = -5.33 * ((0.01/2)/100)
Percentage change in price = -5.33 * (0.005/100)
Percentage change in price = -5.33 * 0.00005
In capital rationing, alternative proposals that survive initial screening by cash payback and average rate of return methods are further analyzed using:________
Answer:
Net present value and internal rate of return
Explanation:
when making a decision between alternative projects, initial analysis is done with the cash payback and average rate of return.
Cash payback period calculates the amount of time it takes to recover the amount invested in a project from its cumulative cash flows
Average rate of return = Average net income / average book value.
this is followed by the Net present value analysis and Internal rate of return determination.
Net present value is the present value of after tax cash flows from an investment less the amount invested.
Internal rate of return is the discount rate that equates the after tax cash flows from an investment to the amount invested
project with the highest positive project NPV should be chosen.
Also, a project with an IRR greater than the discount rate should be chosen. when choosing between alternative projects, the project with the highest IRR should be chosen if the IRR is greater than the discount rate.
Use goal seek to answer this question. All else equals, to have a net income of 20,000, the COGS margin percentage must be ______, and the gross profit must be ______. Review Later
Answer:
Use goal seek to answer this question. All else equals, to have a net income of 20,000, the COGS margin percentage must be 40%, and the gross profit must be $17,250.
Explanation:
The income statement is missing, so I looked it up and the information given was:
Revenue 100,000 COGS 40,000 Gross Profit 60,000 Salaries Marketing Rent Earnings Before Tax 23,000Income Tax 25% Net Income ?Since COGS are$40,000 and total sales are $100,000, the COGS margin percentage = 40,000 / 100,000 = 40%
Since earnings before taxes are $23,000 and taxes are 25%, then net income = $23,000 x (1 - 25%) = $23,000 x 75% = $17,250
Yellowstone Corporation has just announced the repurchase of $125,000 of its stock. The company has 39,000 shares outstanding and earnings per share of $3.29. The company stock is currently selling for $76.09 per share. What is the price–earnings ratio after the repurchase?
Answer:
The price–earnings ratio after the repurchase is 22.18
Explanation:
First calculate Numbers of new shares
New Shares = Old Shares - ( Repurchased Shares / Price per share )
New Shares = 39,000 - ( $125,000 / $76.09 )
New Shares = 39,000 - 1,642.79
New Shares = 37,357.21 shares
New compute the old earning
Old Earning = EPS x Numbers of old shares = $3.29 x 39,000 = $128,310
New compute revised Earning per share
Revised EPS = Earning / New shares = $128,310 / 37,357.21 shares = $3.43
Now we need to calculate the Price earning ratio
P/E Ratio = Price per share / Revised earning per share = $76.09 / $3.43 = 22.18 times
You must decide between $25,000 in cash today or $30,000 in cash to be received two years from now. If you can earn 8 percent interest on your investments, which is the better deal?
Answer:
The deal to receive $30000 is better.
Explanation:
To find the better deal we need to calculate the present value of $30000 and then compare it with the amount $25000. If the amount is greater than the $25000, then the amount should be received after the 2 years.
The given time period (n )= 2
Interest rate (r ) = 8%
The amount received after 2 years = $30000
[tex]\text{Present value of money} = \frac{Future \ value}{(1 + r)^n } \\= \frac{30000}{(1+0.08)^2} \\= $25720.16[/tex]
Since the amount is more than $25000 so the deal to receive the money after 2 years will be better.
Expected return and standard deviation. Use the following information to answer the questions: LOADING.... a. What is the expected return of each asset? b. What is the variance of each asset? c. What is the standard deviation of each asset? Hint: Make sure to round all intermediate calculations to at least seven (7) decimal places. The input instructions, phrases in parenthesis after each answer box, only apply for the answers you will type. a. What is the expected return of asset A?
Answer and Explanation:
a. The computation of expected return of each assets is shown below:-
Expected Return on Asset A in state is
= 0.39 × 0.02 + 0.45 × 0.02 + 0.16 × 0.02
= 0.02
Expected Return on Asset B in state is
= 0.39 × 0.25 + 0.45 × 0.06 + 0.16 × -0.04
= 0.1181
Expected Return on Asset C in state is
= 0.39 × 0.35 + 0.45 × 0.19 + 0.16 × -0.22
= 0.1868
b. The computation of variance of each asset is shown below:-
Variance of Assets A is
= 0.39 × (0.02 - 0.020)^2 + 0.45 × (0.02 - 0.020)^2 + 0.16 × (0.02 - 0.020)^2
= 0
Variance of Assets B is
= 0.39 × (0.25 - 0.1181)^2 + 0.45 × (0.06 - 0.1181)^2 + 0.16 × (-0.04 - 0.1181)^2
= 0.0123
Variance of Assets C is
= 0.39 × (0.35 - 0.1868)^2 + 0.45 × (0.19 - 0.1868)^2 + 0.16 × (-0.22 - 0.1868)^2
= 0.0369
c. The computation of standard deviation of each asset is shown below:-
Standard Deviation of A is
= (0.39 × (0.02 - 0.020)^2 + 0.45 × (0.02 - 0.020)^2 + 0.16 × (0.02 - 0.020)^2)^0.5
= 0
Standard Deviation of B is
= (0.39 × (0.25 - 0.1181)^2 + 0.45 × (0.06 - 0.1181)^2 + 0.16 × (-0.04 - 0.1181)^2)^0.5
= 0.1109
Standard Deviation of C is
= (0.39 × (0.35 - 0.1868)^2 + 0.45 × (0.19 - 0.1868)^2 + 0.16 × (-0.22 - 0.1868)^2)^0.5
= 0.1920
A firm has a debt-to-equity of 0.69 and a market-to-book ratio of 3.0. What is the ratio of the book value of debt to the market value of equity?
Answer:
0.23
Explanation:
Debt to Equity Ratio = Total debt/ Total common equity
Market to book Ratio = Market price per share / Book value per share
Book debt to Market equity Ratio = Debt to Equity Ratio / Market to book Ratio
Book debt to Market equity Ratio = 0.69 / 3
Book debt to Market equity Ratio = 0.23
Therefore, the ratio is 0.23
Food Shoppe Galore had the following information: Total market value of a company’s stock: $650 million Total market value of the company’s debt: $150 million What is the weighted average of the company’s debt?
Answer:
18.75%
Explanation:
Food Shoppe galore has a total market value stock of $650 million
The total market value of the company's debt is $150 million
The first step is to calculate the total market value of the company's capital
= $150,000,000 + $650,000,000
= $800,000,000
Therefore, the weighted average of the company's debt can be calculated as follows
= $150,000,000/$800,000,000
= 0.1875×100
= 18.75%
Hence the weighted average of the company's debt is 18.75%
A customer wishes to purchase $100,000 face amount of municipal bonds that the broker-dealer does not have in inventory. Under MSRB rules, the firm should:
Answer:
contact enough dealers so that a reasonable market quote is obtained . when a municipal dealer acts in an agency capacity, the price charged must be representative of the market for that type of security. There is no requirement to obtain a pre-set number of quotes (as a contrast, FINRA requires that a minimum of 3 quotes be obtained for non-NASDAQ OTC issues, meaning OTCBB or Pink Sheet issues), nor is there a requirement to direct the customer to a dealer that physically has those bonds. The dealer would not sell short the bonds to the customer, since short covering is very difficult in the thinly traded municipal market.
Empirical evidence from 1960 to 2010 shows that convergence in economic growth is occurring in which of the following cases?
a. All low-income countries are catching up to all high-income countries.
b. Low-income industrial countries are catching up to high-income developing countries.
c. Low-income developing countries are catching up to high-income industrial countries.
d. Low-income industrial countries are catching up to high-income industrial countries.
Answer:
Correct Answer:
c. Low-income developing countries are catching up to high-income industrial countries.
Explanation:
The evidence which shows that low income developing countries are catching up to high-income industrial countries could be found in the series of developmental strides made by some countries like Rwanda, Kenya, Tanzania, Indonesia, Vietnam etc over the years. Most of their achievements is at par with most European countries in different sectors such as educational, and social sectors.
You want to make a one-time deposit today that will increase in value to $100 at the end of this year. Which rate of interest will allow you to deposit the least amount today to reach this goal
Answer:
The rate of interest is 11.111%
The Deposit should be $90 today.
The future value at the end of this year will be $100.
Explanation:
Future value of $100
Present value of $100 at 11.111% = $100/11.111 = $90
The future value of a deposit today is the value after a period of one year or so periods. The rate of interest produces the discount factor that can calculate the present value of $100. To make a one-time deposit of $90 today will increase in value to $100 using an interest rate of 11.111%.
