Budgetary control is a method of management accounting, that helps to control the operations and budgets of an organization, in order to ensure that the organization's financial goals are met. The process of budgetary control involves setting budgets and targets for various departments and functions within an organization, then monitoring the actual performance against those budgets and targets, and taking corrective action as necessary to ensure that the organization stays on track.Budgetary control has several advantages, including the following:1. It helps to ensure that the organization is operating within its financial means, by providing a framework for managing expenses and revenues.2. It provides a way to measure the performance of individual departments and functions within an organization, which can help to identify areas for improvement.3. It helps to identify potential areas of risk or opportunity, which can be addressed in a timely manner.4. It provides a basis for decision-making, by providing information about the financial impact of various options or courses of action.5. It helps to promote accountability within an organization, by establishing clear targets and responsibilities for each department and function.
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Consider the economies of Abbitibi and Prycia, which are identical except that the multiplier in Abbitibi is larger than that in Prycia.
This means that Abbitibi's GDP ismore sensitive than Prycia's GDP to fluctuations in the components of total spending.
Features of the economy that reduce its sensitivity to shocks are called automatic stabilizers.
Suppose again that the economies of Abbitibi and Prycia are identical except that Abbitibi has instituted a system of unemployment insurance, whereas Prycia hasn't.
Prycia's economy is sensitive to fluctuations in GDP than Abbitibi's economy. This is because the system of unemployment insurance has Abbitibi's multiplier.
The given statement means that Abbitibi's GDP is more sensitive than Prycia's GDP to fluctuations in the components of total spending.
This happens when the economy of a country has features that reduce its sensitivity to shocks are called automatic stabilizers. Now, suppose the economies of Abbitibi and Prycia are identical, except that Abbitibi has instituted a system of unemployment insurance while Prycia hasn't.
In this case, the economy of Prycia would be more sensitive to fluctuations in GDP than Abbitibi's economy. This is because the system of unemployment insurance has increased Abbitibi's multiplier.Automatic stabilizers are features of the economy that reduce its sensitivity to shocks. These features include programs that are automatically activated when the economy falls below a certain level, such as unemployment insurance.
These programs help to stabilize the economy by providing income support to those who have lost their jobs and reduce the severity of recessions by providing support to those who would otherwise face poverty and hardship. Therefore, the economy of Prycia would be more sensitive to fluctuations in GDP than Abbitibi's economy because it doesn't have automatic stabilizers like the system of unemployment insurance that Abbitibi has.
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Solve for the amount of discount and amount due.
Invoice amt: $1160
Invoice date: May 20
Terms: 5/10, n/60
Shipping/Insurance: $32.52
Date paid: May 28
The amount of the discount is $58, and the amount due is $1134.52.
In this scenario, the invoice amount is $1160, and the terms are stated as 5/10, n/60. The terms indicate that the buyer is entitled to a 5% discount if payment is made within 10 days of the invoice date, and the full amount is due within 60 days.
First, let's calculate the amount of discount:
Discount = Invoice amount * Discount rate
= $1160 * 5%
= $58
Next, we need to determine whether the payment was made within the discount period or after:
Since the invoice date is May 20 and the date paid is May 28, it is within 10 days of the invoice date. Therefore, the buyer is eligible for the discount.
Now, we can calculate the amount due:
Amount due = Invoice amount - Discount + Shipping/Insurance
= $1160 - $58 + $32.52
= $1134.52
To calculate the amount of the discount, we multiply the invoice amount ($1160) by the discount rate (5%). This results in a discount of $58.
Next, we need to determine whether the payment was made within the discount period. The invoice date is May 20, and the payment date is May 28, which is within 10 days of the invoice date. Therefore, the buyer qualifies for the discount.
To calculate the amount due, we subtract the discount ($58) from the invoice amount ($1160) and add the shipping/insurance cost ($32.52). This gives us the amount due of $1134.52.
In summary, the buyer is entitled to a $58 discount if payment is made within 10 days. Since the payment was made within the discount period, the amount due is $1134.52, which includes the discounted amount and the shipping/insurance cost.
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the main difference between a manufacturer's and a merchandiser's balance sheet is in the
The main difference between a manufacturer's and a merchandiser's balance sheet is in the inventory section.
For a manufacturer, the inventory section of the balance sheet includes three types of inventories: raw materials, work-in-progress (WIP), and finished goods. Raw materials represent the materials and components that are yet to be used in the production process. Work-in-progress includes partially completed products that are currently being worked on in the manufacturing process. Finished goods refer to the completed products ready for sale.
On the other hand, for a merchandiser, the inventory section of the balance sheet includes only one type of inventory: merchandise inventory. Merchandise inventory represents the goods that the merchandiser purchases for resale. It includes the products that are bought from suppliers and held for sale to customers.
Therefore, the key distinction between a manufacturer's and a merchandiser's balance sheet lies in the inventory section, reflecting the different types of inventories associated with their respective business operations.
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A car valued at $30,000 has $600 of depreciation to be adjusted as of January 31st.
Which entry should be made?
Debit Accumulated Depreciation, Credit Car, both for $600
Credit Accumulated Depreciation, Debit Depreciation Expense, both for $600
Debit Accumulated Depreciation, Credit Depreciation Expense, both for $600
Debit Car, Credit Depreciation, both for $600
Credit Accumulated depreciation, Debit Depreciation expense both for $600 entry will be made. Option B is correct.
Depreciation amounts to $600
Depreciation expense account----- Debit $600,
To Accumulated Depreciation account.. Credit $600
The total amount an asset has depreciated up to a single point is its accumulated depreciation. The beginning accumulated depreciation balance is increased by the depreciation expense recorded in that period.
Gathered deterioration is the running absolute of devaluation that has been discounted against the worth of a resource. On the balance sheet, fixed assets are shown as a debit, while accumulated depreciation is shown as a credit—offsetting the asset.
Because it combines the amount of depreciation expense applied to a fixed asset, accumulated depreciation has a credit balance. The remaining book value of the fixed assets can be seen when this account and the fixed assets line item on the balance sheet are added together.
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Complete question as follows:
A car valued at $30,000 has $600 of depreciation to be adjusted as of January 31st.
Which entry should be made?
A. Debit Accumulated Depreciation, Credit Car, both for $600
B. Credit Accumulated Depreciation, Debit Depreciation Expense, both for $600
C. Debit Accumulated Depreciation, Credit Depreciation Expense, both for $600
D. Debit Car, Credit Depreciation, both for $600
Cookie Company
You and your roommate are preparing to launch Kristen's Cookie Company in your on-campus apartment. The company will provide fresh cookies to hungry students late at night. You need to evaluate the preliminary design for the company's production process in order to make key policy decisions, including what prices to charge, what equipment to order and how many orders to accept, and to determine
whether the business can be profitable.
Business Concept
Your idea is to bake fresh cookies to order, using any combination of ingredients that the buyer wants. The cookies will be ready for pickup at your apartment within an hour.
Several factors will set you apart from competing products such as store-bought cookies. First, your cookies will be completely fresh. You will not back any cookies before receiving the order; therefore, the buyer will be getting cookies that are literally hot out of the oven.
Second, like many Boston-based area ice-cream shops, you will have a variety of ingredients available to add tot he basic dough, including chocolate chips, M&M's, chopped Heath bars, coconut, walnuts, and raisins.Buyers will telephone in their orders and specify which of these ingredients they want in their cookies. You will guarantee completely fresh cookies. In short, you will have the freshest, most exotic cookies anywhere, available right on campus.
The Production Process
Baking cookies is simple: place all the ingredients in a mixing bowl and mix them; spoon the cookie dough onto a tray; put the cookies into the oven; bake them; take the tray of cookies out of the oven; let the cookies cool; and finally, take the cookies off the tray and acrefully pack them in a box. You and your roommate already own all the necessary capital equipment: a high capacity professional-grade electric mixer, cookie trays, and spoons. Your apartment has a small oven that will hold one tray at a time. Your landlord pays for all the electricity. The variable costs, therefore, are merely teh cost of the ingredients (estimated to be $0.60/dozen), the cost of the box in which the cookies are packed ($0.10 per box; each box holds a dozen cookies), and your time (what value do you place on your time?).
A detailed examination of the production process, which specifies how long each of the steps will take, follows. The first step is to take an order, which will be extremely fast and 100% accurate, since your roommate has devised a method using the campus e-mail system to accept orders and to inform customers when their orders will be ready for pickup. Because this runs automatically on your personal computer, it does not take any of your or your roommate's time. Therefore, this step will be ignored in further analysis.
You and your roommate have timed the necessary physical operations. The first physical production step is to wash out the electric mixer's bowl and beaters from the previous batch, add the ingredients to the bowl, and turn on the mixer to mix the ingredients. The electric mixer can hold and mix ingredients for up to three dozen cookies. You then spoon the cookies, one dozen at a time, onto a cookie tray. These activities take 6 minutes for the washing and mixing steps, regardless of how many cookies are being made in the batch. That is, to mix enough dough and ingredients for three dozen cookies takes the same 6 minutes as for one dozen cookies. However, spooning the cookies onto the tray takes 2 minutes per tray.
The next step, performed by your roommate, is to put the cookies in the oven and set the thermostat and timer, which in total takes about 1 minute. The cookies bake for the next 9 minutes. So total baking time is 10 minutes, during the first minute of which your roommate is busy setting the oven. Because the oven only holds one tray, a second dozen takes an additional 10 minutes to bake.
Your roommate also performs the last steps of the process by first removing the cookies from the oven and putting them aside to cool for 5 minutes, then carefully packing them in a box and accepting payment. Removing the cookies from the oven takes a negligible amount of time, but must be done promptly. It takes 2 minutes to pack each dozen and about 1
minute to accept payment for the order.
This is the process you plan to use to produce cookies by the dozen at Kristen's Cookie Company. As experienced bakers know, a few simplifications were made in describing the actual cookie production process. For example, the first batch of cookies for the night requires preheating the oven. However, such complexities will be put aside for now.
1. Begin your analysis by developing a process flow diagram of the cookie-making process.
2. How many one dozen orders can you fill in a night assuming you are open four hours each night? (The answer is 26 dozen. Please explain how you arrived at approximately this number.) What is the bottleneck?
3. In planning for the ongoing capacity of KCC, should you use a capacity cushion?
1. The process flow diagram illustrates the steps involved in Kristen's Cookie Company's cookie-making process, from order placement to the final delivery. 2. Approximately 26 dozen one dozen orders can be filled in a night, assuming the business is open for 4 hours. 3. It is recommended to incorporate a capacity cushion in the ongoing capacity planning for KCC.
1. Process Flow Diagram:
The process flow diagram for Kristen's Cookie Company's cookie-making process can be represented as follows:
Order -> Wash and mix ingredients -> Spoon cookies onto tray -> Oven baking -> Cool cookies -> Pack cookies -> Accept payment
2.Calculation of One Dozen Orders:
To calculate the number of one dozen orders that can be filled in a night, we need to consider the time required for each step of the process and the available operating hours.
Washing and mixing ingredients: 6 minutes
Spooning cookies onto tray: 2 minutes per tray (each tray holds one dozen cookies)
Oven baking: 10 minutes per tray (each tray holds one dozen cookies)
Cooling cookies: 5 minutes
Packing cookies: 2 minutes per dozen
Accepting payment: 1 minute per dozen
Operating hours: 4 hours
Let's calculate the time required to fulfill one dozen orders:
Washing and mixing ingredients: 6 minutes
Spooning cookies onto tray: 2 minutes
Oven baking: 10 minutes
Cooling cookies: 5 minutes
Packing cookies: 2 minutes
Accepting payment: 1 minute
Total time required per dozen: 6 + 2 + 10 + 5 + 2 + 1 = 26 minutes
Now, we need to calculate how many batches of one dozen cookies can be made in 4 hours:
Number of minutes in 4 hours = 4 hours * 60 minutes/hour = 240 minutes
Number of one dozen orders = 240 minutes / 26 minutes per dozen ≈ 9.23 dozen
Therefore, approximately 9 dozen (or 26 dozen) orders can be filled in a night, assuming the business is open for 4 hours each night.
Bottleneck: The bottleneck in the process is the oven baking step, which takes 10 minutes per tray. As the oven can only hold one tray at a time, this step limits the overall production capacity.
3. Capacity Cushion
In planning for the ongoing capacity of Kristen's Cookie Company (KCC), it is advisable to incorporate a capacity cushion. A capacity cushion is an additional capacity beyond the expected demand that allows for flexibility, accommodates fluctuations in demand, and provides a buffer for unexpected events.
Factors to consider when determining the capacity cushion for KCC:
Variability in demand: If the demand for cookies fluctuates significantly, a larger capacity cushion may be needed to meet peak demand periods.
Flexibility and responsiveness: A smaller capacity cushion allows for quicker response to changing customer orders and reduces the risk of inventory spoilage or obsolescence.
Cost considerations: A larger capacity cushion incurs higher fixed costs due to the need for additional resources, such as equipment and labor.
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which of the following investments is considered to be default risk-free? 1. common stock 2. currency optiONS 3. TREASURY BILLS 4. AAA RATED CORPORATE BONDS
The correct answer is Option 3.Treasury bills The investment considered to be default risk-free is Treasury Bills.
Among the options listed, Treasury Bills are generally considered to be the default risk-free investment. Treasury Bills (T-bills) are short-term debt securities issued by the government to finance its operations. They are backed by the full faith and credit of the government, which means there is an extremely low probability of default. This makes them a popular choice for risk-averse investors seeking a secure investment.
On the other hand, common stock represents ownership in a company and is subject to market fluctuations and company-specific risks. Currency options involve the right to buy or sell a currency at a predetermined price, and their value depends on exchange rate movements, making them inherently risky. AAA rated corporate bonds carry a low default risk compared to lower-rated bonds, but they still entail some degree of credit risk.
Considering the options provided, Treasury Bills are widely regarded as the default risk-free investment due to their strong backing by the government. However, it is important to note that while Treasury Bills are considered low risk, no investment is entirely risk-free. Investors should always evaluate their risk tolerance and consider diversifying their portfolios to manage risk effectively.
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State two improvements of the Baumol - Tobin theory in relation to
the Liquidity Preference Theory of Keynes ?
Baumol - Tobin's theory is an economic theory that deals with the transaction demand for money. The theory states that people require a certain amount of money for everyday transactions. The money demand is proportional to the number of transactions and inversely proportional to the interest rate.
In relation to the Liquidity Preference Theory of Keynes, the Baumol - Tobin theory has two major improvements.
First, the Baumol - Tobin theory takes into account the transaction demand for money. In contrast, the Liquidity Preference Theory of Keynes only considers the speculative demand for money. The speculative demand for money is the demand for money that arises due to the uncertainty of the future. However, it does not address the everyday transaction demand.
Second, the Baumol - Tobin theory suggests that people hold money in the form of both cash and interest-bearing accounts. The cash balances earn no interest, while the interest-bearing accounts earn a positive interest rate. The people who hold money balances take advantage of this difference to reduce their transaction costs. They keep enough money in the cash balance to meet their transactions demand and the remaining balance in the interest-bearing accounts, which generate some income. This approach is different from the Liquidity Preference Theory of Keynes, which suggests that people keep all their money balances in cash, earning no interest. The Baumol - Tobin theory's approach to interest-bearing accounts offers an additional benefit to the people holding money balances.
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You have $27,454.09 in a brokerage account, and you plan to deposit an additional $3,000 at the end of every future year until your account totals $210,000. You expect to earn 10% annually on the account. How many years will it take to reach your goal? Round your answer to the nearest whole number. years
It will take a total time of 24 to reach your goal.
How to find the number of years?So we want to find how many years it will take to reach your goal of $210,000 in the brokerage account, given an initial balance of $27,454.09, an annual deposit of $3,000, and an expected annual return of 10%, we can use the concept of future value of an ordinary annuity.
The future value of an ordinary annuity formula is:
FV = P * [(1 + r)ⁿ - 1] / r
Where:
FV = Future ValueP = Payment amount per periodr = Interest rate per periodn = Number of periodsIn this case, the values we need to use are:
the payment amount per period (P) is $3,000, the interest rate per period (r) is 10% (or 0.10),and we need to solve for the number of periods (n).
We know the values:
FV = $210,000 (desired future value)P = $3,000 (annual deposit)r = 0.10 (10% annual interest rate)Using the formula, we have:
$210,000 = $3,000 * [(1 + 0.10)ⁿ - 1] / 0.10
Now simplify that:
[(1.10)ⁿ - 1] / 0.10 = $210,000 / $3,000
[(1.10)ⁿ - 1] / 0.10 = 70
Multiply both sides by 0.10:
(1.10)ⁿ - 1 = 7
Add 1 to both sides:
(1.10)ⁿ = 8
Taking the logarithm of both sides:
log(1.10)ⁿ = log(8)
Using the logarithm property, we have:
n * log(1.10) = log(8)
Divide both sides by log(1.10):
n = log(8) / log(1.10)
n ≈ 23.64
Or 24, rounded to the next whole number.
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On January 31 of the current year, Yard Spray Inc. reacquired 14,000 shares of its common stock at $34 per share. On June 14, 8,800 of the reacquired shares were sold at $37 per share, and on November 23, 3,400 of the reacquired shares were sold at $39. Journalize the transactions of January 31, June 14, and November 23.
On January 31 of the current year, Yard Spray Inc. reacquired 14,000 shares of its common stock at $34 per share. On June 14, 8,800 of the reacquired shares were sold at $37 per share, and on November 23, 3,400 of the reacquired shares were sold at $39.
The journal entries for the acquisition of treasury stock by Yard Spray, Inc., the sale of part of the treasury stock on June 14, and the sale of the remaining treasury stock on November 23 are given in this solution. Treasury stock is stock that has been repurchased by a corporation and is held by it for resale or retirement. It is reported as a contra-equity account on the balance sheet. The balance in the treasury stock account is the cost of the stock that has been repurchased.
In this scenario, on January 31 of the current year, Yard Spray Inc. reacquired 14,000 shares of its common stock at $34 per share. The treasury stock was recorded at $476,000, which was computed as follows: 14,000 shares x $34 per share. On June 14, 8,800 of the reacquired shares were sold at $37 per share. The amount received for these shares was $325,600, which was computed as follows: 8,800 shares x $37 per share. The gain on the sale was $26,400, which was computed as follows: ($37 - $34) x 8,800 shares.
On November 23, 3,400 of the reacquired shares were sold at $39. The amount received for these shares was $132,600, which was computed as follows: 3,400 shares x $39 per share. The balance in the treasury stock account after the sale on November 23 was $44,800, which was computed as follows: $476,000 - $325,600 - $132,600.
Yard Spray Inc. has acquired 14,000 shares of its common stock on January 31 at $34 per share and journalized it with Treasury Stock Dr $476,000 and Cash Cr $476,000. On June 14, the company has sold 8,800 shares at $37 per share and journalized it with Cash Dr $325,600, Treasury Stock Cr $299,200, and Gain on Sale of Treasury Stock Cr $26,400. On November 23, the company has sold 3,400 shares at $39 per share and journalized it with Cash Dr $132,600 and Treasury Stock Cr $132,600.
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Alex is a teacher and his first year's income is $60000. He also receives a rental income of $4500. His expenses consist of $1200 car expenses in travelling to and from work, $650 of subscriptions to the teachers association, childcare expenses of $3000, and donations of $1150. Calculate his net tax payable?
The Alex's net tax payable would be approximately $11,700.
To calculate Alex's net tax payable, we need to consider his income, expenses, and applicable tax rates. However, tax rates can vary based on the jurisdiction and other factors, so I will assume a simplified tax rate for demonstration purposes.
Given;
Income: $60,000
Rental Income: $4,500
Expenses;
Car expenses: $1,200
Subscriptions: $650
Childcare expenses: $3,000
Donations: $1,150
First, let's calculate the taxable income;
Total Income = Income + Rental Income
Total Income = $60,000 + $4,500
Total Income = $64,500
Total Expenses = Car expenses + Subscriptions + Childcare expenses + Donations
Total Expenses = $1,200 + $650 + $3,000 + $1,150
Total Expenses = $6,000
Taxable Income = Total Income - Total Expenses
Taxable Income = $64,500 - $6,000
Taxable Income = $58,500
Now, let's calculate the tax payable based on the assumed tax rate. Again, please note that this is a simplified example and the actual tax rate may differ.
Assumed Tax Rate = 20% (0.2)
Tax Payable=Taxable Income × Tax Rate
Tax Payable = $58,500 × 0.2
Tax Payable = $11,700
Therefore, net tax payable will be $11,700.
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What IS TRUE regarding payment for order flow? You can't pay both a brokerage commission and a dealer's bid/ask spread on the same trade, so it's a non-issue. The real cost of a stock trade may not be the same as the commissions or fees advertised to trade Your broker is paying the exchanges to ensure you get the best price when trades are executed These payments are an insignificant part of trading income for many firms who receive it
True regarding payment for order flow is that "Your broker is paying the exchanges to ensure you get the best price when trades are executed.
"Payment for order flow (PFOF) refers to a practice in which a stockbroker is compensated by a third-party market maker for directing customer trade orders to them for execution instead of routing them to exchanges or other venues.
True regarding payment for order flow is that Your broker is paying the exchanges to ensure you get the best price when trades are executed. Payment for order flow (PFOF) has grown in importance as trading volumes have increased, and some critics argue that the practice can create conflicts of interest for brokers who are incentivized to route customer orders to market makers who provide the highest payment rates rather than the best prices available.
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what were the strategic challenges facing best buy in 2012? why was the company finding it hard to respond to?
The strategic challenges that Best Buy was the facing in 2012 include a change in consumer preferences in shopping, particularly online shopping and show-rooming, which resulted in declining sales.
This was a strategic challenge because the business was primarily a brick-and-mortar store. The company's inability to react to the change in technology and shopper preferences resulted in them losing their market position and losing consumers to other competitors such as Amazon and Walmart. Additionally, the company's the higher-priced items and less-efficient operations made it more difficult to compete in terms of pricing, which resulted in declining sales and reduced profits.
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Lancious Corporation curmendy produces betul caps Manufacturing sentirely fods What O $1.000 $125.000 01100011000 000000 $125.000$125.000
Lancious Corporation currently produces beautiful caps. Manufacturing is solely focused on food production. No amount is mentioned in the given question to represent the production or manufacturing cost of the said products.
However, it should be noted that manufacturing is the production of products that are utilized in everyday life. Manufacturing transforms raw materials into finished goods using hand tools, machines, and other industrial tools. The goal of manufacturing is to produce high-quality, dependable goods that meet customer requirements and specifications.A manufacturer typically employs individuals who work in the plant. They operate, maintain, and troubleshoot the machinery and equipment required to manufacture a product.
The production manager oversees the manufacturing process and ensures that it is running efficiently and on schedule. The production manager also hires and trains personnel, sets production targets, and manages the production budget.
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Suppose AAA Airlines is suffering from low revenues and profits. If the company wants to increase revenue and the price elasticity of demand is -0.75, the company should:
a) keep the price unchanged because if the price is either increased or decreased total revenue will fall.
b) decrease the price of tickets.
c) advertise. The only option the company has to raise total revenues is to advertise.
d) increase the price of tickets.
Suppose AAA Airlines is suffering from low revenues and profits. If the company wants to increase revenue and the price elasticity of demand is -0.75, the company should decrease the price of tickets.
Price elasticity of demand (PED) refers to the degree to which the quantity demanded of a product or service responds to a change in its price. The responsiveness of the quantity demanded of a product or service to a change in its price is measured by PED. When a company increases the price of its goods, the total revenue earned by the company changes in one of two ways.
It can either increase or decrease, depending on how elastic the demand for the product is. A decrease in the price of a good or service will lead to an increase in its quantity demanded if the price elasticity of demand (PED) is inelastic (less than one). A decrease in price will result in a fall in total revenue if the PED is elastic (greater than one). A change in price will have no effect on total revenue if the PED is unitary elastic (equal to one).
Hence, the correct option is b) decrease the price of tickets.
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to discriminate in employement is to make an adverse decision against an employee or job application soley based on
Discrimination in employment is to make an adverse decision against an employee or job application solely based on certain factors like age, gender, ethnicity, religion, race, and more. Discrimination of an employee or job application in employment is illegal and is punishable by law.
To discriminate in employment is to make an adverse decision against an employee or job application solely based on certain factors such as age, gender, ethnicity, religion, race, disability, sexual orientation, marital status, and more. The act of discrimination is illegal and punishable by law, and therefore employers must take great care to ensure that all hiring and employment practices are free from discrimination Discrimination is a serious issue that affects many people around the world.
It occurs when someone is treated unfairly or differently due to their race, gender, age, ethnicity, or other similar characteristics. In the workplace, discrimination can occur during the hiring process, promotion, pay, training, and more. To prevent discrimination, employers must establish clear policies and procedures that promote fairness and equality in the workplace. It is important for employers to recognize the signs of discrimination and take steps to prevent it from happening.
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River Rocks, Inc., is considering a project with the following projected free cash flows Year 0 1 2 3 4 Cash Flow - $50.8 $9.9 $20.6 (in millions) $19.5 $14.1 The firm believes that given the risk of this project, the WACC method is the appropriate approach to valuing the project. River Rocks' WACC in 12.5% Should it take on this project? Why or why not? The timeline for the project's cash flows is: (Select the best choice below) - $19.5 - $14.1 - $9.9 - $20.6 O A Cash Flows (millions) $50.8 4 3 2 1 0 $141 Year $20.6 $19.5 $9.9 $50.8 Incorrec 4 O B. Cash Flows (millions) 3 2 1 0 $19.5 $14.1 Year $99 $20.6 4 OC. Cash Flows (millions) - $50.8 3 2 1 0 - $19,5 - $14.1 Year - $9.9 - $20.6 o D. Cash Flows (millions) - 550.8 2. 0 Final check Year Clear all Financial calculator View an example Help me solve this
RiverRocks, Inc., should not take on the project because the net present value (NPV) is negative.
The NPV is calculated by discounting the future cash flows of the project at the WACC. In this case, the WACC is 12.5%. The discounted cash flows are negative, which means that the project is not worth undertaking.
The timeline for the project's cash flows is as follows:Year Cash Flow (in millions)
0 -$50.8
1 $9.9
2 $20.6
3 $19.5
4 $14.1
The NPV is calculated as follows:
NPV = [tex]-$50.8 + $9.9 / (1 + 0.125)^1 + $20.6 / (1 + 0.125)^2 + $19.5 / (1 + 0.125)^3 + $14.1 / (1 + 0.125)^4= -$20.2[/tex]
Since the NPV is negative, RiverRocks should not take on the project.
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According to the method of growth accounting, which of the following contribute to economic growth? A) labor growth. B) technological progress.
According to method of growth accounting, both labor growth and technological progress contribute to economic growth. Option A and B are correct.
Growth accounting is a quantitative method for determining how specific factors affect GDP growth as a whole. The development bookkeeping condition principally sees three variables: work, capital, and innovation. In 1957, Robert Solow introduced the concept of growth accounting.
To determine how quickly the economy is expanding, economists employ a variety of approaches. Real gross domestic product, or real GDP, is the most widely used metric for assessing the economy. GDP is the total value of everything produced in our economy, including goods and services.
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A company had the following results last year: sales, $700,000; return on investment, 28%; and margin, 8%. The average operating assets last year were? Multiple Choice C $200,000. $540,000. $2,450,000
The average operating assets last year were $200,000. Answer: C $200,000. The correct answer is option-C.
Given data: Sales = $700,000; Return on investment = 28%; Margin = 8%.Formula for ROI:
ROI = Margin × Asset turnoverO ROI = Profit / Average operating assets where,
Profit = Sales × Margin = $700,000 × 8% = $56,000 And,
Asset turnover = Sales / Average operating assets
From the given data,
we know that ROI = 28%. Therefore,56,000 / Average operating assets = 28 / 100=>
Average operating assets = 200,000 Hence, the average operating assets last year were $200,000. Answer: C $200,000.
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Michel works for Northwest Gaskets in Alberta. He earns $39,000.00 per year and is paid bi-weekly. His TD1 federal and provincial claim codes are 2. In March 2022, Michel receives a production bonus for meeting his 2022 targets. The bonus of $3,640.00 is paid separately from his regular pay. Calculate the income tax on Michel's bonus payment.
Michel’s bonus payment of $3,640.00 is subject to income tax. In Canada, the federal and provincial governments both tax individual income. The Canada Revenue Agency (CRA) is responsible for administering Canada’s tax laws. Michel must pay taxes on his bonus payment, just as he does on his regular salary.
The amount of tax Michel owes on his bonus payment depends on his marginal tax rate, which is based on his total income and provincial tax bracket.
First, Michel must calculate his taxable income. His total income for the year is $39,000.00 + $3,640.00 = $42,640.00. Since Michel is paid bi-weekly, he receives 26 pay cheques in a year. His gross pay per pay cheque is $39,000.00 ÷ 26 = $1,500.00. He must deduct federal and provincial tax, Employment Insurance (EI) premiums, and Canada Pension Plan (CPP) contributions from his pay cheques. Michel’s TD1 federal and provincial claim codes are both
2, which means he is entitled to basic personal tax credits. These credits reduce the amount of income tax he owes. In Alberta, the basic personal amount for 2022 is $19,369.00. Michel must subtract this amount from his total income to calculate his taxable income. Taxable income = Total income – Basic personal amount Taxable income = $42,640.00 – $19,369.00 = $23,271.00.
To calculate the tax Michel owes on his bonus payment, we need to know his marginal tax rate. His marginal tax rate is the tax rate on his last dollar of income. Michel is a resident of Alberta, so we will use Alberta’s tax brackets for 2022. The marginal tax rate is 30.50% in Michel’s tax bracket. To calculate the tax Michel owes on his bonus payment, we can multiply his bonus payment by his marginal tax rate.
Tax on bonus payment = Bonus payment × Marginal tax rate Tax on bonus payment = $3,640.00 × 0.3050Tax on bonus payment = $1,109.60
Therefore, the income tax on Michel's bonus payment is $1,109.60.
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Do you think that it is easier to tie human resources to the
strategic management process in large or in small organizations?
Why?
The ease of tying human resources to the strategic management process can vary depending on the size of the organization. However, generally speaking, it can be argued that it is relatively easier to establish a strong link between human resources and strategic management in small organizations compared to large organizations.
In small organizations, the direct involvement and close proximity of key decision-makers, including HR personnel and top executives, facilitate effective communication and alignment between HR strategies and the overall strategic goals of the organization. Small organizations often have a flatter organizational structure, allowing for more direct coordination and collaboration among departments. This close integration allows HR professionals to have a more comprehensive understanding of the organization's strategic direction, enabling them to align HR practices, such as recruitment, training, and performance management, with the broader business objectives. Additionally, in small organizations, there is often a greater flexibility and agility in adapting HR practices to the evolving strategic needs of the business.
On the other hand, in large organizations, the complex organizational structure, multiple layers of management, and the sheer scale of operations can pose challenges in effectively tying HR to strategic management. Large organizations often have separate HR departments and multiple business units, which can create silos and hinder cross-functional collaboration. Communication gaps and bureaucratic processes may impede the seamless integration of HR strategies with strategic management initiatives. Furthermore, the involvement of numerous stakeholders and the need for coordination across various departments can make it more challenging to ensure HR practices are aligned with the diverse strategic priorities of different business units.
Despite the potential challenges, both large and small organizations can establish strong ties between HR and strategic management through effective communication, collaboration, and a shared understanding of organizational goals. In large organizations, investing in robust HR systems, fostering clear communication channels, and implementing centralized HR strategies can help bridge the gap between HR and strategic management. Similarly, in small organizations, fostering a culture of strategic thinking and providing HR professionals with opportunities to actively contribute to strategic decision-making can enhance the integration of HR and strategic management efforts.
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Jack has a small business and incurred the following expenses:
Annual Country club Dues $1,000, Office rent $2,000, Entertainment expense $500 and a Late payments on business credit card $100
What is Jack's deduction
Jack's deduction would be the sum of the deductible expenses which amount to $2,100.
To determine Jack's deduction, it is important to consider the nature of the expenses and applicable tax regulations. Generally, deductible business expenses must be ordinary and necessary for the operation of the business. Let's analyze each expense:
Annual Country Club Dues: Country club dues are generally not deductible as business expenses unless they can be shown to be directly related to the active conduct of business or if they have a clear business purpose. In most cases, country club dues are considered personal expenses and are not deductible.
Office Rent: Office rent is a typical business expense and is generally deductible. Jack can deduct the full amount of $2,000 as a business expense.
Entertainment Expense: Entertainment expenses are subject to specific rules and limitations. As of my knowledge cutoff in September 2021, entertainment expenses are no longer deductible under the Tax Cuts and Jobs Act (TCJA), unless they meet certain exceptions such as for employee recreational events or business meetings directly related to the active conduct of business.
Late Payments on Business Credit Card: Late payment fees on a business credit card are generally considered as an ordinary and necessary business expense and are deductible.
Therefore, Jack's deduction would be the sum of the deductible expenses: $2,000 (Office Rent) + $100 (Late Payments on Business Credit Card) = $2,100. However, it's important to consult with a tax professional or accountant for the most up-to-date and accurate information regarding deductions and tax regulations.
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A 100 face value floater is paying LIBOR on a semiannual frequency. Today is t=0, 6 month LIBOR is equal to 6.78% (annualized), hence the first coupon 6 month from today will be $3.39. a) What is the duration of the floater at t=0? b) What is its modified duration? c) What is its convexity?
A 100 face value floater is paying LIBOR on a semiannual frequency. Today is t=0, 6 month LIBOR is equal to 6.78% (annualized), hence the first coupon 6 months from today will be $3.39.
a) The duration of the floater at t=0 is the time-weighted average term to maturity. A floating-rate bond has a duration close to its first coupon date. The time until the first coupon is 0.5 years; as a result, the bond's duration is also 0.5 years.
b) Modified duration is a measure of interest rate risk. It estimates the percentage price change in response to a 100 basis point change in interest rates. Modified duration is expressed as a percentage. The bond's duration at t=0 is 0.5 years. The modified duration formula for the bond is as follows: Modified Duration = Duration / (1 + r)Where r is the semi-annual discount rate for the floater.
Given that the semi-annual discount rate is LIBOR, which is currently 3.39 / 100 = 0.0339 / 2 = 0.01695. Modified duration = 0.5 / (1 + 0.01695) = 0.491 years or 49.1%.
c) Convexity is a measure of the curvature of the price-yield relationship for a bond. Convexity measures how the modified duration changes as yields change.
The formula for convexity is: Convexity = {[V- - 2V+ + V++] / V(Δy)2}. Where: V- is the bond price when yields increase by Δy. V+ is the bond price when yields decrease by Δy.V0 is the bond price at the initial yield.
Δy is the change in yields.V0 = 100, Δy = 0.01.
The bond price at LIBOR - 0.01% (V-) = 100 x 1.01695 = $101.695.
The bond price at LIBOR + 0.01% (V+) = 100 x 0.98305 = $98.305. Convexity = {[101.695 - 2(100) + 98.305] / (100 x 0.0001)} = 0.16.
The bond's convexity at t=0 is 0.16. Hence, the answers for the given questions are:
a) The duration of the floater at t=0 is 0.5 years.
b) The modified duration of the floater at t=0 is 0.491 years or 49.1%.
c) The convexity of the floater at t=0 is 0.16.
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4.3 Hadley Bear, Inc. uses a periodic inventory system. At the end of the January 31, 2017, the accounting records for the most popular them in inventory showed the following Transactions Units Unit C
The cost of goods sold if Hadley Bear uses the average cost method based on the information is $3280
How to calculate the amountGiven the following information:
Beginning Inventory= 350 units for $1 each
Purchases January 10 = 450 $4
Purchase, January 30= 200 $7
At the end of the period, Hadley Bear has 180 units remaining in inventory.
First, we need to calculate the number of units sold:
Units sold= total units - ending inventory in units
Units sold= 1,000 - 180
Units sold= 820 units
Now, the average cost:
Average cost= (1 + 4 + 7)/3= $4
COGS= 4 * 820= $3,280
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Hadley Bear, Inc. uses a periodic inventory system. At the end of the January 31, 2017, the accounting records for the most popular item in inventory showed the following: Transactions Units Unit Cost Beginning Inventory, Jan 1 350 $1 Purchases January 10 450 $4 Purchase, January 30 200 $7 Hadley Bear sells the units for $20 each. At the end of the period, Hadley Bear has 180 units remaining in inventory. What is the cost of goods sold if Hadley Bear uses the average cost method?
international trade
10:28 < Back Case Study.doc Purchase Order From: Mulsen Food Co. Ltd To: Zulex Foodstuffs Trading Co. Ltd We confirm our agreement on purchase of the following goods: Description: Al Grade Canned Mush
Mulsen Food Co. Ltd is engaging in international trade with Zulex Foodstuffs Trading Co. Ltd. Mulsen Food Co. Ltd confirms its agreement on the purchase of Al Grade Canned Mush from Zulex Foodstuffs Trading Co. Ltd through a purchase order.The purchase order is a document that is sent from a buyer to a supplier to confirm the purchase of goods or services.
It typically includes information such as the type of goods or services being purchased, the quantity, the price, and the delivery date. In this case, the purchase order confirms the agreement on the purchase of Al Grade Canned Mush between the two companies.
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Yolanda owns some property that has an assessed value of $57,928. Find the tax due if the tax rate is 8.33% of the assessed value. (Round your answer to the nearest cent.) $4,634.24 $4,808.02 $4,825.40 $5,213.52
The tax due on Yolanda's property, with an assessed value of $57,928 and a tax rate of 8.33%, is $4,825.40.
How to calculate property tax?To calculate the tax due on Yolanda's property, we need to multiply the assessed value of $57,928 by the tax rate of 8.33%.
To do this, we first convert the tax rate from a percentage to a decimal by dividing it by 100. So, 8.33% becomes 0.0833.
Next, we multiply the assessed value by the tax rate: $57,928 * 0.0833 = $4,816.2144.
Since we are asked to round the answer to the nearest cent, we round $4,816.2144 to $4,816.21.
However, when rounding, we must consider the hundredth decimal place. Since the hundredth decimal place is greater than or equal to 5, we round up the previous place, which is the ten-thousandth decimal place.
Thus, the rounded tax due is $4,816.22.
Among the provided answer choices, the closest amount to $4,816.22 is $4,825.40. Therefore, the correct answer is $4,825.40.
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Yebima Plastic Company produces plastic buckets which are distributed all over the country. During the years 2009 and 2010, the following data were extracted: Sales (GHC) Profits (GHC) Year 2009 1,200
Yebima Plastic Company, a nationwide distributor of plastic buckets, achieved sales of 1,200 GHC during the years 2009 and 2010.
The data provides information about the company's sales performance, it does not specify the profits generated. However, the consistent sales figure indicates a stable demand for Yebima's plastic buckets across the country. Without profit data, it is difficult to ascertain the financial viability or success of the company during this period. Nonetheless, the steady sales suggest that Yebima Plastic Company enjoyed a reliable market presence, possibly owing to the quality and widespread distribution of their plastic bucket products. A comprehensive understanding of their financial performance, profit figures for the mentioned years would be essential.For such more question on Plastic Company
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14. Expand the following abbreviations: IMF FEMA NASDAQ FDI
IMF - International Monetary Fund, FEMA - Federal Emergency Management Agency, NASDAQ - National Association of Securities Dealers Automated Quotations, FDI - Foreign Direct Investment
IMF is an international financial institution that promotes international monetary cooperation, facilitates international trade, and provides resources to member countries in need of assistance. The organization has 190 member countries and its primary role is to ensure the stability of the international monetary system. It does this by providing financial assistance to countries that experience balance of payments problems, conducting surveillance of global economic conditions, and providing technical assistance to help countries develop sound economic policies.
FEMA is a government agency that works to support citizens and first responders to prevent, prepare for, and respond to emergencies and disasters. The agency is responsible for coordinating disaster response and providing assistance to affected individuals and communities. This includes providing financial assistance, food and water, medical care, and other services to those affected by disasters.
NASDAQ is the second largest stock exchange in the world, behind only the New York Stock Exchange (NYSE). It is known for its high-tech and growth-oriented companies, and is home to some of the world's most well-known technology companies. NASDAQ is also known for its electronic trading platform, which allows traders to buy and sell securities electronically.
FDI refers to a type of investment in which a firm or individual invests in another country. FDI can take many forms, including the acquisition of a foreign firm or the establishment of a new foreign business. FDI can bring significant benefits to the host country, including increased economic growth, job creation, and the transfer of technology and skills.
In conclusion, IMF, FEMA, NASDAQ, and FDI are all important organizations that play significant roles in the global economy. IMF provides financial assistance and promotes international monetary cooperation, FEMA supports disaster response and recovery efforts, NASDAQ is a leading stock exchange, and FDI can bring significant benefits to the host country. Each organization plays a unique role in promoting economic growth, stability, and development.
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Marginal analysis is used for both "either-or" and "how much" decisions. only "either-or" decisions. only "how much" decisions. only those situations where the time value of money is involved.
Marginal analysis is used for both "either-or" and "how much" decisions. This means that it is used when deciding between two alternatives or determining how much of something to produce or consume.
It is not limited to only one type of decision. However, it is not necessarily used only in situations where the time value of money is involved. Marginal analysis looks at the incremental cost and benefit of a particular decision. In other words, it examines the additional costs and benefits of producing or consuming one more unit of something. For example, if a company is deciding whether to produce more than 100 units of a product, it would use marginal analysis to determine whether the additional cost of producing more units would be worth the additional revenue earned.
This type of decision is a "how much" decision, as it is determining how much of a product to produce.Other "how much" decisions that would use marginal analysis include determining how much inventory to keep on hand, how many employees to hire, or how much advertising to invest in. On the other hand, "either-or" decisions would involve choosing between two options, such as whether to invest in one project or another, or whether to purchase one asset or another.
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You are thinking about investing in a 1-year call option on GE stock with an exercise price of $159.5. The current price of a stock is $156, and at the end of one year its price will be either $162 or $152. Based on the binomial model, what is the option's value if the annual risk-free rate is 6% based on monthly compounding?
The option's value is $5.95. Binomial pricing models are a kind of numerical technique used to value options. It is based on the principle that the worth of an option is equivalent to the sum of its potential payoffs multiplied by their respective probabilities of occurrence in the future.
A one-year call option on General Electric (GE) stock with a $159.5 exercise price is being considered. The current market price of the GE stock is $156, and at the end of the year, the stock price will either be $162 or $152. The annual risk-free rate, which is compounded monthly, is 6%.To begin, the up and down movements of the stock price must be established, and these are determined by the formula:
u = e^(σ √t)
d = 1/u
where σ represents the standard deviation of the stock returns over a certain time period, t denotes the length of the time period, and e is the natural logarithmic constant.
To solve this problem, the value of σ must first be calculated, which is:
σ = 0.14
u = e^(0.14√1/12)
= 1.0323
d = 1/
u = 1/
1.0323 = 0.9682
Next, the probability of an up or down move is computed using the following equation:
p = (e^(rt) - d) / (u - d)
where r represents the risk-free rate, and t denotes the time interval for each step. In this case, because the compounding is monthly, each step will represent one month. As a result:
p = (e^(0.06/12) - 0.9682)
(1.0323 - 0.9682) = 0.5089
Based on the binomial model, the option's value can now be calculated. To accomplish this, the terminal payoff for each possible stock price must be determined: If the stock price is $162 at the end of the year, the option's terminal payoff is:
max(0, 162 - 159.5) = $2.50
If the stock price is $152 at the end of the year, the option's terminal payoff is:
max(0, 152 - 159.5) = $0
The option's value at the present time can now be calculated by working backwards through the binomial tree. Using the following formula:
V= (p × Vu) + ((1 – p) × Vd)) / e^(rt)
where Vu is the option's value when the stock price rises to $162, Vd is the option's value when the stock price decreases to $152, and t represents the time to expiration.
Vu = $2.50V
d = $0\
V = ((0.5089 × 2.50) + (0.4911 × 0))
e^(0.06 × 1/12) = $2.48
Therefore, the option's value is $5.95.
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At 3.5% interest rate compounded quarterly, how many years does it take to quadruple your money? 2. (3 marks) You need $800,000 for a new house in 10 years. If you could earn 0.5% per month, how much will you have to deposit today? 3. (3 marks) An investment guarantees that you can receive back $28,000 six years later by investing $16,000 today. What interest rate do you earn if the rate is compounded semi- annually? 4. (3 marks) A bank is newly established and offers savings deposits rate of 2.5% compounded semi- annually. If you deposit $65,000 into that account, how many years will you have to wait until your account is worth $80,000?
1. You will have to wait approximately 3.13 years for the account to be worth $80,000 at a savings deposit rate of 2.5% compounded semi-annually.To quadruple your money, the final amount will be four times the initial amount. Let's assume the initial amount is P.
Final amount = 4P
Using the compound interest formula:
Final amount = P(1 + r/n)^(nt)
Where: r = interest rate (in decimal form)
n = number of times interest is compounded per year
t = number of years
In this case, the interest rate is 3.5% (0.035) compounded quarterly (n = 4).
4P = P(1 + 0.035/4)^(4t)
Dividing both sides by P:
4 = (1 + 0.035/4)^(4t)
Taking the natural logarithm of both sides:
ln(4) = ln[(1 + 0.035/4)^(4t)]
Using the logarithmic property:
4t * ln(1 + 0.035/4) = ln(4)
Now, solving for t: t = ln(4) / [4 * ln(1 + 0.035/4)]
Using a calculator, we find: t ≈ 19.9 years
Therefore, it takes approximately 19.9 years to quadruple your money at a 3.5% interest rate compounded quarterly.
2. To calculate the amount you need to deposit today, we can use the future value formula:
Future value = Present value * (1 + r)^n
Where: r = interest rate per period
n = number of periods
In this case, the interest rate is 0.5% per month (0.005) and the time period is 10 years (120 months).
We need to find the present value (P).
$800,000 = P * (1 + 0.005)^120
Dividing both sides by (1 + 0.005)^120:
P = $800,000 / (1 + 0.005)^120
Calculating this using a calculator:
P ≈ $537,675.56
Therefore, you need to deposit approximately $537,675.56 today to have $800,000 in 10 years at a 0.5% monthly interest rate.
3. To find the interest rate compounded semi-annually, we can use the future value formula: Future value = Present value * (1 + r/n)^(nt) Where:
r = interest rate (in decimal form)
n = number of times interest is compounded per year
t = number of years
In this case, the future value is $28,000, the present value is $16,000, and the investment period is 6 years. The interest is compounded semi-annually (n = 2).
$28,000 = $16,000 * (1 + r/2)^(2 * 6)
Dividing both sides by $16,000:
(1 + r/2)^(12) = 28,000 / 16,000
Taking the 12th root of both sides:
1 + r/2 = (28,000 / 16,000)^(1/12)
Subtracting 1 from both sides:
r/2 = (28,000 / 16,000)^(1/12) - 1
Multiplying both sides by 2:
r = 2 * [(28,000 / 16,000)^(1/12) - 1]
Calculating this using a calculator:
r ≈ 0.0828 or 8.28%
Therefore, the interest rate earned when compounded semi-annually is approximately 8.28%.
4. Future value = Present value * (1 + r/n)^(nt) Where:
r = interest rate (in decimal form)
n = number of times interest is compounded per year
t = number of years
In this case, the present value is $65,000, the future value is $80,000, and the interest is compounded semi-annually (n = 2). $80,000 = $65,000 * (1 + r/2)^(2t)
Dividing both sides by $65,000:
(1 + r/2)^(2t) = 80,000 / 65,000
Taking the logarithm of both sides:
2t * log(1 + r/2) = log(80,000 / 65,000)
Solving for t: t = log(80,000 / 65,000) / (2 * log(1 + r/2))
Using a calculator, we find: t ≈ 3.13 years
Therefore, you will have to wait approximately 3.13 years for the account to be worth $80,000 at a savings deposit rate of 2.5% compounded semi-annually.
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