Answer:
functional representative
Explanation:
A marketing research is most likely to serve as a functional representative in a new product development team.
Market research are conducted to know the viability of new goods and services in the market before it is launched. It is based on unbaised opinion of customers. It help the company to understand the target customer, pricing, other expectation of customer, which is extremely important in designing and developing new product. Therefore, market research serve as functional representative.
The customer journey has become more complex, requiring a dedicated bidding strategy. Google's solution is automated bidding. How can automated bidding benefit advertisers? (Choose two.) Select All Correct Responses a. Allows advertisers to serve ads only at specific times. b. Guarantees reduced conversion costs for advertisers. c. Uses machine learning to set bids, which saves time. d. Allows advertisers to bid only for clicks from a specific group. e. Is auction-specific to increase the chance for conversion.
Answer:
Option "c" and "e" are the correct answer to the following statement.
Explanation:
Automated Bid Techniques help to Boost of access to pages. Optimize Clicks sets bids directly to help the customer get as many page views within his demanded expenses as applicable and faster.
showing multiple results help the advertiser to increase the chance of selling his commodity.
Google optimization technique help advertiser to make their commodity sell faster and reliable.
Amy and Katie have between $125 and $200 dollars to spend on jewelry for Christmas presents for their friends. If they buy 8 bracelets at $3.50 each and 6 necklaces at $12 each, how many paris of earrings can they buy if they cost $6.00 each?
Answer:
They can purchase up to 37 necklaces
Explanation:
budget_ 125 + 200 = 325 dollars
bracelets 8 units x $ 3.5 each = $ 28
necklaces 6 units x $ 12 each = $ 72
total spending $ 100
remanining $225
cost per earring $ 6
maximum amount of earring they can purchase: 225 / 6 = 37 units
Jamal critically analyzes media content by considering its particular presentation, its underlying political or social messages, and its media ownership or regulation. Jamal demonstrates __________.
Answer: Media literacy
Explanation:
Media literacy is the ability to critically access, analyze by considering particular presentation, evaluate and create using all forms of media communication. Media literacy is intended to promote awareness of media influence and create an active stance towards both consuming and creating media. Media literacy empowers people to be critical thinkers and makers, effective communicators and active citizens.
Tom sold his home for $140,000 paying a 7% real estate commission. He bought the home for $45,000, paid $2,000 in closing costs, and added a new fireplace and family room for $35,000. After figuring the adjusted basis for this home, what is the amount of taxable gain?
Answer:
$48,200
Explanation:
Given:
Selling price of home = $140,000
Acquisition price = $45,000
Closing cost = $2,000
Cost of fireplace and family room = $35,000
Real estate commission = 0.07 × 140,000 = $9,800
Total adjusted basis = 45,000 + 2,000 + 35,000 + 9,800
= $91,800
Taxable gain = Selling price - adjusted basis
= 140,000 - 91,800
= $48,200
Ingente Corp. and Ventruni Corp. will be combining their resources to build the largest railway system in the world. Both companies will equally share costs and profits from this venture. This form of global business is an example of a _____.
Answer:
Strategic Alliance.
Explanation:
Strategic alliances are agreements between two or more independent companies to cooperate in the manufacturing, development, or sale of products and services or other business objectives.
Huge businesses can disproportionately influence politics, shape tastes, and dominate public discourse. True False
Answer:
That's true
Explanation:
Yes they disproportionately influence politics, shape tastes, and dominate public discourse.
To disproportionately influence means that they influence in a measure that's out of proportion. This is because they are huge and control massive wealth. Money answers all thing they say. They have all it takes to monopolize certain commodities, thereby leaving the populace perpetually at their mercy or subject or glued to their products.
They spend heavily on advertisements and sales campaigns and hence subtly they influence the people's judgement and disposition to their products. The ultimate implication of that would be that the society's taste is also at their mercy too.
Political influence is one thing they command since most of the political sponsors are owners of these huge businesses.
A bank has Tier I capital of $90 million and Tier II capital of $70 million. The bank has total assets of $2,522 million and risk-weighted assets of 2,017.6 million. This bank is:_______.
A. Critically under-capitalized.
B. Significantly under-capitalized.
C. Under-capitalized.
D. Adequately capitalizede.
Final answer:
The bank is under-capitalized.
Explanation:
The bank is C. Under-capitalized.
To determine the capital adequacy, we need to calculate the total capital ratio which is the sum of Tier I and Tier II capital divided by the risk-weighted assets. In this case, the total capital would be $90 million + $70 million = $160 million.
The total capital ratio is therefore $160 million / $2,017.6 million = 0.0794 or 7.94%. According to banking regulations, a bank is considered under-capitalized if its total capital ratio is less than 8%, which is the case here. Therefore, the bank is under-capitalized.
6. Calculating a country's population growth rate takes into account all of the
following except
A the number of births in a given year
B the number of people who marry in a given year
OC the number of people who move to a country in a given year
D the number of deaths in a given year
Answer:
The answer is B. the number of people who marry in a given year
Explanation:
Population growth rate is an important indicator that is required when it comes to long term political and economic strategies of a nation. These could be in areas such as employment, elections and taxation.
Total births, deaths and the migration and immigration are considered when calculating this amount yet the number of marriages in a country has no effect on this.
anufacturers consider selling and administrative costs to be A. prime costs. B. conversion costs. C. inventoriable costs. D. period costs.
Answer:
D. period costs.
Explanation:
The period cost is the cost which is incurred during the passage of time. It includes the major part of the ling and administrative expenses of the income statement. This cost is not capitalized. It is to be allocated based on the expenses that are against the revenue.
Example - Depreciation on delivery trucks, advertising expense, etc
Maurice can drive or fly from Jacksonville, Florida to Atlanda, Georgia, for a one-day business trip. If he drives, he will be able to work three hours once he arrives in Atlanta, whereas traveling by plane will enable him to work eight hours. His expected income from each hour of work in Atlanta is $30. If Maurice is a rational decision maker, he will fly if and only if the price differential (air cost minus driving cost) is less than.
a. $30.
b. $90.
c. $150.
d. $240.
Answer:
c. $150.
Explanation:
the extra amount of hours Maurice can work taking a flight will be of 5 hours
(8 hours taking a plane against 3 hours if driving)
As the income per hour is 30 dollar it can generate;
5 hours x $30 per hour = $150
Maurice will only travel by plane if it generates the same or more income than the driving thus, a differencial price of less than 150 dollars will provide Maurice with a net gain. Also we should consider that if Maurice drives his car it is taking a depreication hit per mile while driving that is being ignoer to keep the assignment simple. But considering that the amount of differential income could be higher than $150
Why is the yield on 30-year Treasury bonds important? a. It indicates how much the Treasury has borrowed b. It indicates whether the US government has a balanced budget c. It represents the base-level cost of capital in the US d. It reflects Federal Reserve fiscal policy e. It is the fear index for the US markets
Answer:
c. It represents the base-level cost of capital in the US
Explanation:
Cost of capital is the minimum return that is needed to carry out capital projects such as building homes, road construction. It is the return that will make government projects viable.
So the United States government depend on the Treasury bonds 30 year yield to fund spending on various capital projects.
Edgar is a chef and the kitchen manager in an upscale restaurant. He is very knowledgeable in both the culinary and restaurant management fields. Because he possesses these technical skills, Edgar can be considered a(n) ________ worker.A) cognitive
B) focused
C) top-rated
D) MBO
E) knowledge
Answer:
Edgar is a chef and the kitchen manager in an upscale restaurant. He is very knowledgeable in both the culinary and restaurant management fields. Because he possesses these technical skills, Edgar can be considered an Management by objectives (MBO)
Explanation:
Management by Objectives (MBO) has to do with management of organization in terms of their goals and ensure maximum performance is recorded. Edgar used MBO as a result helps the restaurant to harness their resources and manage it efficiently.
In the United States, a three-pound can of coffee costs about $5. If the exchange rate is 0.8 euros per dollar and a three-pound can of coffee in Belgium costs 7 euros. What is the real exchange rate?
Answer:
1 euro = $1.25
Explanation:
if 3Ib of coffee cost $5
while exchange rate is .8euro = $1
therefore 3Ib coffee in euro will be .8 * 5 = 4euros
and 3Ib coffee cost 7euros
while exchange rate is .8euro = $1
therefore 3Ib coffee in dollar will be 7 *1 / .8 = $8.75
now 7euro = $8.75
4 euros will be equal to 4 * 8.75 / 7 = $5
so if 7 euros = $8.75 and
4 euros = $5
therefore 1 euro will be 1 * 5 / 4 = $1.25
The real exchange rate between the U.S. and Belgium for coffee is 0.571. This means that 1 Belgian coffee can is equivalent to 0.571 U.S. coffee cans after adjusting for price levels. Coffee prices can fluctuate due to factors like supply shifts and demand elasticity.
Given:
Price of a three-pound can of coffee in the U.S.: $5Nominal exchange rate: 0.8 euros per dollarPrice of a three-pound can of coffee in Belgium: 7 eurosFirst, convert the U.S. coffee price to euros:Price in euros = (price in dollars) * (exchange rate)Price in euros = $5 * 0.8 euros/dollar = 4 eurosNext, calculate the real exchange rate using the following formula:Real exchange rate = (price in domestic currency) / (price in foreign currency)Real exchange rate = 4 euros / 7 euros = 0.571Therefore, the real exchange rate is 0.571. This means that after accounting for the difference in the price levels, 1 Belgian coffee can is equivalent to 0.571 U.S. coffee cans.It's important to note that coffee prices can fluctuate due to various factors including supply shifts, such as a major frost, and the price elasticity of demand.
Understanding the real exchange rate helps in comparing the actual purchasing power between countries.
Atlas Corporation sells 100 bicycles during a month. The contribution margin per bicycle is $200. The monthly fixed expenses are $8,000. Compute the profit from the sale of 100 bicycles ________.a. $12,000b. $10,000c. $20,000d. $8,000
Answer:
A, $12,000
Explanation:
Profit is the financial gain as a result of the difference between the selling price of a product and the cost/production cost of the product.
To calculate the profit from the sale of the bicycles, we use the formula
Profit = (marginal cost x quantity of bicycles) - Expenses.
we have,
Profit = ($200 x 100) - $8,000
Profit = $20,000 - $8,000
Profit = $12,000.
Cheers.
In the year, 2005 Janice Quinn sells a five-year-old car to Used Car, Inc. for $3,000. In the same year, Used Car, Inc. resells the car to Ima Goner for $3,500. What is the contribution of this transaction to GDP in the year 2005?
A. $0
B. $500
C. $3,000
D. $6,500
XYZ Company was considering moving its operations to a less-developed country. As part of the decision-making process, the executive managers of the company stood in the shoes of the current employees and asked themselves how it might feel to lose their jobs as a result of the proposed action. The executive managers of XYZ Company were demonstrating?
Answer:
Moral imagination.
Explanation:
Moral imagination is an act of exploring the various likely impact of a new decision in order address potential ethical issues.It assists an individual to see beyond a laid down rule and standards and ethical values will not be violated.
It entails being initiative to develop new morally upright ideas , knowledge and actions outside the regular ethical principles.
Every human being posses moral imagination to a certain degree but its has to be developed before it can be of ethical contribution.
Because companies spend more than half their revenue on purchases of goods and services, they should strategically manage key sources of supply to reduce the total cost of materials and services. True or false?
Answer:
True.
Explanation:
Purchasing is an important part of a company and it's operating efficiency determines whether a company would be profitable for not. Let's assume, A company sells their goods (250 Pencils) for $500 but to make those $250 they have procured raw materials worth of $5 dollar for each pencil, now due to various other factors their prices were low or anything else we are not going into that, however, the point to understand is the importance of procurement and it's process.
Procurement with analysis and strategies can help you save money which you wouldn't have because you never though about it. Why? Because procuring process keeps all seasonal factors, all elements included in purchasing,all costs in mind and than let's you know what quantity from which supplier, for how much should be purchased?If staff salaries were $44,000/month last year, and the yearly cost increase from last year to this year $108,000, what is the monthly labor cost this year?
Answer:
The monthly labor cost this year=$53,000
Explanation:
Step 1: Determine yearly cost of labor last year
T=C×N
where;
T=total cost of labor last year
C=labor cost per month
N=number of months in a year
In our case;
T=unknown, to be determined
C=$44,000 per month
N=12 months
Replacing;
T=(44,000×12)=$528,000
Step 2: Determine yearly cost of labor this year
This years cost of labor can be expressed as;
Y=T+I
where;
Y=this year's labor cost
T=last years labor cost
I=the increase in cost from last year to this year
In our case;
Y=unknown to be determined
T=$528,000
I=$108,000
Replacing;
Y=(528,000+108,000)=$636,000
Step 3: Determine monthly cost of labor for this year
Monthly labor cost this year=this years labor cost/number of months in a year
where;
Monthly labor cost this year=unknown to be determined
this years labor cost=$636,000
number of months in a year=12
Replacing;
Monthly labor cost this year=(636,000/12)=$53,000
The monthly labor cost this year=$53,000
Answer:
The monthly labor cost this year=$53,000
Explanation:
Tara is using Search Audiences to reach her most valuable customers. Which direct benefit might she obtain by using Search Audience?
A. Receiving automatically-generated keyword and ad content suggestions
B. Delivering a customized message to the right user at the correct bid
C. Learning granular insights regarding her search network performance
D. Getting suggestions on the best automated bid strategies for her campaigns
Answer:
option B
Explanation:
Whenever a customer examines online sites and content, signals are produced that can be captured and understood while preserving the identity of the user. These regular web-wide experiences, including searching, reading material, watching videos, and engaging with social media, help one understand and categories audiences.
Our Audience Solutions will bring your content to the right people at the moments that matter, taking into account details such as age and gender or specific passions and interests. And we can offer these targeted advertisements across networks — search, display, web, and video — to your audience.
Thus from the above we can conclude that the correct option is B .
Test marketing _____.
A. identifies two or more segments within the market for a particular company's products.
B. provides information for decisions on product improvements and new-product introductions.
C. includes choosing and evaluating locations, channels, and distribution partners.
D. focuses on database development through optical scanning at the point of purchase.
E. involves understanding how one's target consumers behave as shoppers, in different channels and formats, and leveraging this intelligence to the benefit of all stakeholders.
Answer:
B. provides information for decisions on product improvements and new-product introductions is the correct answer.
Explanation:
Test marketing is used in businesses to test and to provide infotrmation about the viability of the new product and the marketing campaign.
Before the launching of the new product in the market test marketing is done.
The test marketing proposes is to collect sufficient information regarding the product, price, parts of the marketing mix, distribution channels and media spend.
The advantage of test marketing is it minimizes the risk of product failure and it can produce a promotional buzzing that promotes the product launch.
Fill in the appropriate words to complete how the courts determine employee or independent contractor status. (supply / payment / control / specialist / skill / employed / occupation)a. How much does the employer exercise over the details of the work? b. Is the worker engaged in or business distinct from that of the employer? c. Is the work usually done under the employer’s direction or by a without supervision? d. Does the employer the tools at the place of work? e. For how long is the person ? f. What is the method of —by time period or at the completion of the job? g. What degree of is required of the worker?
Answer:
a) How much control does the employer exercise over the details of the work?
b) Is the worker engaged in an occupation of business distinct from that of the employer?
c) Is the work usually done under the employer's direction or by a specialist without supervision?
d) does the employer supply the tools at the place of work?
e) For how long is the person employed?
f) What is the method of payment by time period or at the completion of the job?
g. What degree of skill is required of the worker?
Explanation:
These are just the seven question asked when the courts want to determine the contract status of an employee or an independent contractor. They make use of these eight questions below:
a) How much control does the employer exercise over the details of the work?
b) Is the worker engaged in an occupation of business distinct from that of the employer?
c) Is the work usually done under the employer's direction or by a specialist without supervision?
d) does the employer supply the tools at the place of work?
e) For how long is the person employed?
f) What is the method of payment by time period or at the completion of the job?
g. What degree of skill is required of the worker?
Amazon, the largest online retailer, has experimented with physical stores and recently bought Whole Foods. Whole Foods has almost 500 stores and gives Amazon facilities for rapid physical expansion. The general insight here is that
Answer:
to survive today, organizations need to be present in both the online and physical markets
Explanation:
So far Amazon has dominated the online space when it comes to buying products and services. But the scenario in the question makes it clear that having only one channel open to customers (online) is not sufficient.
It is necessary to diversify by having physical stores in addition to online stores.
Some consumers for example will want to examine what they are buying before paying, others will not have the patience to wait for delivery of goods. So the physical store will serve these segments of customer's.
Final answer:
Amazon's move into physical retail through the acquisition of Whole Foods and the opening of physical stores represents a blend of online and direct customer interaction, leveraging economies of scale for expanded growth.
Explanation:
The general insight regarding Amazon's acquisition of Whole Foods and their expansion into physical retail stores demonstrates a strategic move of blending online dominance with brick-and-mortar presence. While Amazon had traditionally been an online retailer, holding inventory in computerized warehouses, it is now leveraging Whole Foods' nearly 500 stores for rapid physical expansion, thereby gaining the benefits of direct customer interaction and potentially faster delivery options.
By moving into physical spaces in various states including California, Oregon, and Washington, with future plans for Illinois, Massachusetts, New Jersey, and New York, Amazon showcases the economies of scale it can harness. These economies are possible through its highly automated warehouses located in low-rent areas that contribute to lower average costs per sale, highlighting Amazon's continuous exploration of growth opportunities by diversifying its sales approach.
DELL's principal reason for existing is to earn a profit for its shareholders. The means by which DELL does this is through the manufacture of computers. What do these two statements describe?
Answer:
Mission of Dell
Explanation:
An organisation's mission statent is a short description of why the company exists, and what their overall strategy for success is.
It is a way management communicates its goals to the employees and the means the organisation intends to achieve these goals.
In the example above the main aim of DELL is to make profit for its shareholders. The strategy for achieving this is by production of computers.
Final answer:
The two statements describe Dell's primary purpose of earning profits for its shareholders and the means of achieving this through the manufacture and sale of computers. This reflects the broader objective of businesses in a market economy to maximize profitability and sustain operational efficiency amidst competitive market conditions.
Explanation:
The two statements describe Dell's business purpose and its primary means of achieving that purpose. Dell exists mainly to earn a profit for its shareholders, a common objective for most private-sector corporations, companies, small businesses, and individual entrepreneurs. This goal of profitability drives production and operational decisions within a market economy. Dell achieves this through the manufacture and sale of computers, a strategy that places the company within a highly competitive market where efficiency, innovation, and market share are keys to success. As a case in point, in 2005, Dell was the largest personal computer manufacturer, yet it sold only about 19% of personal computers worldwide, highlighting the competitive nature of the market. Nonetheless, the underlying principle for Dell and similar firms is the maximization of profits for their investors, achieved by combining operational efficiency, market adaptation, and the strategic offering of products or services.
Profits are essentially the reward for business owners and the measurement that determines whether a business stays operational. Firms that fail to operate efficiently or to provide products or services that attract sufficient demand at profitable prices tend to exit the market. This dynamic underscores the importance of continually enhancing efficiency, understanding market dynamics, and innovating in response to consumer needs.
Crane Company received $19200 on April 1, 2020 for one year's rent in advance and recorded the transaction with a credit to a nominal account. The December 31, 2020 adjusting entry is_________
Answer:
Year end Adjusting Entry
Dr. Cr.
December 31, 2020
Unearned Rent Revenue $144,000
Rent Revenue $144,000
Working:
Rent revenue for the year = ($192,000 x 9 ) / 12
Rent revenue for the year = $144,000
Answer:
Debit nominal account $14,400
Credit Rental revenue $14,400
Being entries to recognize rental income earned between 1 April and 31 December 2020.
Explanation:
When cash is received in advance for services yet to be rendered, the company has a liability to perform. As such the entries posted then is a debit to cash and a credit to unearned revenue.
If Crane Company received $19200 on April 1, 2020 for one year's rent in advance and recorded the transaction with a credit to a nominal account, as at December 31, 2020, the amount earned
= (9/12) × $19200
= $14,400
This amount would be debited to the nominal account and a credit would be recorded in the rental revenue account.
Casper was asked to run a customer survey and analyze its results for his company. After presenting the results to the marketing team, they struck upon a marketing solution to an identified customer problem. Casper and his marketing team have just completed what marketing process?
Answer:
marketing research
Explanation:
Marketing research -
It refers to the method of collecting , interpreting and analyzing the information about the goods and services in the market , is referred to as the marketing research .
All information about the past of the products is considered , the target of the company is also considered along .
The method helps for the prediction of the future of the company .
Hence , from the given scenario of the question ,
The correct term is marketing research .
Casper and his team performed the marketing research process, which started with the preparation and execution of a customer survey. The data collected led to the analysis and identification of a marketing solution for a customer problem, representing the three stages of this process: strategy, solution, and significance.
Explanation:Casper and his marketing team have just completed a process known as Marketing Research. This is an organized effort to gather and interpret information about a customer problem. In this scenario, the initial step was running a customer survey. To further understand the subject, one exemplification can be a marketing manager for an electronics chain store seeking customer data. They collected information from randomly selected customers with questionnaires asking for variables of interest like age.
After data acquisition, the analysis was conducted and presented to the marketing team. Upon analysis, they found a solution to a particular customer problem, thus completing a three-stage process which can be broken down into strategy (formulating a plan to collect data), solution (analyzing the data and coming to a conclusion), and significance (applying the conclusion to solve a problem).
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Heating & cooling installs and services commercial heating and cooling systems. elklandelkland uses job costing to calculate the cost of its jobs. overhead is allocated to each job based on the number of direct labor hours spent on that job. at the beginning of the current year, elklandelkland estimated that its overhead for the coming year would be $ 61 comma 500$61,500. it also anticipated using 4 comma 1004,100 direct labor hours for the year.
Answer:
The predetermined overhead rate is calculated by dividing total estimated overhead costs by total estimated direct labor hours = $61,500 / 4,100 labor hours = $15 per direct labor hourstotal overhead rate for job 102 = 72 direct labor hours x $15 per direct labor hours = $1,080total overhead rate for job 101 = 155 direct labor hours x $15 per direct labor hours = $2,325.Andy and Marjorie have very little will power when it comes to spending. They want to put their savings in an instrument that cannot be accessed by their ATM card. Which instrument would meet this criterion?
Answer:
Money market mutual fund
Explanation:
Money market mutual fund is a fund that usually invest in short term securities, for example treasury bills.
Members are paid dividends at predetermined intervals. They provide a stable savings option.
This will be a perfect way for Andy and Marjorie to save their money, and they will not have access to it via their ATM card.
In the 1850s the French franc was valued by both gold and silver, under the official French ratio which equated a gold franc to a silver franc 15½ times as heavy. At the same time, the gold from newly discovered mines in California poured into the market, depressing the value of gold. As a result, A. the franc effectively became a silver currency.B. the franc effectively became a gold currency.C. silver became overvalued under the French official ratio.D. answers a) and c) are correct
Answer:
B) the franc effectively became a gold currency.
Explanation:
Before the price of gold plummeted, the French government could rely on bimetallism, but as the price of gold decreased and the value of silver remained the same, all you needed to do to earn some money was change your gold coins into silver coins (arbitrage). So the French government decided that it couldn't rely on the value of two different metals and chose gold.
Final answer:
The influx of gold in the 1850s decreased its value, making the French franc effectively a silver currency and overvaluing silver under the official ratio; hence, answers A and C are both correct.
Explanation:
In the 1850s, as gold became more abundant and therefore less valuable due to the influx from mines in California, it led to changes in the balance between gold and silver as forms of currency. As gold depreciated, it became more profitable to mint silver coins rather than gold, which led to silver becoming the de facto currency despite both being legal tender. The French franc, which had an official ratio of 1 gold franc to 15.5 times as heavy in silver francs, became predominantly a silver currency because silver maintained its value better than gold did.
Therefore, the correct answer to the question of what happened to the French franc in the 1850s when the value of gold decreased is: A. the franc effectively became a silver currency and C. silver became overvalued under the French official ratio. This indicates that D. answers a) and c) are correct.
What is the present value of a perpetuity that makes annual payments of $10,000 at 4% compounded annually? (round your answer to the nearest dollar)
Answer:
Present Value of Perpetuity is $25,000
Explanation:
Cash flow = $10,000
Interest rate / Yield = 4%
Present Value of Perpetuity = Cash flows / interest Rate or Yield
Present Value of Perpetuity = $10,000 / 4%
Present Value of Perpetuity = $10,000 / 0.04
Present Value of Perpetuity = $25,000
The present value of a perpetuity making annual payments of $10,000 at a 4% interest rate is $250,000.
Explanation:The present value of a perpetuity can be calculated by the formula: Present Value = Payment / Interest Rate. A perpetuity is an endless series of equal payments at regular intervals, and the interest rate is compounded annually. So, in your case, the payment is $10,000 and the interest rate is 0.04 (or 4%).
To calculate the present value, we simply divide the payment by the interest rate. So, we have: Present Value = $10,000 / 0.04. When we perform this calculation, we find the present value of the perpetuity to be $250,000 when rounded to the nearest dollar.
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Phosfranc Inc., is expecting the following cash flows starting at the end of the year—$133,245, $152,709, $161,554, and $200,760. If their opportunity cost of capital is 9.4 percent, find the future value of these cash flows. (Round to the nearest dollar.)
Answer:
$734,730.52
Explanation:
We know that
Future value = Present value × (1 + rate)^number of years
So for first year, the future value is
= $133,245 × (1 + 9.4%)^3
= $133,245 × 1.309338584
= $174,462.82
For second year, the future value is
= $152,709 × (1 + 9.4%)^2
= $152,709 × 1.196836
= $182,767.63
For third year, the future value is
= $161,554 × (1 + 9.4%)^1
= $161,554 × 1.094
= $176,740.08
For fourth year, the future value is
= $200,760 × (1 + 9.4%)^0
= $200,760 × 1
= $200,760
Total value is
= $174,462.82 + $182,767.63 + $176,740.08 + $200,760
= $734,730.52
Final answer:
To calculate the future value of Phosfranc Inc.'s cash flows, the future value formula is applied to each cash flow for the respective year and then summed up to find the total, which is rounded to the nearest dollar.
Explanation:
To calculate the future value of the cash flows for Phosfranc Inc., given an opportunity cost of capital of 9.4%, we will use the future value formula for each cash flow individually and then sum them up. The formula to calculate the future value is Future Value = Cash Flow × (1 + interest rate)number of years.
For the first cash flow of $133,245 at the end of year 1: Future Value = $133,245 × [tex](1 + 0.094)^3[/tex]For the second cash flow of $152,709 at the end of year 2: Future Value = $152,709 × [tex](1 + 0.094)^2[/tex]For the third cash flow of $161,554 at the end of year 3: Future Value = $161,554 × [tex](1 + 0.094)^1[/tex]For the fourth cash flow of $200,760 at the end of year 4: Future Value = $200,760 × [tex](1 + 0.094)^0[/tex]After calculating the future value for each cash flow, we add them up to find the total future value, which is rounded to the nearest dollar as required.