BUSINESS COLLEGE

A trustworthy friend asks to borrow money from you today. She promises to pay you exactly $3500 in 2 years, and she insists on your earning the same interest rate on your loan to her as you would have earned keeping your money in your savings account that earns 2%. How much can you lend her today

Answers

Answer 1
Answer:

Answer:

I can lend her $3364 today

Explanation:

A = P(1 + r)^n

A = $3500

r = 2% = 2/100 = 0.02

n = 2 years

3500 = P(1 + 0.02)^2

3500 = P(1.02)^2

P = 3500/1.0404 = $3364 (to the nearest whole number)

Related Questions

Which of the following assumptions is likely to be met in the real world? Group of answer choices All labor has zero costs of mobility. Demand for labor is identical in every labor market. All labor is homogeneous. Nonpecuniary factors in each job are not the same.
By the end of December, Jackson Company has completed work of $2,000. Jackson company has neither billed the clients nor recorded any of the revenue. If the appropriate adjusting entry is not made at the end of the year, what will be the effect on: (a) Income statement accounts (overstated, understated, or no effect)? (b) Net income (overstated, understated, or no effect)? (c) Balance sheet accounts (overstated, understated, or no effect)?
On December 1, 2018, ABC signed a $300,000, 5%, six-month note payable with the amount borrowed plus accrued interest due six months later on June 1, 2019. ABC records the appropriate adjusting entry for the note on December 31, 2018. What amount of cash will be needed to pay back the note payable plus any accrued interest on June 1, 2019?
Depreciation, in accounting, is a process that results in: Multiple Choice an accurate measurement of the economic usefulness of an asset. depreciable assets being reported in the balance sheet at their fair value. accumulating cash for the replacement of the asset.
The Organization for the Promotion of Brussels Sprouts has convinced the government of Ironia to institute a price floor on the sale of Brussels sprouts, at $8 per bushel. Demand is given by:P = 9 – Qand supply by:P = 2Q,where Q is measured in thousands of bushels.(a) At market equilibrium, the price is $________ per bushel, and the equilibrium quantity is_______ thousand bushels.(b) With the price floor, the price is $_________ per bushel, and the quantity sold is________ thousand bushels.

Two methods can be used to produce expansion anchors. Method A costs $65,000 initially and will have a $18,000 salvage value after 3 years. The operating cost with this method will be $28,000 in year 1, increasing by $3600 each year. Method B will have a first cost of $108,000, an operating cost of $8000 in year 1, increasing by $8000 each year, and a $38,000 salvage value after its 3-year life. At an interest rate of 8% per year, which method should be used on the basis of a present worth analysis

Answers

Answer:

Method B should be used

Explanation:

Note: See the attached excel file for the calculation of the present worth of Method A and Method B.

From the attached excel file, we have:

Present worth of Method A = –$210,889.85

Present worth of Method B = –$118,011.18

Since the present worth of Method A and B above imply Method A costs more than Method B, Method B should be used.

Dudley is a manager at the SuperCuts franchise. He has had to fire two employees because they were treating walk-in customers with disdain and thus turning away business. Once those employees were gone, he trained new employees on how to greet customers. Business has been improving and he has realized how important personnel are for a retail business. What role do the personnel play at his SuperCuts franchise?

Answers

Answer:

they are the interface between the brand and the customer

Explanation:

Based on the information provided within the question it can be said that the personnel in SuperCuts are the interface between the brand and the customer. The personnel are the ones that interact on a daily basis with the shoppers and provide all the information that they need regarding the SuperCut's brand in order to generate sales.

What is the present value of a $500 payment received at the end of each of the next five years, worth to you today at the appropriate discount rate of 6 percent? $1,105 $1,850 $2,106 $2,778

Answers

Answer:

PV= $2,106.18

Explanation:

Giving the following information:

Annual payment= $500

Number of periods= 5 years

Interest rate= 6%

To calculate the present value, first, we need to determine the future value:

FV= {A*[(1+i)^n-1]}/i

A= annual payment

FV= {500*[(1.06^5) - 1]} / 0.06

FV= $2,818.55

Now, the present value:

PV= FV/(1+i)^n

PV= 2,818.55/1.06^5

PV= $2,106.18

Final answer:

The present value of a $500 payment received at the end of each of the next five years at an appropriate discount rate of 6 percent is approximately $2,106.

Explanation:

The question you asked involves the concept of calculating the present value of a series of future payments, also known as an annuity. The present value of an annuity can be determined using the formula:

PV = PMT * [(1 - (1 + r)^-n)/r]

where 'PV' is the present value, 'PMT' is the periodic payment, 'r' is the discount rate (as a decimal), and 'n' is the number of periods.

Plugging in the values from your question we get:

PV = 500 * [(1 - (1 + 0.06)^-5) /0.06]

This will give us the present value of the cash flows. Thus, the present value for a $500 payment received at the end of each of the next five years, worth to you today at the appropriate discount rate of 6 percent is $2,106.

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A company has improved its production process. Under the old process, 16 workers could produce 4,892 units per hours and the materials cost $53 per unit of output. Workers are paid $15 per hour and the finished product is sold for $112 per unit. After the improvement, materials costs have been reduced by $13 per unit of output and it now takes 2 fewer workers to make the same amount of output. What is the percentage change in multifactor productivity? (do not use a % sign, e.g. enter 50% as .5)

Answers

Answer:

32.5%

Explanation:

multi-factor productivity = total output / (labor + materials + overhead costs)

old multi-factor productivity = $547,904 / ($240 + $259,276 + $0) = 2.111

new multi-factor productivity = $547,904 / ($210 + $195,680 + $0) = 2.797

the percentage change in multi-factor productivity = [(2.797 - 2.111) / 2.111] x 100 = 32.5%

According to Duffy-Deno (2003), when the price of broadband access capacity (the amount of information one can send over an Internet connection) increases 10%, commercial customers buy about 3.8% less capacity. What is the elasticity of demand for broadband access capacity for firms? Is demand at the current price inelastic?

Answers

Answer:

-Price elasticity of demand (PED )= 0.38

-The PED is less than one, therefore the demand is price inelastic.

Explanation:

Price elasticity of demand (PED) is the degree of responsiveness of quantity demanded to a unit change in the price of the product all other things being equal. This index measures the corresponding magnitude  by which quantity demand will increase, for example, if the price reduces by a given %.

Price elasticity of demand Index is interpreted as follows:

if PED greater than 1, product is elastic

if PED less that 1, product is inelastic

PED is very useful in pricing policy. For example, a product that is price elastic will accrue more revenue if the seller reduces its price and vice versa

The price elasticity of demand for a product can be computed as follows:

PED = % change in qty DD/ % change in price

So we can compute the PED for Duffy-Deno as follows:

   PED    =  3.8%/10%    

The PED is less than one, therefore the demand is price inelastic.

Final answer:

The elasticity of demand for broadband access capacity for firms is -0.38. Because the absolute value is less than 1, the demand is considered inelastic.

Explanation:

Elasticity of demand is calculated as the percentage change in quantity demanded divided by the percentage change in price. Here, the price of broadband access increased by 10% and the quantity demanded decreased by 3.8%. This gives an elasticity of -3.8% / 10% = -0.38. Demand is considered inelastic if the absolute value is less than 1. Hence, the demand for broadband access capacity for firms is inelastic.

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A registered representative wishes to give a speech to a group of 35 potential retail clients at a restaurant. The speech is scripted and is a general discussion about investing in securities. Which statement is TRUE?

Answers

Answer:

Prior principal approval must be obtained and a copy of the speech must be retained in your firm's Office of Supervisory Jurisdiction

Explanation:

Because the speech is to be givento 35 attendees, it is under the Retail Communication. Every speech should be honest and of good taste; and the speech must be informational, but far from promotional.

It is not required that the speech content has to be pre-filed with the SEC. A copy must be kept a period of f 3 years for inspection by FINRA examiners. The speech script would be kept on file in the firm's supervisory compliance office that is the Office of Supervisory Jurisdiction.
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