Kirby just inherited $250,000. He would like to hire a financial advisor to provide financial advice and to manage the inheritance. Kirby has interviewed two potential advisors. The first person indicated that he would not charge for his advice but would charge a 4.50% commission on any mutual funds purchased when managing the $250,000. The second person indicated that she would charge $2,500 to write a financial plan and 1% of any asset she manages. Which advisor should Kirby choose if he wants the $250,000 managed and is interested in minimizing his upfront expenses?A. The first advisor because there is no planning fee.
B. The second advisor because the total first-year cost is $5,000.
C. The first advisor because the total first-year cost is $5,000.
D. Because the cost is approximately the same, either advisor could be selected.

Answers

Answer 1

Answer:

Answer:

The answer is A.

Explanation:

According to the details given in the question on the two financial advisor's approach, the first advisor does not request a payment but a commission on the funds purchased with the inheritance money. The second advisor does request payment for the job and also a share on the assets managed with the inheritance money.

If Kirby wants to minimize the upfront expenses which can be described as the sum that is paid before a service or a job is done, then the first advisor is the better option. So the answer is A.

I hope this answer helps.

Related Questions

The Penguin intentionally hits Batman with his umbrella. Batman, stunned by the blow, falls backward, knocking Robin down. Robin’s leg is broken in the fall, and he cries out, "Holy broken bat bones! My leg is broken." Who, if anyone, has liability to Robin? Why?
Parker Plastic, Inc., manufactures plastic mats to use with rolling office chairs. Its standard cost information for last year follows: Standard Quantity Standard Price (Rate) Standard Unit Cost Direct materials (plastic) 12 sq ft. $ 0.83 per sq. ft. $ 9.96 Direct labor 0.25 hr. $ 10.50 per hr. 2.62 Variable manufacturing overhead (based on direct labor hours) 0.25 hr. $ 2.20 per hr. 0.55 Fixed manufacturing overhead $345,800 ÷ 910,000 units) 0.38 Parker Plastic had the following actual results for the past year: Number of units produced and sold 1,040,000 Number of square feet of plastic used 11,400,000 Cost of plastic purchased and used $ 9,120,000 Number of labor hours worked 308,000 Direct labor cost $ 3,449,600 Variable overhead cost $ 689,000 Fixed overhead cost $ 365,000 Required: Calculate Parker Plastic’s direct materials price and quantity variances. (Do not round intermediate calculations. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance).)
The period before the trial takes place is called the
Explain how a consumer’s place of residence has an especially large impact on their purchase of sports and entertainment commodities.
Scott turner has a bond with 10 years to maturity, a face value of $1,000, an 8% interest rate, and a market price of $800. what is the yield-to-maturity on this bond?

Ash is the preferred wood to be used in the production of baseball bats. If a company was to buy the rights to harvesting the ash trees out of all the forests in North America, which of the following barriers of entry has this company created? A. problems raising capital
B. patents and copyright law
C. control of resources
D. economies of scale
E. licensing

Answers

Answer:

C. control of resources

When a parent uses the equity method throughout the year to account for its investment in an acquired subsidiary, which of the following statements is false before making adjustments on the consolidated worksheet? A. Parent company net income equals controlling interest in consolidated net income.
B. Parent company retained earnings equals consolidated retained earnings.
C. Parent company total assets equals consolidated total assets.
D. Parent company dividends equals consolidated dividends.
E. Goodwill will not be recorded on the parent's books.

Answers

Answer: The correct answer is "C. Parent company total assets equals consolidated total assets".

Explanation: The statement "C. Parent company total assets equals consolidated total assets" is false before making adjustments on the consolidated worksheet when a parent uses the equity method because the parent company total assets are not equal to consolidated total assets.

In January, 2006, Findley Corporation purchased a patent for a new consumer product for $720,000. At the time of purchase, the patent was valid for fifteen years. Due to the competitive nature of the product, however, the patent was estimated to have a useful life of only ten years. During 2011 the product was permanently removed from the market under governmental order because of a potential health hazard present in the product. What amount should Findley charge to expense during 2011, assuming amortization is recorded at the end of each year?a. $480,000.
b. $360,000.
c. $72,000.
d. $48,000.

Answers

Answer:

b. $360,000.

Explanation:

Data provided in the question

Purchase value of the patent = $720,000

At the time of purchase, the patent life is 15 years

And, the useful life of the patent is 10 years

So, the amortization expense recorded value is

= $720,000 ÷ 10 years × 5 years

= $360,000

The five years is counted from the year 2006 to the year 2011

A project will not produce any cash flows for two years. Starting in the third year, it will produce annual cash flows of $11,900 a year for two years. The project initially costs $43,600. In Year 6, the project will be closed and as a result should produce a final cash inflow of $50,500. What is the net present value of this project if the required rate of return is 8.7 percent?

Answers

Answer:

The NPV of the project at 8.7 percent will be 4,802.58‬

Explanation:

We will calcualte the present value of the cash inflow:

$(Inflow)/((1 + rate)^(time) ) = PV$

year 3:

Inflow 11,900.00

time 3.00

rate 0.087

$(11900)/((1 + 0.087)^(3) ) = PV$

PV 9,265.28

Year 4:

Inflow 11,900.00

time 4.00

rate 0.087

$(11900)/((1 + 0.087)^(4) ) = PV$

PV 8,523.71

Year 6:

Inflow 50,500.00

time 6.00

rate 0.087

$(50500)/((1 + 0.087)^(6) ) = PV$

PV 30,613.58

Then, we will add them together and subtract the investment amount

NPV: 30,613.59 + 8,523.71 + 9,265.28 - 43,600 = 4,802.58‬

Harris Company manufactures and sells a single product. A partially completed schedule of the company’s total costs and costs per unit over the relevant range of 64,000 to 104,000 units is given below: Required: 1. Complete the schedule of the company’s total costs and costs per unit as given in the relevant tab below. 2. Assume that the company produces and sells 94,000 units during the year at a selling price of $7.99 per unit. Prepare a contribution format income statement for the year.

Answers

Answer:

Instructions are lsited below

Explanation:

We don't have enough information to resolve with numbers. But I will leave the formulas necessary to resolve.

The general structure of an income statement proceeds as follow:

Revenue/Sales (+)

Cost of Goods Sold (COGS) (-)

=Gross Profit

Marketing, Advertising, and Promotion Expenses (-)

General and Administrative (G&A) Expenses (-)

=EBITDA

Depreciation & Amortization Expense (-)

=Operating Income or EBIT

Interest (-)

Other Expenses (-)

=EBT (Pre-Tax Income)

Income Taxes (-)

=Net Income

A Contribution Margin Income Statement is a special format of the income statement that segregates the variable and fixed expenses involved in running a business. It shows the revenue generated after deducting all variable and fixed expenses separately.

Sales=

Variable costs:

Cost of good sold=

Sales commissions=

Shipping expense=

Total variable cost=

Contribution margin=

Fixed costs:

Advertising expense=

Shipping expense=

Administrative salaries=

Insurance expense=

Depreciation expense=

Total fixed cost=

Net profit=

"A cleaning company uses $10 of chemicals, $40 of labor, and $5 of misc. expenses for each house it cleans. After some quality complaints, the company has decided to increase its use of chemicals by 50%. By what percentage has multifactor productivity fallen?