A loan of 1000 is taken out at an annual effective interest rate of 5%. The loan will be repaid using the Sinking Fund Method. That is, level annual interest payments are made at the end of each year for 10 years, and the principal amount for the loan is repaid at the end of 10 years by making equal size payments into the fund at the end of each year for 10 years. If the sinking fund earns an annual effective interest rate of 4%, then find the difference between the interest payment on the loan and the interest earned by the sinking fund in the fifth year. Round your answer to the nearest whole number.

Answers

Answer 1

Answer:

Interest paid each year = 5% of 1000 = $50

$1000 is to be paid at the end of 10 years.So payment each year = pmt(rate,nper,pv,fv) where rate = 0.04,nper=10 and fv =1000.

Payment into the fund =pmt(0.04,10,0,1000) = $83.29 each year

Value of the sinking fund at the end of the 4th year =pv(rate,nper.pmt) =pv(0.04,4,83.29) = 302.34

Interest earned by sinking fund in year 5 = 0.04*302.34 = 12.09

Interest on loan in 5th year = $50

So difference between the interest payment on the loan and the interest earned by the sinking fund in the fifth year. = 50-12.09 = 37.91 = $38 (to nearest whole number)

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Which of the following statements are inconsistent with the efficient market hypothesis?a. The average annual return on stocks is greater than zero. b. Stocks that outperform the index in March always underperform it in April. c. Half of fund managers are able to beat their relevant index each year, before fees. d. Stocks that outperform the index in March always outperform it in April.

Answers

Answer:

b. Stocks that outperform the index in March always underperform it in April.

d. Stocks that outperform the index in March always outperform it in April.

Explanation:

The Efficient market hypothesis states that in an efficient market, all the available information in the market are reflected in the prices of the stocks being traded. As such, all stock are fairly priced.

Stocks that perform in a certain way in March and then in another way in April are violations of the hypothesis. This is because if indeed the market was efficient, the prices would adjust to reflect the different performances by month such that there would be no more fluctuations.

Top managers at kendrick construction want to increase the percentages of minorities and women in its ranks. the company began an active recruitment program with a local university and a special career development program. kendrick has started a(n ______ plan.

Answers

The answer is: "affirmative action" [plan] .
__________________________________________

The profit margin ratio is the only ratio that makes up ROE that can be negative (except in relatively rare cases). Describe how the interpretation of the Asset Turnover Ratio and the Financial Leverage Ratio change based on whether the Profit Margin Ratio is positive or negative.

Answers

Except under very exceptional circumstances, the only ratio that makes up ROE that can be negative is the profit margin ratio. As a result, the asset turnover ratio continues to be positive and shows the amount of sales produced for each dollar of assets owned by the organization.

What is profit margin ?

One of the often used profitability statistics to determine how profitable a business or line of business is is profit margin. It displays the proportion of sales that have generated profits. Simply put, the percentage value represents the amount of profit the company made on each dollar of sales. For instance, if a company states that it had a 35% profit margin during the most recent quarter.

Different profit margins come in different forms. However, in common usage, it typically refers to net profit margin, which is a company's bottom line after all other costs, such as taxes and one-time charges, have been deducted from revenue.

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Explanation:

The profit margin ratio is the only ratio that makes up ROE that can be negative (except in relatively rare cases). ... Therefore, Asset turnover ratio still represents the amount of sales that is generated for each dollar of assets the company owns and always is positive.

Medallion Cooling Systems, Inc., has total assets of $10,000,000, EBIT of $2,000,000, and preferred dividends of $200,000 and is taxed at a rate of 40%. In an effort to determine the optimal capital structure, the firm has assembled data on the cost of debt, the number of shares of common stock for various levels of indebtedness, and the overall required return on investment:,a. Calculate earnings per share for each level of indebtedness.,

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c. Choose the optimal capital structure. Justify your choice

Answers

Answer:

Explanation:

The two attached pictures shows the explanation for this problem. I hope it help you. Thank you

Which of the following would help reduce the amount of frictional unemployment? Choose one or more: (A) Websites that advertise job openings across the country
(B) government policies to help promote a stagnant economy
(C) providing tax breaks to firms that engage in technological innovations
(D) interviewing a wide variety of candidates to ensure a diverse workforce
(E) government policies to limit outsourcing of jobs

Answers

Answer: Option A

Explanation: In simple words, it refers to the unemployment which occurs due to the employees shifting and moving from one job to another. This kind of unemployment is unavoidable and exist in every economy to some extent.

A website that advertises job will be helpful to employees for gaining information and awareness about new openings.

Hence from the above we can conclude that the correct option A.

Final answer:

Frictional unemployment could be reduced by enhancing job visibility, promoting economic growth, and limiting outsourcing. The best options for this are advertising job openings widely, implementing government policies to promote a stagnant economy, and creating policies to limit job outsourcing.

Explanation:

Frictional unemployment refers to the period of time when a worker is searching for, or transitioning from one job to another. It's a natural form of unemployment due to factors like workers' voluntary decisions to change jobs or the time lag involved in finding a new job.

Options (A) Websites that advertise job openings across the country, (B) Government policies to help promote a stagnant economy, and (E) Government policies to limit outsourcing of jobs would help reduce the amount of frictional unemployment. (A) would increase the visibility of job opportunities, enabling job seekers to find new roles more quickly. (B) would stimulate economic growth, creating more job opportunities. (E) would keep jobs within the country, increasing local employment opportunities.

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During 2018, Colorado Company stock was sold for $9,400. The fair value of the stock on December 31, 2018, was Clemson Corp. stock—$19,100; Buffaloes Co. stock—$20,500. None of the equity investments result in significant influence. (a) Prepare the adjusting journal entry needed on December 31, 2017. (b) Prepare the journal entry to record the sale of the Colorado Co. stock during 2018. (c) Prepare the adjusting journal entry needed on December 31, 2018.

Answers

Explanation:

The journal entries are as follows

a. Unrealized Holding Gain or Loss Dr $1,310

To Fair value Adjustment $1,310

(Being the unrealized gain or loss is recorded)

2. Cash $9,410

Loss on Sale of Investment $490 ($9,900 - $9,410)

To Equity Investment $9,900

(Being the sale of the stock is recorded)

3. Fair value Adjustment $1,020

To Unrealized Holding Gain or Loss $1,020

(Being the fair value adjustment is recorded)

The computation is shown below:

Stock Cost Fair Value Unrealized Gain(Loss)

Clemson Corp. Stock $20,200 $19,410 -$790

Buffaloes Co. stock $20,200 $20,700 $500

Net unrealized gain (loss) -$290

2017 -$1,310

Fair value adjustment -$1,020

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