Lauren's salary decreases from $34,000 to $30,000. She decides to reduce the number of outfits she purchases each year from 20 t

Answer:

The present value of the cash flow, discounted at a 5% annual rate, is $76,815.65.

Explanation:

First, we calculate the present value of a $15,000 annuity over 4 years:

C 15,000.00

Time 4

Rate 0.05

PV $53,189.2576

Next, we discount two additional years as a lump sum, corresponding to two years following the investment:

 

Maturity  53,189.26

Time  2.00

Rate  0.05000

 

PV   48,244.2245

Adding them results in the present value:

48,244.22 + 28,571.43 =  76,815.65  

Answer:

Both divisions are showing equal performance with an ROI of 14%.

Explanation:

The financial figures given have been organized as follows:

                                      Consumer ($)            Commercial ($)

Sales revenue                         22,000                    37,000

Divisional income                       3,850                     3,885

Divisional investment                27,500                   27,750

Current liabilities                      1,000                     800

R&D                                          1,000                   1,000

The resulting calculations are as follows:

Divisional ROI = Divisional income / Divisional investment

Consumer division ROI = $3,850 / $27,500 = 0.1400, or 14%

Commercial division ROI = $3,885 / $27,750 = 0.1400, or 14%

This illustrates that investment returns are equal at 14% for both divisions.

Answer: Nominal

Explanation:

The use of the Nominal measurement scale indicates that data is categorized into specific names or labels, which is the reason it is sometimes called Named data. For example, organizing dogs in a park by their breed such as Husky, American Bull, German Shepherd, etc.

This measurement scale does not involve numerical values and typically lacks any hierarchical arrangement.

In this case, the professor categorized her students based on their majors, with those majors serving as labels. Thus, she applied the Nominal measurement scale.

Answer:

To begin with, we require a discount rate; in researching similar questions, I found that the discount rates ranged from 4% to 8%, so I opted for 6%.

The company has two options: continue operating in a competitive market or reduce its prices to eliminate competition.

Utilizing the perpetuity formula, the present value for the first option is calculated as follows: = $10,000,000 / 0.06 = $166,666,667

For the second option, the present value is:

PV of price reduction = $1,000,000,000 / 1.06 = $943,396,226 plus the present value of future net income

The present value of future net income = $50,000,000 / 0.06 = $833,333,333, but this figure must be discounted as the terminal value relates to the end of the current year, not now: $833,333,333 / 1.06 = $786,163,552

Consequently, the NPV associated with lowering prices is $786,163,552 - $943,396,226 = -$157,232,674, indicating this is certainly not a favorable plan.

Bond assessment:
<span>Face value = Maturity value = FV = $1,000 </span>
<span>Annual coupon rate = 7.5% </span>
<span>Remaining years to maturity = N = 19 </span>
<span>Required return = I/YR = 5.5% </span>
<span>(Coupon rate)(Face value) = PMT = $75 </span>
<span>Present value = $1,232.15</span>