If the stock market was perfectly, efficient, which of the following would be true?

Older individuals benefit in wealth accumulation.

Explanation:

Generally, older adults possess more financial resources because:

1. They typically have longer career spans, which leads to better salary opportunities and job positions.

2. They have had an extended timeframe to save and invest their resources.

Individuals in older age categories typically find it easier to amass wealth during their working years. Conversely, young professionals starting their careers often struggle to gather significant wealth.

Response:

a) $639,610.76

b) $422,923.12

c) $0.00

d) $875,351.49

Clarification:

a) What deposit amount should she make today?

To determine this, we utilize the formula for calculating the present value of an ordinary annuity as follows:

PV = P × [{1 - [1 ÷ (1+r)]^n} ÷ r] …………………………………. (1)

Where;

PV = Amount to be deposited today =?

P = annual withdrawal = $95,000

r = interest rate = 4% = 0.04

n = total years = 8

Substituting the values into equation (1) provides:

PV = $95,000 × [{1 - [1 ÷ (1 + 0.04)]^8} ÷ 0.04]

PV = $95,000 × 6.73274487495041

PV = $639,610.76

Thus, she needs to deposit approximately $639,610.76 today.

b) What will the account balance be right after the third $95,000 withdrawal?

Note: Refer to Part A from the attached Excel document for this calculation.

This will show the ending balance at Year 3, which indicates $422,923.12.

c) What will the account balance be after all withdrawals, including the last one in 8 years?

Note: Also refer to Part A from the attached Excel document for this calculation.

The result will be the final balance at Year 8, showing $0.00.

d) Now, if you opt to drop out of school today and forgo all withdrawals while retaining your aunt’s deposit in the account accruing at 4.00%, what would your total be at the end of 8 years?

Note: See Part B from the attached Excel document for this calculation.

The total will be the closing balance at Year 8, which indicates $875,351.49.

The substantial amount arises because no withdrawals are made each year, allowing the principal to accumulate interest annually on the final balance.

Net income or (Loss) = $43,128. The provided information states that: Elegant Decor Company Forecasted annual income statement Under the strategy to eliminate Department 200 Sales = $437,000 Cost of goods sold = $261,000 Gross profit = $176,000 Operating expenses Direct expenses: Advertising = $15,500 Store supplies utilized = $4,500 Depreciation of Store Equipment = $4,200 Total Direct Expense = $24,200 Allocated Expenses: Sales Salaries = $64,000 ($104,000-2×$24,200+($31,200÷2) = $40,000) (104,000-$40,000) Rental Expenses = $14,180 Bad debt expense = $9,400 Office salary = $15,600 ($31,200 - ($31,200 ÷ 2)) Insurance expense = $1,724 ($2,200 - $476) Miscellaneous expense = $3,728 ($4,000 - $272) Total Allocated Expenses = $108,632 Total Expense = $132,872 ($108,632 + $24,200) Net income or (Loss) = $43,128 ($176,000 - $132,872)

This scenario exemplifies Agency conflict. It occurs when someone has the authority to make decisions on behalf of an entire organization. In this case, shareholders support an acquisition offer while the board of directors chooses to decline it.

Answer:

c and m

Explanation:

Considering the provided information,

Consumption function: C = CC + cY

Investment function: I = mr

where,

Y indicates total income

r represents the interest rate

The equation describing the IS curve can be stated as:

Y = C + I

Y = CC + cY + mr

Y - cY = CC + mr

(1 - c)Y = CC + mr

(1 - c)Y - CC = mr

The slope of the IS curve is determined by differentiating 'r' with respect to 'Y',

Thus, the slope is contingent upon the variables c and m.