Answer:
Ans. The expected rate of return on the Inferior Goods Co. stock is 5.90%
Explanation:
Hi, you just have to multiply the expected earnings by the probability of occurance of a certain event and then add up all the products. Here is the information all organized to be processed.
Item Prob Earn
Booming 20% -6%
Normal 55% 7%
Recession 25% 13%
Ok, now let´s calculate the expected rate of return.
So the expected rate of return of the stock is 5.90%
Best of luck.
First, you have to calculate the amount of tuition when the student reaches age 18. Do this by multiplying $11,000 by 1.07 each year from age 12 until it reaches age 18. Thus, 7 times.
At age 18: 16,508
At age 19: 17,664
At age 20: 18,900
At age 21: 20,223
Then, we use this formula:
A = F { i/{[(1+i)^n] - 1}}
where A is the monthly deposit each year, F is the half amount of the tuition each year illustrated in the first part of this solution, n is the number of years lapsed.
At age 18:
A = (16508/2) { 0.04/{[(1+0.04)^6] - 1}} = $1,244.389 deposit for the 1st year
Ate age 19
A = (17664/2) { 0.04/{[(1+0.04)^7] = $1,118 deposit for the 2nd year
At age 20:
A = (18900/2) { 0.04/{[(1+0.04)^8] = $1,025 deposit for the 3rd year
At age 21:
A = (18900/2) { 0.04/{[(1+0.04)^8] = $955 deposit for the 4th year
Answer: 97.99
Explanation:
The one-year forward rate that an investor would be indifferent between the U.S. and Japanese investments will be:
= Spot rate × (1 + Japanese rate / 1 + U.S rate)
= 101 × (1 + 1% / 1 + 4.1%)
= 101 × [(1 + 0.01) / (1 + 0.041)]
= 101 × (1.01/1.041)
= 101 × 0.9702209
= 97.99
Answer:
The correct answer is C.
Explanation:
Giving the following information:
Selling price per unit $210.00
Variable expense per unit $92.40
Fixed Expense per month $130,536
To calculate the break-even point in units, we need to use the following formula:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 130,536/ (210 - 92.4)
Break-even point in units= 1,110 units
