Answer: Please find answers below
Explanation:
The Order of liquidity shows how assets of a company are presented in a balance sheet in an order that shows the faster the time taken for an asset to be converted to Cash.
The order in which Current accounts are represented as as follows
--- Cash (including currency, checking accounts, and petty cash),
----Short-term investments ,
----Accounts receivable,
---- Inventory,
-----Supplies,
----- Pre-paid expenses.
Current Assets of Splish Brothers Inc. in order of liquidity
Current Assets Amount
Cash $22,360
Debt investments(short term) $17,630
Accounts receivables $30,100
Supplies $8,170
Prepaid Insurance $5,590
Total Current Accounts $83,850
Delta Corporation has a higher times interest earned ratio than Gamma Corporation. From this information, we can assume that Delta is relatively better able to meet its interest payments.
a. True
b. False
Answer: True
Explanation:
The times interest earned ratio indicates how a company will be able to meet its debts obligations which is based on the current income of the company.
Since Delta Corporation has a higher times interest earned ratio than Gamma Corporation, it means that Delta is relatively better able to meet its interest payments.
Delta in its effective terms means the measurement of the rate of change in the premium whereas the gamma is meant as the measure of the movement of the risk. Delta is linked with the ranges of 0 and 1 and gamma is linked with the range of long and short-run in the market.
The correct answer is True
The time's interest earned ratio indicates how a company will be able to meet its debts obligations which are based on the current income of the company.
Since Delta Corporation has a higher times interest earned ratio than Gamma Corporation, it means that Delta is relatively better able to meet its interest payments.
To know more about the delta and gamma, refer to the link below:
https://brainly.com/question/3645138
Suppose the tax rate on nominal interest income is 20% and does not change over time. Also assume the real interest rate remains constant. In year 1, the inflation rate is 4% and the nominal interest rate is 10%. In year 2, the inflation rate is 14% The real interest rate in both years is 16 The nominal interest rate in year 2 is 20 The after-tax nominal interest rate in year 1 is 7.
a. The after-tax nominal interest rate in year 2 is __________
b. The after-tax real interest rate in year 1 is ______________
c. The after-tax real interest rate in year 2 is ______________
Answer:
a. The after-tax nominal interest rate in year 2 is __________
after tax nominal interest rate = 20% x (1 - tax rate ) = 20% x 0.8 = 16%
b. The after-tax real interest rate in year 1 is ______________
after tax real interest rate = [(1 + after tax nominal interest rate) / (1 + inflation rate)] - 1
after tax nominal interest rate yer 1 = 10% x 0.8 = 8%
inflation rate = 4%
after tax real interest rate = [1.08 / 1.04] - 1 = 3.85%
c. The after-tax real interest rate in year 2 is ______________
after tax real interest rate = [(1 + after tax nominal interest rate) / (1 + inflation rate)] - 1
after tax nominal interest rate yer 1 = 16%
inflation rate = 4%
after tax real interest rate = [1.16 / 1.14] - 1 = 1.75%
Explanation:
year 1
inflation rate 4%
nominal interest rate 10%
real interest rate 6%
year 2
inflation rate 14%
nominal interest rate 20%
real interest rate 6%
You have just been instructed to develop a schedule for introducing a new product into the marketplace. Below are the elements that must appear in your schedule. Arrange these elements into a work breakdown structure (down through level 3), and then draw the arrow diagram. You may feel free to add additional topics as necessary.1. Production layout2. Market testing3. Review plant cost4. Select distributors5. Analyze selling cost6. Analyze customer reactions7. Storage and shipping cost8. Select salespeople9. Training salespeople10. Trained distributors
Answer:
Attached below is the arrangement of these elements with additional topics and arrow diagram
Explanation:
The given Elements are : Production layout , market testing , Review plant cost, select distributors, Analyze selling cost, Analyse customer reactions, storage and shipping cost, select salespeople, training sales people, trained distributors. including additional topics as well
The following data has been collected about Keller Company's stockholders' equity accounts: Common stock $10 par value 21,000 shares authorized and 10,500 shares issued, 1,100 shares outstanding $105,000 Paid-in capital in excess of par value, common stock 51,000 Retained earnings 26,000 Treasury stock 12,760 Assuming the treasury shares were all purchased at the same price, the number of shares of treasury stock is:
Answer:
9,400 shares
Explanation:
Treasury stock is the difference between issued shares and outstanding shares.
Number of treasure shares = Number of issued shares - Number of outstanding shares
Number of treasure shares = 10,500 - 1,100
Number of treasure shares = 9,400 shares
Therefore, number of treasury shares is 9,400
Moorcroft sales are 40% cash and 60% credit. Credit sales are collected 20% in the month of sale, 50% in the month following sale, and 26% in the second month following sale; 4% are uncollectible. Moorcroft purchases are 50% cash and 50% on account. Purchases on account are paid 40% in the month following the purchase and 60% in the second month following the purchase.Prepare a schedule of expected collections from customers for June.
Answer:
The budgeted sales are missing, so I looked for them. I found the following question, hopefully it will be similar:
Month Sales
April $300,000
May $320,000
June $370,000
Schedule of expected collections
For the month of June, 202x
Cash sales during June = $370,000 x 40% = $148,000
Collection from June's credit sales = $222,000 x 20% = $44,400
Collection from May's credit sales = $192,000 x 50% = $96,000
Collection from April's credit sales = $180,000 x 26% = $46,800
Total cash collections during June = $335,200
If an investor's aversion to risk increased, would the risk premium on a high beta stock increase by more or less than that of a low-beta stock? Explain.
Answer:
risk premium increases by more of the low - beta stock
A risk averse investor is an investor that avoids risk. if risk aversion increases, it means that the investor is more wary of risky investment.
Beta measures the volatility of a portfolio. the higher the volatility, the more risky the portfolio is.
risk premium measures the rate of return in excess of the risk free rate.
According to CAPM :
risk free rate + (beta x stock risk premium)
Beta is a multiplier of stock risk premium, so the higher the beta, the more there would be an increase in the stock risk premium
If a risk averse investor invests in a high beta stock, he would want extra or higher compensation for holding such a volatile stock. this extra compensation would be in the form of a higher risk premium.
Explanation:
On January 1, a company issued and sold a $300,000, 5%, 10-year bond payable, and received proceeds of $293,000. Interest is payable each June 30 and December 31. The company uses the straight-line method to amortize the discount. The carrying value of the bonds immediately after the first interest payment is:
Answer: $293,350
Explanation:
The carrying value of the bonds immediately after the first interest payment will be the addition of the received proceed and the ammortized discount. This will be:
= $293,000 + $350
= $293,350
Note that the ammortized discount was calculated as:
= ($300000 - $293000)/20
= $7000/20
= $350
Southtown Realty has entered into agency agreements with Sara, a seller and Tom, a buyer. Tom wants to make an offer on Sara’s home. Is this possible?
Answer: Yes it's possible as long as Tom and Sara gives a written consent to the dual agency arrangement.
Explanation:
From the question, we are informed that Southtown Realty has entered into agency agreements with Sara, a seller and Tom, a buyer. Tom wants to make an offer on Sara’s home.
This is possible as long as Tom and Sara gives a written consent to the dual agency arrangement.
A firm issues $300 million in straight bonds at an original issue discount of 0.50% and a coupon rate of 7%. The firm pays fees of 2.0% on the face value of the bonds. The net amount of funds that the debt issue will provide for the firm is closest to which of the following?
A)$248,625,000
B)$263,250,000
C)$277,875,000
D)$292,500,000
Answer: $292,500,000
Explanation:
The following information can be derived from the question:
Issued bond = $300
Issue discount = 0.50%
Coupon rate = 7%.
Fees paid = 2.0%
The net amount of funds that the debt issue will provide for the firm will be:
= Issued bond price - Discount - Fees paid
= $300m - ($300m × 0.50%) - ($300m × 2.0%)
= $300m - $1.5m - $6m
= $300m - $7.5m
= $292.5 Million
Consider the relative liquidity of the following assets:
Assets
1. The funds in a money market account
2. A $5 bill
3. A share in a publicly traded company
4. Your house
Select the assets in order of their liquidity, from most liquid to least liquid.
Most Liquid
Second-Most Liquid
Third-Most Liquid
Least Liquid
Answer:
Liquidity of an asset refers to how easily convertible the asset is to cash or so called liquid money.
Most Liquid - A $5 bill
This is already cash so it is the most liquid there is.
Second-Most Liquid - The funds in a money market account
Funds in a money market account are the second most liquid because most often they can simply be withdrawn from the fund. There might be limits on the number of withdrawals allowed though within a period.
Third-Most Liquid - A share in a publicly traded company
A share in a publicly trade company ranks here because to realize the cash, one would need to sell the share first.
Least Liquid - Your house
Your house will be the most difficult of these to liquidate as it will involve a much longer process to eventually get it sold and realize cash. The process will include but will not be limited to, advertising, hiring realtors, inspection etc.
Jenny Corp. needs to raise $53 million to fund a new project. The company will sell shares at a price of $29.00 in a general cash offer and the company's underwriters will charge a spread of 7.5 percent. The direct flotation costs associated with the issue are $925,000. How many shares need to be sold?
Answer:
2,010,252 Shares
Explanation:
The funds that are to be raised = $53,000,000
Spread = 7.5%
Share price = $29.00
Flotation cost with issue = 925,000
We have that:
(53000000+925000)/92.5 * 100
(539,250,000/92.5)x100
= $58297.973 x 100
= $58297297.3
The offer per share is placed at $29.00
So to get the number of shares sold:
$58297297.3 / $29.00
= 2,010,252 shares are to be sold.
Blossom Street Inc. makes unfinished bookcases that it sells for $57. Production costs are $37 variable and $10 fixed. Because it has unused capacity, Blossom Street is considering finishing the bookcases and selling them for $70. Variable finishing costs are expected to be $6 per unit with no increase in fixed costs. Prepare an analysis on a per unit basis showing whether Blossom Street should sell unfinished or finished bookcases. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
Answer and Explanation:
The Preparation of an analysis on a per unit basis is shown below:-
Particulars Sell unfinished Sell finished Increase/Decrease
bookcases bookcases in income
Sale price per
unit $57 $70 $13
Less: variable cost
per unit $37 $43 $6
($37 + $6)
Les: fixed cost per
unit $10 $10 $0
Total cost per
unit $47 $53 $6
Net income per
unit $10 $17 $7
Therefore, Unfinished bookcases are further processed, as net profit per unit increases further by processing by $7
Alexander has been accepted as a freshman at a college two hundred miles from his home for the fall semester. Alexander's wealthy uncle, Michael, decides to give Alexander a car for Christmas. In November, Michael makes a contract with Jackson Auto Sales to purchase a new car for $18,000 to be delivered to Alexander just before the Christmas holidays, in mid-December. The title to the car is to be in Alexander's name. Michael pays the full purchase price, calls Alexander and tells him about the gift, and takes off for a six-month vacation in Europe. Is Alexander an intended third party beneficiary of the contract between Michael and Jackson Auto Sales
Answer:
Yes.
Alexander is an intended third party beneficiary of the contract between Michael and Jackson Auto Sales.
Explanation:
In the law of contracts, Alexander becomes a third-party beneficiary of the contract between Michael and Jackson Auto Sales, and he has the right to sue in the contract notwithstanding that he was not an active party to the contract. Some of the factors that may be present to show that a Alexander is an intended beneficiary are: (1) the contract's performance is rendered directly to Alexander; (2) Alexander has rights to control the details of the performance; or (3) there is an express designation in the contract, e.g. the title to the car is in Alexander's name.
Suppose the firms in a perfectly competitive industry merge to form a monopoly. Which of the following would NOT occur?
a. A rise in total consumer plus producer surplus
b. A deadweight loss
c. A rise in producer surplus
d. A fall in consumer surplus
Answer: a. A rise in total consumer plus producer surplus
Explanation:
When a Monopoly is formed, the Producer surplus will increase but the Consumer surplus will decrease. This is because a Monopoly will charge a higher price than a Competitive firm to get more profit as well reduce output as well.
This will result in the transfer of some Consumer surplus to the Producer as well as a Dead-weight loss being formed thereby reducing the Consumer surplus. The total surplus will therefore fall as a result of this merger.
Suppose you invest equal amounts in a portfolio with an expected return of 16% and a standard deviation of returns of 18% and a risk-free asset with an interest rate of 4%. Calculate the expected return on the resulting portfolio. Group of answer choices
Answer: 10%
Explanation:
You invest equal amounts in a portfolio yielding 16% and a risk-free asset yielding 4%.
The expected return will be a weighted average of these two;
= (Weight of the Portfolio * Portfolio return) + (Weight of the Portfolio * risk-free rate)
= (0.5 * 16%) + (0.5 * 4%)
= 8% + 2%
= 10%
Net present value method The following data are accumulated by Geddes Company in evaluating the purchase of $160,000 of equipment, having a four-year useful life: Net Income Net Cash Flow Year 1 $43,500 $83,500 Year 2 23,000 63,000 Year 3 13,500 53,500 Year 4 6,500 46,500 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Assuming that the desired rate of return is 12%, determine the net present value for the proposal. If required, round to the nearest dollar. Net present value $ 86,500 Would management be likely to look with favor on the proposal
Answer:
A.$32,396
B. Yes
Explanation
A. Calculation to determine the net present value for the proposal
Year Net Cash Flow Present value Discounting factor at 12% Discounted Cash Flow
1 $ 83,500.00 0.893 $ 74,565.50
2 $63,000.00 0.797 $ 50,211.00
3 $ 53,500.00 0.713 $ 38,145.50
4 $ 46,500.00 0.636 $ 29,574.00
Present value of net cash flows $ 192,496.00
Amount to be invested $ 160,000.00
Net Present Value $ 32,496
Net Present Value $ 32,496/Amount to be invested $160,000.00 =0.2031*100
=20.31%
B.Yes the management would likely to look with favor on the proposal because the net present value of 20.31% is higher than the expected rate of return of 12%.
"A husband and wife wish to open an account that allows either party to trade or draw checks; and that becomes the property of the surviving spouse if one should die. The proper ownership form is:"
Answer:
Joint Tenants with Rights of Survivorship
Explanation:
The property ownership form that is being mentioned in the question is known as Joint Tenants with Rights of Survivorship . As described, this is when two individuals share equal ownership of the property and have the equal, undivided right to keep or dispose of the property. Rights of Survivorship means that if one of the individual joint tenants dies then their ownership of the property does not pass on to the next of kin but instead is passed to the other joint tenant that is the beneficiary.
Additional short-term borrowings $ 20,000
Purchase of short-term investments 5,000
Cash dividends paid 16,000
Interest paid 8,000
Compute cash flows from financing activities using the above company information. (Amounts to be deducted should be indicated by a minus sign.)
Answer:
Cash flow from from financing activities = $(4,000)
Explanation:
The cash flow from financing activities includes that entails any or a combination of the following; issuance and redemption of stocks , issuance and redemption of debts and payment of interest and/or dividend, and receipt of dividend and or interest.
Kindly note that the purchase of short term investment is not a financing activity but rather an investing activity
Cash flow $
Short term borrowing 20,000
Cash dividend paid (16,000)
Interest paid (8,000)
Total Cash flow (4000)
Cash flow from from financing activities = $(4,000)
A company uses 40000 pounds of materials for which it paid $2 a pound. The materials price variance was $20000 unfavorable. What is the standard price per pound
Answer:
Standard price= $1.5
Explanation:
Giving the following information:
A company uses 40000 pounds of materials for which it paid $2 a pound. The materials price variance was $20000 unfavorable.
To calculate the standard price, we need to use the following formula:
Direct material price variance= (standard price - actual price)*actual quantity
-20,000= (standard price - 2)*40,000
-20,000= 40,000standard price - 80,000
60,000/40,000= standard price
standard price= $1.5
A loan is being repaid by 15 annual installments of 1,000 each. Interest is at an effective annual rate of 5%. Immediately after the fifth installment is paid, the loan is renegotiated. The revised amortization schedule calls for a sixth installment of 800, a seventh installment of (800 + K), with each subsequent installment increasing by K over the previous payment. The period of the loan is not changed. Determine the revised amount of the last installment.
Answer:
the last installment = $1,239.42
Explanation:
renegotiated agreement:
year payment
1 $1,000
2 $1,000
3 $1,000
4 $1,000
5 $1,000
6 $800
7 $800 + K
8 $800 + 2K
9 $800 + 3K
10 $800 + 4K
11 $800 + 5K
12 $800 + 6K
13 $800 + 7K
14 $800 + 8K
15 $800 + 9K
we must first determine the original loan and to do that we need the PV of the original payment schedule:
PV = $1,000 x 10.380 (PV annuity factor, 5%, 15 periods) = $10,380
now we find the present value of the first 5 installments:
PV = $1,000 x 4.3295 (PV annuity factor, 5%, 5 periods) = $4,329.50
$10,380 - $4,329.50 = $6,050.50
now to find K:
$6,050.50 = $800/1.05⁶ + ($800 + K)/1.05⁷ + ($800 + 2K)/1.05⁸ + ($800 + 3K)/1.05⁹ + ($800 + 4K)/1.05¹⁰ + ($800 + 5K)/1.05¹¹ + ($800 + 6K)/1.05¹² + ($800 + 7K)/1.05¹³ + ($800 + 8K)/1.05¹⁴ + ($800 + 9K)/1.05¹⁵ = 596.97 + 568.55 + 0.71K + 541.47 + 1.35K + 515.69 + 1.93K + 491.13 + 2.46K + 467.74 + 2.92K + 445.47 + 3.34K + 424.26 + 3.71K + 404.05 + 4.04K + 384.81 + 4.33K = $4,840.14 + 24.79K
$6,050.50 = $4,840.14 + 24.79K
$6,050.50 - $4,840.14 = 24.79K
$1,210.36 = 24.79K
K = $48.82
the last installment = $800 + 9K = $800 + (9 x $48.82) = $1,239.42
A registered representative is notified verbally by the nephew of a client that his uncle has passed away. Which statements are TRUE regarding the actions that the registered representative can take based on this information?
I The account should be immediately marked as "deceased"
II The account should be marked deceased only when instructions are received from the executor of the deceased's estate
III All open orders should be canceled immediately
IV All open orders should be canceled only when instructions are received from the executor of the deceased's estate
a. I and III
b. I and IV
c. II and III
d. II and IV
Answer: a. I and III
Explanation:
As soon as word comes through that a client has passed on, the immediate thing to do is to note the date of death and then mark the account as deceased.
After this, all open orders should be immediately cancelled. It is also best to inform a superior of the development. Any other actions would from there henceforth regarding the account is to be determined by the executor of the estate.
Answer:
d. II and IV
Explanation:
The nephew cannot freeze or cause the account to be freezed because he is not considered an immediate family of the deceased or an executor for the deceased. The account cannot be marked as deceased and all open orders cannot be cancelled yet until the executor who was appointed to administer the deceased estate gives the instruction or announces to the representative of the person's death. The representative must therefore endeavor to make enquiries or call the right people to get needed information
Assume that the government is currently balancing the national budget so that outlays equal tax revenue. Then the economy slips into recession, and the government decides to increase government spending by $50 billion. The government must pay for this by borrowing; it must sell $50 billion worth of Treasury bonds. As a result: Group of answer choices
Answer: b. be in deficit by at least $50 billion.
Explanation:
The Government budget had been balanced but it will now have to spend $50 billion more than it is making. This will mean that Government expenditure will rise by $50 billion over the tax revenue which will lead to a deficit of the same amount.
These are bonds however meaning that the Government would have to pay interest on the $50 billion. This will push the deficit owed to over $50 billion meaning that the Government would be in deficit of at least $50 billion.
Current cost to source from the home plant to Country A is $0.55 per unit, plus $0.02 in shipping (there is no tariff). If product is sourced from Country B, manufacturing cost is expected to be 20% lower; but shipping will increase to $0.06, and there is a tariff of 15% on CIF. What will the savings be on 100 million units if sourcing for Country A switches from the home plant to Country B
Answer:
Cost savings in sourcing from Country A = $0.5 million ($57.5 - $57 million)
Explanation:
Sourcing from Country A:
Purchase price = $0.55 per unit
Shipping = $0.02
Total Cost = $0.57
Cost of 100 million units = $57 million
Sourcing from Country B:
Purchasing price = $0.44 ($0.55 x 80%)
Shipping = $0.06
CIF Tariff = 15% = $0.075 ($0.5 x 15%)
Total Cost = $0.575
Cost of 100 million units = $57.5 million
Sourcing from Country A is more beneficial than sourcing from Country B with reduced product cost, but increased shipping and additional tariff. Whereas Country A gives a total cost for 100 million units of $57 million, sourcing the same units from Country B gives a total cost of $57.5 million. The savings of $0.5 million is substantial that no company would like to lose unless the goods from Country B are of higher quality than those from Country A.
Quality improvement teams are groups of people from various work areas who define, analyze, and solve common production problems.
a. True
b. False
Answer: True
Explanation:
The quality improvement teams are groups of employees that are from various departments who come together and meet regularly in order to define, analyze, and then solve common production problems.
The aim of the quality improvement team is to improve the production process. This is achievable by them working on their methods.
A manufacturing company that has only one product has established the following standards for its variable manufacturing overhead. Variable manufacturing overhead standards are based on machine-hours. Standard hours per unit of output 4.50 machine-hours Standard variable overhead rate $11.52 per machine-hour
The following data pertain to operations for the last month:
Actual hours 8,900 machine-hours Actual total variable manufacturing overhead cost $95,920 Actual output 1,800 units
What is the variable overhead rate variance for the month?
Answer:
Variable manufacturing overhead rate variance= $7,209 favorable
Explanation:
Giving the following information:
Standard variable overhead rate $11.52 per machine-hour
Actual hours 8,900 machine-hours
Actual total variable manufacturing overhead cost $95,920
To calculate the variable overhead rate variance, we need to use the following formula:
Variable manufacturing overhead rate variance= (standard rate - actual rate)* actual quantity
Standard rate= 95,290/8,900= 10.71
Variable manufacturing overhead rate variance= (11.52 - 10.71)*8,900
Variable manufacturing overhead rate variance= $7,209 favorable
why must we always boil our drinking water during and after a cyclone has passed
Answer:
Sometimes following a disaster, a boil water alert is issued for areas connected to mains scheme water because the mains water may be unsafe to drink or cook with.
If a boil water alert has been issued, it is essential you follow this warning to prevent illness.
To prepare water for drinking and food preparation, you should heat the water to a rolling boil for at least 1 minute using a stove or kettle and then allow it to cool. This will help to kill any bacteria.
Be sure to keep children clear from any boiling water until the water has cooled down to room temperature.
Once it has cooled it should be placed in the fridge in a clean container with a lid.
Under no circumstances should you drink or cook with water that has not been boiled until the alert is lifted.
Alternatively you can use bottled water.
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Standard rate per direct labor-hour $ 2 Standard direct labor-hours for each unit produced 3 Units manufactured 1,000 Actual direct labor-hours worked during the month 3,300 Total actual variable manufacturing overhead $ 6,600 Knowledge Check 01 Assume that direct labor-hours is used as the overhead allocation base. What is the variable overhead efficiency variance
Answer:
Variable overhead efficiency variance= $600 unfavorable
Explanation:
Giving the following information:
Standard rate per direct labor-hour $2
Standard direct labor-hours for each unit produced 3
Units manufactured 1,000
Actual direct labor-hours worked during the month 3,300
To calculate the variable overhead efficiency variance, we need to use the following formula:
Variable overhead efficiency variance= (Standard Quantity - Actual Quantity)*Standard rate
Variable overhead efficiency variance= (1,000*3 - 3,300)*2
Variable overhead efficiency variance= $600 unfavorable
Choose some specific types of changes you would like to see happen in groups or organizations with which you are familiar. Imagine that you were to try to bring about these changes. What sources of resistance should you anticipate? How would you manage the resistance?
Answer:
Explanation:
Human are the source of resistance this include the staff, employees, employers and the team of the organization that is involved.
The resistance often come because of the fear of the outcome of the innovation or change and complacency with the current state.
Ability to Capture the passion needed and leverage on the position surrounding the change can reduces resistance among the people
Ability to get support of management, supervisors to advocate for the change helps reduce resistance.
Also, the reason for the change and its impact should be well communicated among the employees this help reduce resistance.
The issue of _____ concerns how often a particular project will be repeated and what its lifespan will be.
Full question reads;
The issue of _____ concerns how often a particular project will be repeated and what its lifespan will be.
a. frequency
b. consumption
c. pressures
d. rules
Answer:
a. frequency
Explanation:
Indeed, no particular human project can last forever, so there is a need to ascertain the frequency of a project, detailing how often the project would be repeated so as to also determine what the project's lifespan will be.
For example, a road construction project may take into account how often the road would be used, which provides insight into the frequency of road repairs and the overall lifetime of the car.
The issue of _____ concerns how often a particular project will be repeated and what its lifespan will be.
You are planning to save for retirement over the next 30 years. To do this, you will invest $900 a month in a stock account and $600 a month in a bond account. The return of the stock account is expected to be 8 percent, and the bond account will pay 5 percent. When you retire, you will combine your money into an account with a return of 6 percent. How much can you withdraw each month from your account assuming a 15-year withdrawal period
Answer:
$15,533.69
Explanation:
the future value of your stock account = $900 x 1,490.48048 (FV annuity factor, 0.6667%, 360 periods) = $1,341,432.43
the future value of your bond account = $600 x 832.32019 (FV annuity factor, 0.4167%, 360 periods) = $499,392.11
after 30 years, the balance of your 2 accounts = $1,840,824.54
the monthly withdrawal = $1,840,824.54 / 118.50531 (PV annuity factor, 0.5%, 180 periods) = $15,533.69