Both monies pooled together after taxes add together the sum of £1626.56. With outgoings at £1140 and £1625 pooled together there is a difference of £405 which split between the two girls would be a total of £202.50. Using the online household equivalence calculator this compensates Praveena’s loss of income by 37%. Case study 2 Casper is in the process of paying for his holiday which will cost him £2000, he is considering what to do? If Casper decided to take out a loan that charges 20% APR over one year for the amount of £2000 over 12 months he would expect to pay £183 per month for 12 months with interest of £205.
Answer: she paid $8000 over the life of the loan. 100*$500=$50,000 - $10,000down = $40,000 borrowed 40,000 * 5 * .04 = $8000 5) Using the information in the last question, what is the periodic payment for year 8 of the loan? Note: Sally purchased an additional 100 cows. She paid $500/cow. She paid $10,000 down and took out a 5 year loan with interest calculated using add-on interest for the rest of the cost of the land.
What would be the second year future value? (LG4-3) FV = 750 × (1 + 0.10) (1 + 0.12) 750 × 1.10 × 1.12 Answer: 924.00 4-11 Present Value What is the present value of a $1,500 payment made in six years when the discount rate is 8 percent? (LG4-4) PV = 1500/(1+0.08)6 1500/1.586874323 Answer: 945.25 4-13 Present Value with Different Discount Rates Compute the present value of $1,000 paid in three years using the following discount rates: 6 percent in the first year, 7 percent in the second year, and 8 percent in the third year. (LG4-4) PV = 1000 / ((1 + 0.06) (1 +0.07) (1 + 0.08)) 1000/ (1.06 × 1.07 × 1.08) 1000/1.224936 Answer: 816.37 4-16 Rule of 72 Approximately how many years are needed to double a $500 investment when interest rates are 10 percent per year? (LG4-6) N=72 / 10 Answer: 7.2 4-31 Solving for Time How many years (and months) will it take $2 million to grow to $5 million with an annual interest rate of 7 percent?
2. Assuming retail price is still the same, customer would pay $1,200 plus usage costs of 60*$161.25 = $9,675 amounting to a total of $10,875 spent over each motors lifetime Design a higher torque 5HP motor: 1. Research and development of this motor would be time consuming (5mos) and costly ($75,000 investment in engineering and testing). DMC currently has a high margin 5HP motor, costs are only 50% of resale price. This new specific purpose design with higher torque will also cost much more to manufacture, approx $665 per motor.
Should the company purchase the small technology firm? Use an interest rate of 12%. What is the “breakeven price” of the small technology firm? (Points : 10)\ 2. A bond has a par value of $100,000 and pays interest revenues of $5,000 per year.
How much would you have to invest today to receive: a. $12,000 in 6 years at 12% b. $15,000 in 15 years at 8% c. $5,000 each year for 10 years at 8% d. $40,000 each year for 40 years at 5% 4. Mrs. Crawford will receive $6,500 a year for the next 14 years from her trust. If an 8% interest rate is applied, what is the current value of the future payments?
Cash-based income: Revenues Received $6,000 Less expenses paid $5,000 = Income $1,000 3. Question 3: Please refer to Q2. What was Brady Brothers accrual basis income? Accrual-based income: Revenues Earned $12,000 Less expenses incurred $8,000 =Income $4,000 4. Question 4: Anderson Company’s balance sheet at the end of the year revealed the following information: Clients owe Anderson Company $35,300 for completed projects.
The older pager devices getting obsolete Price Break Down: Tallant: ($16.95+$1.95+$11.9) x20 pagers x12 months + ($60.00x20pagers) =$8,592.00 per year Saxton: $13.95x20pagers x12months = $3348.00 per year Case Analysis: Price wise Cottrill will save $5244.00 per year if they chose Saxton over Tallant. Cotrill will also have a direct person of contact at Saxton which seems to be a very attractive option. However, the direct contact Natalie Hopkins is a sales representative who might not be much aware of the technical issues which the pager might have and in real time situations Natalie might also need to call or email an expert which might take the same amount of time as the customer service in Tallant. The main concern in this case is the functionality issue with the Saxton pager which was seen on the trail which seemed to have been fixed after
1. Your savings of $200,000 is earning 8% interest. A. If retirement is scheduled in 15 years and inflation is expected to average 5% annually during that period, will you have accumulated the $300,000 in purchasing power that you deem necessary? If not, by how much will you be short?
Purchase Costs | Leasing Costs | Down payment $1,500 | Security deposit $500 | Loan payment $450 for 48 months | Lease payment $450 for 36 months | Estimated value atEnd of loan $4,000 | End of lease charges $600 | Opportunity cost interest rate: 4 percent | Purchasing vehicle: $1,500 + [$450 x 48mths ] - $4,000 + [$1,500 x 0.4% x 4yrs] = $19,340 Leasing vehicle is: [$450 x 36mths] + $600 + [$500 x 0.4% x 3yrs] = $16,860 3. You can purchase a service contract for all of your major appliances for $180 a year. If the appliances are expected to last for 10 years, and you earn 5 percent on your savings, what would be the future value of the amount you would pay for the service contract? $293.22 4. You estimate that you can save $3,800 by selling your own home rather than using a real estate agent.