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trasher [3.6K]
2 years ago
7

Your Green Investment Tips subscription is about to expire. You plan to subscribe to the magazine for the rest of your life, and

you can renew it by paying $85 annually, beginning immediately, or you can get a lifetime subscription for $850, also payable immediately. Assuming that you can earn 6.0% on your funds and that the annual renewal rate will remain constant, how many years must you live to make the lifetime subscription the better buy?
a. 14.33
b. 7.48
c. 8.80
d. 10.35
e. 12.18
Business
1 answer:
pentagon [3]2 years ago
4 0

Answer:

The answer is a. 14.33.

Explanation:

We apply the net present value (NPV) methodology to approach the two options.

+ The lifetime subscription's npv = $(850)

+ The annual subscription's npv = - 85 - [ 85/6% * [ 1 - 1.06^(-n) ], with n is the number of years the subscriber still lives.

To make a lifetime subscription a better buy, the NPV of this option should be higher than the NPV of annual subscription or:

85 + [ 85/6% * [ 1 - 1.06^(-n) ] > 850 <=> 1 - 1.06^(-n) > 0.54 <=> 1.06^(-n) < 0.46 <=> -n < -13.33 <=> n > 13.33.

So, the subscriber should live more than 14.33 years ( 13.33 + 1 years for another next year subscription) to make the lifetime subscription a better choice.

So, a is the correct choice.

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Answer: $90.62

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First, we need to calculate the expected return. This will be:

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= 4 × (1+0.075) / (0.12245 - 0.075)

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2 years ago
Your industrial supply company wants to create a data warehouse where management can obtain a single corporate-wide view of crit
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Answer:

Industrial supply company scenario:

  • The company wants to create a data warehouse where management can obtain a single corporate-wide view of critical sales information to identify best-selling products in specific geographic areas, key customers, and sales trends.
  • The sales and product information are stored in both a divisional sales system running on a Unix server and a corporate sales system running on an IBM mainframe.
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Business problems:

  • A business problem that can arise from not having these data in a single standard format is that employees will see the data as inconsistent.
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  • The corporate sales system also lacks a way to identify the identification of the customer.
  • Both sales system should be consistent with the information in order to prevent redundancies or inaccuracies.  

How easy it would be to create a database with a single standard format:

  • Creating a database with a single standard format would ideally be easy.
  • Data quality audits and data cleansing should be performed when constructing the new database.
  • Data quality audits and data cleansing would correct any redundancies and inaccuracies in the current systems.
  • By using data-cleansing software, the company can combine and integrate the data from all the systems into a single standard format that is uniform throughout the whole company.

Problems that should be addressed:

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  • This would provide more information for each entry and would limit any confusion among the employees.

Database specialists:

  • Database specialists will help solve the problems by performing the data quality audits and data cleansing.
  • They will also help in establishing an information policy and developing the new database.
  • They are also responsible for the specific policies and procedures through which data can be managed as an organizational resource.
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General business managers:

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  • They would be responsible for defining and organizing the structure and content of the database and maintaining the database.

Who should have the authority?

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6 0
2 years ago
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For a competitive retailer to get a consumer's patronage, they should implement strategies of attracting their consumers of which will likely gain their support and make their consumers many than of their competitors. An example of this is by having to offer discounts in means of attracting other consumers to buy their products as a means of having to gain their support.
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Answer:

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