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Maslowich
2 years ago
10

Suppose an investment broker offers to sell you a financial asset for $850. You will receive only one payment of $1,000 five yea

rs from now. What interest rate would you earn if you bought the financial asset at the offer price
Business
2 answers:
avanturin [10]2 years ago
6 0

Answer:

The interest rate is 0.06%

Explanation:

Step one :

Given data

final amount $1,000

initial principal balance $850

annual interest rate=?

time (in years)=5 years

Step two:

Applying the

Simple interest/Formula

A = P (1 + rt)

A = final amount

P = initial principal balance

r = annual interest rate

t = time (in years)

Plugin our data into the formula We have

1000=850(1+r*5)

1,000=850(1+5r)

Opening bracket we have

1,000=850+4,250r

Colleting like terms we have

1000-850=4250r

250=4,250r

Dividing both sides by 4,250 we have

r=250/4250

r=0.058

Hence the interest rate is 0.06%

Nitella [24]2 years ago
3 0

Answer:

0.035%

Explanation:

Using the formula for calculating simple interest.

Simple interest = Principal × Rate × Time/100

Since Amount = Principal + Interest

Interest = Amount - Principal

Interest = $1000 - $850

Interest = $150

If time = 5years

Principal = $850

To get the interest rate, we will substitute the given data into the simple interest formula to have;

$150 = ($850×Rate×5)/100

Cross multiplying

$15,000 = 425000×rate

Interest Rate = 15000/425000

Interest rate = 0.035%

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Answer:

A. The amount of fixed overhead deferred in inventories is $60,000

Explanation:

Unit product cost      

                                            Year 1      Year 2  

Direct materials                      $12         $12

Direct labor                              $5        $5  

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overhead                                     $5      $5  

Fixed overhead

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unit product cost                       $70      $58

Fixed overhead deferred (1,000 × $48)   $48,000  

Fixed overhead released                                             -$48000  

Fixed overhead deferred (3000 × $36)                        $108,000  

Net                                                             $48,000        $60,000

The amount of fixed overhead deferred in inventories is $60,000

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Explanation:

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7 0
2 years ago
A local pizzeria sells 500 large pepperoni pizzas per week at a price of $20 each. Suppose the owner of the pizzeria tells you t
kotegsom [21]

Answer: (1) 700 pizzas

(2) Its revenue increases by $2600.

Explanation:

Given that,

price elasticity of demand for his pizza = -4

Percentage change in price = 10%

Initial Quantity,Q_{0} = 500 Pizzas

Elasticity of demand = \frac{Percentage\ change\ in\ quantity }{Percentage\ change\ in\ price }

-4 = \frac{Percentage\ change\ in\ quantity }{0.1 }

\frac{Percentage\ change\ in\ quantity } = -4 × 0.1

\frac{Q_{1}-Q_{0}}{Q_{0}} = 0.4

\frac{Q_{1}-500}{500} = 0.4

∴ Q_{1} = 700

Initial price, P_{0} = $20

Changed price, P_{1} = $18

Revenue at t = 0

P_{0} Q_{0} = 500 × 20 =$10000

Revenue at t = 1

P_{1} Q_{1} = 700 × 18 = $12600

Therefore, from the above calculations it was seen that his revenue increases by ($12600 - $10000)= $2600 and its sales increases to 700.

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