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kari74 [83]
2 years ago
8

If you have a choice to earn simple interest on $10,000 for three years at 8% or annually compounded interest at 7.5% for three

years which one will pay more and by how much
Business
1 answer:
weeeeeb [17]2 years ago
8 0

Answer:

The compound interest will yield $22.97 more than simple interest.

Explanation:

Giving the following information:

Initial investment (PV)= $10,000

Interest rate (r)= 8% simple interest

Interest rate (i)= 7.5% compound interest

Number of periods= 3 years

<u>To calculate the future value of both options, we need to use the following formulas:</u>

Simple interest:

FV= PV*r*t + PV

FV= 10,000*0.08*3 + 10,000

FV= $12,400

Compound interest:

FV= PV*(1 + i)^t

FV= 10,000*(1.075^3)

FV= $12,422.97

The compound interest will yield $22.97 more than simple interest.

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Bottling Company enters into a contract with Chug’s Brewery to provide certain bottling and delivery services. Before Bottling s
irakobra [83]

Answer:

B. discharged

Explanation:

Based on the information provided within the question it can be said that Bottling's contractual obligation to Chug is breached. This term refers to when a party in a contract does not meet the obligations that they agreed upon for whatever reason. Which, since Bottling decided to not perform their part of the contract due to prices becoming to high then they are breaching the contract, regardless whether or not it is due to external factors.

3 0
2 years ago
Consider four different stocks, all of which have a required return of 15 percent and a most recent dividend of $4.20 per share.
natka813 [3]

Answer:

Dividend yield for W = 5%

Dividend yield for X = 15%

Dividend yield for Y = 20%

Dividend yield for Z = 4.6%

Explanation:

For a constant growth stock Price =\frac{D1}{r-g}

If r is made subject of formula;  r=\frac{D1}{Price}+g = div yield + growth rate

For Stock W, given r = 15% and g= 10%; dividend yield = 15%-10%=5%

For Stock X, given r = 15% and g= 0%; dividend yield = 15%-0%=15%

For Stock Y, given r = 15% and g= -5%; dividend yield = 15%-(-5)%=20%                                      

For Stock Z, the price of the stock today is calculated as follows:

Price of the stock today = \frac{D1}{(1+ke)^1}+\frac{D2}{(1+ke)^2}+\frac{P2}{(1+ke)^2}.

where P2= \frac{D3}{ke-g}

Price of the stock today = \frac{4.2(1.2)}{(1+0.15)^1}+\frac{4.2(1.2)^2}{(1+0.15)^2}+\frac{4.2(1.2)^2(1.1)}{(0.15-0.1)(1+0.15)^2}=109.57

Therefore dividend yield =\frac[D1}{Price} = \frac{4.2(1.2)}{109.57}=4.6%

5 0
2 years ago
Charleston Company has elected to use the dollar-value LIFO retail method to value its inventory. The following data has been ac
irina [24]

Answer:

Ending inventory at retail = $902,000

Ending inventory at cost = $550,424

Explanation:

Kindly check attached picture

4 0
2 years ago
Katie is looking over some of the product histories for the company. She has noticed that many more products have been rendered
valkas [14]

Answer:C. It makes it more difficult for the company to define an appropriate time period.

Explanation: Obsolete Items or products are products are no longer useful or relevant,it can be used to describe a product whose Quality has adversely depleted making it not useful.

With the information,since the products are fast becoming Obsolete than when compared to 10years ago,it makes it more difficult to determine or arrive at the appropriate time period for the company to keep the product before it becomes obsolete.

6 0
2 years ago
Balance sheets prepared under IFRS: Multiple Choice must list assets, but not liabilities in order of liquidity. may list assets
GrogVix [38]

Answer:

May list assets and liabilities from least liquid to most liquid.

Explanation:

According to International Financial Reporting Standards IFRS the companies may list their available assets and liabilities in descending order of most liquid to least liquid. It enables the users financial statements to easily assess the time assets will take to be converted into cash. Therefore cash is considered as most liquid and is first item to be presented on the Balance sheet of the company under current assets account.

5 0
2 years ago
Read 2 more answers
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