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2 years ago

Summarize how compound interest helps you to accumulate savings even faster.

Business

1 answer:

yulyashka [42]2 years ago

4 0

Answer:

The magic of compound interest happens in a way that the more you put in, the faster your money grows.

Explanation:

The magic of compound interest happens in a way that the more you put in, the faster your money grows. The interest you earn on the amount you save also earns interest and this snowballing effect makes you accumulate your savings even faster. For example, if you deposit $100 in a savings account that pays 5% interest per year. At the end of the year, you account will have (5%*100= 5) plus the $100 you deposited, coming to a total of $105. At the end of the second year, your $5 interest earned in year 1 will earn another 5% interest and so will the $100 you initially deposited.

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A certain project has three activities on its critical path. Activity A’s normal completion time is five days. It can be crashed

Snowcat [4.5K]

Answer:

Acitivy B should be crashed first by 2 days and Activity B has a crash cost per days of $25, it will be crashed for a total of $50.

Explanation:

activity A =

normal time (NT) = 5 days

Normal cost (NC) = $0

crash time (CT) = 3 days

Crash cost (CC) = $500

crash cost per day = [CC - NC]/[CT - NT] = $250/day

activity B:

normal time (NT) = 6 days

Normal cost (NC) = $0

crash time (CT) = 4 days

Crash cost (CC) = $50

crash cost per day = [CC - NC]/[CT - NT] = $25/day

activity C:

normal time (NT) = 8 days

Normal cost (NC) = $0

crash time (CT) = 3 days

Crash cost (CC) = $1000

crash cost per day = [CC - NC]/[ CT- NT] = $200/day

The activity that takes the least cost to speed up is the first one to be crashed. from the computations, activity B takes the least cost to speed up, so the project manager should crash activity B first by 2 days.

Therefore, Acitivy B should be crashed first by 2 days and Activity B has a crash cost per days of $25, it will be crashed for a total of $50.

6 0

2 years ago

High flyer, inc., wishes to maintain a growth rate of 16 percent per year and a debt-equity ratio of 0.90. the profit margin is

Xelga [282]

Answer: The dividend payout ratio is 46.19%.

We follow these steps in order to arrive at the answer:

We begin with the DuPont identity of RoE.

DuPont Identity:

$RoE = Net Profit Margin * Asset Turnover Ratio * Equity Multiplier$

Now,

$Equity Multiplier = \frac{1}{Debt Ratio}$

And Debt Ratio is also expressed as:

$Debt Ratio = \frac{D/E}{1+D/E}$

where D/E represents the Debt-Equity Ratio.

Substituting the value of D/E ratio from the question in the debt ratio formula above we get,

$Debt Ratio = \frac{0.9}{1+0.9}$

$Debt Ratio = \frac{0.9}{1.9}$ ----(1)

Substituting (1) in the equity multiplier formula above we get,

$Equity Multiplier = \frac{1}{\frac{0.9}{1.9}}$

$Equity Multiplier = \frac{1.9}{0.9}$

Substituting Equity Multiplier from above and the relevant numbers from the question in the DuPont identity we get,

$RoE = 0.048 * 1.08 * \frac{1.9}{0.9}$

$RoE = 0.10944$

The relationship between RoE and earnings growth rate g is given by the following formula:

$RoE = \frac{g}{(1-p)}$ , where p is the dividend payout ratio.

Plugging in the values in the formula above we get,

$0.10944 = \frac{0.16}{(1-p)}$

$1-p = \frac{0.16}{0.10944}$

$1-p = 1.461988304$

p = 0.461988304 or 46.19%

3 0

2 years ago

Kendra believes the u.s. government to be corrupt, and thinks that there should be no governing force to control people's lives.

Rainbow [258]

The answer is anarchy.

4 0

2 years ago

Ware Manufacturing Company produced 2,000 units of inventory in January 2018. It expects to produce an additional 14,000 units d

lana66690 [7]

Answer:

Total production cost= $266,380

Explanation:

First, we need to calculate the total estimated overhead costs:

total estimated overhead costs= 20,000 + 160,000 + 75,000 + 20,000

total estimated overhead costs= $275,000

To calculate the predetermined manufacturing overhead rate we need to use the following formula:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 275,000 / 16,000

Predetermined manufacturing overhead rate= $17.19 per unit

Finally, we can calculate the total production cost of the 2,000 units made in January:

Total production cost= total unitary cost*number of units

Total production cost= (64 + 52 + 17.19) * 2,000

Total production cost= $266,380

4 0

2 years ago

3.12. Retirement Planning Your uncle has $90,000 that he wishes to invest now in order to use the accumulation for purchasing a

Bumek [7]

Answer:

$12106

Explanation:

Below are the possible return options, and investment options given the schedule and period of investment.

REFER TO ATTACHED FILE FOR THE CHAT

According to this chart, Uncle can get maximum return only from option C. So he should invest everything there, however he needs to pay off 24,000 loan at the end of Year 3. Therefore, he needs to invest an amount that will yield him 24000 at then end of year 3, in Plan B.

That can be calculated by 24000/1.36 = 17647

The balance amount can wait till the beginning of year 2, and then all the amount can be invested in Plan C.

The maximum return at the end of 5 years available will be:

Amount invested in Plan C = 90000 - 17647 (amount saved for the loan payment) = 72353

Return from Plan C at the end of 5yrs = 72353 x 1.66 = $ 12106

6 0

2 years ago