Answer: Yes, they could save about $5 less per month and still have enough money.
Explanation: Arthur is 10 years old. Tuition for one year at a public two-year college is $3,125. In 8 years, tuition is expected to increase 32%. Arthur’s family plans to save for his college costs for 5 years. If the family saves $75 per month, will there be enough money to pay for the expected cost of one year at the college when he is 18?
Yes they could save $75 and still have enough money to pay for one year at the college when he is 18.
Workings=
12( months) x 5 (years)= 60 months
If the family save $75 monthly for 5 years
$75 x 60 (months)= $4500
At the end of the family 5 years savings, they would be having a total of $4500 which would be more than enough to pay for the expected cost of one year at the college when he is 18.
Answer:
C. 42 years
Explanation:
Rule 72 is used in finance and economics to estimate the number of years it will take for a given capital value to be doubled, given a given annual interest rate. In the case of GDP, the interest rate is replaced by the growth rate of the economy.
The formula for this rule consists of dividing 72 by the growth rate of the economy. The result will be the number of years for the capital value to double.
72 / growth rate = years to double
If the GDP growth rate is 1.7%, we have:
72 / 1.7 = 42.3 years
Answer: External opportunity
Explanation:
External opportunities are legal, political, economical, social, technological, environmental and cultural factors that may benefit an organization. External opportunities are beyond the control the organization.
In the scenario illustrated, the act of terrorism in the United States on 11th September 2001, led to a growth in cruise travel. This is an example of external opportunity as the growth wasn't caused by an internal factor.
The company's external equity comes from those funds raised from public issuance of shares or rights. The cost of external equity is the minimum rate of return which the shareholders supply new funds <span>by </span>purchasing<span> new shares to prevent the decline of the market value of the shares. To compute the cost of external equity, we should use this formula:</span>
Ke<span> = (DIV 1 / Po) + g</span>
Ke<span> = cost of external equity</span>
DIV 1 = dividend to be paid next year
Po = market price of share
g = growth rate
In the problem, the estimated dividend to be paid next year is $1.50. The market price is $18.50 and the growth rate is 4%.
<span>Substituting the given to the formulas, we need to divide $1.50 by $18.50 giving us the result of 8.11% plus the growth rate; this would yield to the result of 12.11% cost of external equity.</span>
Answer:
The Warren's total assets at the end of April is $345,000
Explanation:
The computation of the ending total assets value is shown below:
= Total assets - sale of stock + machine purchased - cash payment for purchase of building + purchase of short term investment - cash payment for purchase of short term investment - cash paid to the employee as a loan + notes issued
= $240,000 + $20,000 + $95,000 - $10,000 + $9,000 - $9,000 - $10,000 + $10,000
= $345,000
