This person earns $1000 of income today and $2000 income next year. Point C represents his consumption if he doesn't borrow or lend. If the interest rate is 10%, his Consumption Next Year at Point A is? Consumption Next Year
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- Multiperiod Consumption-Saving Plan Assume a person is 35 years old and plans to retire at age 65. So s/he has 30 more years to work. Assume the following additional information apply: Annual (real) income = $40,000 Real interest rate = 5% Expected live after retirement = 20 years Desired retirement income = 75% of pre-retirement income = $30,000 Prepare lifetime consumption-savings schedule for the person. First calculate how much s/he should have at retirement in order to consume $30,000 per year for 20 more years. This is the PV of annuity of $30,000 over 20 years at interest rate of 5%. 30,000* (PVIFAs°20) = $373,866.31. This amount is also equal to the future value of what s/he should save over her/his remaining 30 working years. (Annual saving)* (FVIFAS9,30) = $373,866.31. Solve for annual saving and you will get $5,627.22.What is the IRR for an investment of $X that returns $Y at the end of each year for Nyears? X=$11,040 Y=$992.25 N=41 yearsinvestmenthet equation takes the i^(p )= 50 + 0.2y – 2000 i. calculate planned investment spending when i = 0.05 per year (5% per year) and y = $1000 per year. repeat for i = 0.05 per year and y = $700 per year. repeat for i = 0.08 per year and y = $700per year.
- You invested $100,000 in a project and received $40,000 at n = 1, $40,000 atn = 2, and $30,000 at n = 3 years. You need to terminate the project at the end of year 3. Your interest rate is 10%; what is the project balance at the time of termination?(a) Gain of $10,000(b) Loss of $8,039(c) Loss of $10,700(d) Just break evenShow complete solution David won a lottery worth $10,000,000. He has opted for an annuity payment at the end of each year for the next 20 years as a payout. Determine the amount that David will be paid as annuity payment if the ongoing rate of interest in the market is 5%. Determine what is the Lumpsum if David decides to withdraw everything at the end of 20.The PHP 65,700 is the present value of PHP 67,500 due in three months.Compute the simple interest.Find out the discount rate.
- . a. Fred’s Hardware and Hobby House expects its sales to increase at a constant rate of 8 percent per year over the next three years. Current sales are $100,000. Forecast sales for each of the next three years.Benjamin receives an annual bonus of $1,000 and wants to invest it in an account that earns interest for the next 3 years. Below are the two options that he is considering putting his money into. Which of the following statements is true? NEED ASAP PLS.Abbott wants to increase their marketing for Pedialyte leading up to St. Patrick's Day this year. They launch a Superbowl ad on 2/13/2022, costing them $5,000,000, and they launch a secondary campaign in early March (3/6) costing $800,000. They expect to see sales starting at $500,000 on 2/20, increasing by 20% every week for 6 weeks. Assuming a MARR of 12%, what is the present value of this project at the start of the campaign if they stop attributing sales to this on 4/3/2022?O. $602,449O. $597437O. $563,446O. $321,998
- Abbott wants to increase their marketing for Pedialyte leading up to St. Patrick's Day this year. They launch a Superbowl ad on 2/13/2022, costing them $5,000,000, and they launch a secondary campaign in early March (3/6) costing $800,000. They expect to see sales starting at $500,000 on 2/20, increasing by 20% every week for 6 weeks. Assuming a MARR of 12%, what is the present value of this project at the start of the campaign if they stop attributing sales to this on 4/3/2022? Group of answer choices $563,446 $602,449 $321,998 $597,437An advertising campaign will cost $ 200 000 for planning and $ 40 000 in each of the next six years. It is expected to increase revenues permanently by $ 40 000 per year. Additional revenues will be gained in the pattern of an arithmetic gradient with $ 20 000 in the first year, declining by $ 5000 per year to zero in the fifth year. What is the IRR of this investment? If the company’s MARR is 12 percent, is this a good investment? answer should be=12.4%Your father paid $10,000 (CF at t = 0) for an investment that promises to pay $850 at the end of each of the next 5 years, then an additional lump sum payment of $12,000 at the end of the 5th year. What is the expected rate of return on this investment?