BUSINESS COLLEGE

Denise has her heart set on being a millionaire. What payment does Denise need to make at the end of each month over the coming 44 years at 6% APR to reach her retirement goal of $1 million?

Answers

Answer 1

Answer:

Answer:

$ 941 796

Explanation:

The present amount with compound interest is given by the following formula:

$A = P (1+(r)/(n))^(nt)$

where A = $ 1 000 000

t (years) = 44

rate = 6%

= 0.06

The formula becomes:

1 000 000 = P (1 + (0.06/44) (44*1)

1 000 000 = P (1.0618)

P = $ 941 796

so the amount needed to be deposited is $ 941 796

Related Questions

Estimating Share Value Using the DCF Model Following are forecasts of Whole Foods sales, net operating profit after tax (NOPAT), and net operating assets (NOA) as of September 25, 2016.Reported Horizon Period$ millions 2016 2017 2018 2019 2020 Terminal PeriodSales $15,724 $15,881 $16,199 $16,523 $16,853 $17,022NOPAT 526 524 535 545 556 562NOA 3,466 3,500 3,570 3,642 3,715 3,752Answer the following requirements assuming a discount rate (WACC) of 6%, a terminal period growth rate of 1%, common shares outstanding of 318.3 million, and net nonoperating obligations (NNO) of $242 million.(a) Estimate the value of a share of Whole Foods' common stock using the discounted cash flow (DCF) model as of September 25, 2016.Rounding instructions:Round answers to the nearest whole number unless noted otherwise. Use your rounded answers for subsequent calculations.Do not use negative signs with any of your answers.Reported Forecast Horizon($ millions) 2016 2017 2018 2019 2020 Terminal PeriodIncrease in NOA Answer Answer Answer Answer AnswerFCFF (NOPAT - Increase in NOA) Answer Answer Answer Answer AnswerDiscount factor [1 / (1 + rw)t ] (Round 5 decimal places) Answer Answer Answer AnswerPresent value of horizon FCFF Answer Answer Answer AnswerCUMULATIVE present value of horizon FCFF $ AnswerPresent value of terminal FCFF AnswerTotal firm value Answer NNO AnswerFirm equity value $ AnswerShares outstanding (millions) Answer (Round one decimal place)Stock price per share $ Answer (Round two decimal places)(b) Whole Foods stock closed at $30.96 on November 18, 2016, the date the 10-K was filed with the SEC. How does your valuation estimate compare with this closing price? What do you believe are some reasons for the difference?A. Stock prices are a function of many factors. It is impossible to speculate on the reasons for the difference.B. Our stock price estimate is only a few cents lower than the Whole Foods market price, indicating that we believe that Whole Foods stock is accurately priced. Our stock price estimate is lower than the Whole Foods market price, indicating that we believe that Whole Foods stock is overvalued.C. Stock prices are a function of expected NOPAT and NOA, as well as the WACC discount rate. Our lower stock price estimate might be due to more optimistic forecasts or a lower discount rate compared to other investors' and analysts' model assumptions.D. Our stock price estimate is lower than the Whole Foods market price, indicating that we believe that Whole Foods stock is undervalued. Stock prices are a function of expected NOPAT and NOA, as well as the WACC discount rate. Our lower stock price estimate might be due to more optimistic forecasts or a lower discount rate compared to other investors' and analysts' model assumptions.
Megan Brink is offered the possibility of investing $6,651 today at 6% interest per year in a desire to accumulate $10,000. How many years must Brink wait to accumulate $10,000
A market segment is less attractive when ________. A) there are few aggressive competitors in the segmentB) it is difficult for new entrants to enter the segmentC) it contains powerful suppliers who can control pricesD) substitute products are unavailable in the segmentE) buyers in the market segment have weak bargaining powers
The relevant production range for Challenger Trailers, Inc. is between 120,000 units and 190,000 units per month. If the company produces beyond 190,000 units per month:__________. A. the fixed costs and the variable cost per unit will not change B. the fixed costs may change, but the variable cost per unit will remain the same C. the fixed costs will remain the same, but the variable cost per unit may change D. both the fixed costs and the variable cost per unit may change
Bill Buckely has split-limit 100/200/40 automobile liability insurance on his 2012 Subaru. Driving home from work in a snowstorm, he hit a Mercedes, slid into a guardrail, and knocked down a telephone pole. Damages to the Mercedes, the guardrail, and the telephone pole were $33,428, $7,422, and $12,041 respectively. How much will Bill's insurance company pay? How much will Bill be required to pay directly? Bill's insurance company will pay $nothing. (Round to the nearest dollar.) The amount Bill will be required to pay directly is $nothing. (Round to the nearest dollar.)

"The Federal Reserve raises the reserve requirement from 7 percent to 8 percent. Consequently banks must set aside more money and consequently have less money to lend. The result is that the banks will raise the interest rate they charge to their customers. These conditions make it harder and more expensive for people and businesses to borrow money. Because they can’t borrow as much, they can’t spend as much. If people aren’t spending as much, prices don’t go up. With this action, the Fed has lessened the likelihood of ________."

Answers

Answer: a. Inflation

Explanation:

Inflation refers to the general rise in prices of items in an economy in a certain period of time. Inflation essentially erodes the value of the domestic currency of the economy in question.

Central Banks like the Fed can use Monetary policy to influence inflation. In this case they reduced the amount of money in the economy by reducing bank loans. This will ensure that people cannot spend too much which would increase demand and therefore increase prices.

By doing this, they have limited the likelihood of inflation.

Sommer, Inc., is considering a project that will result in initial aftertax cash savings of $1.75 million at the end of the first year, and these savings will grow at a rate of 2 percent per year indefinitely. The firm has a target debt-equity ratio of .80, a cost of equity of 11.5 percent, and an aftertax cost of debt of 4.3 percent. The cost-saving proposal is somewhat riskier than the usual project the firm undertakes; management uses the subjective approach and applies an adjustment factor of 3 percent to the cost of capital for such risky projects.

Answers

Answer:

The question is: "What is the maximum initial cost the company would be willing to pay for the project?"

The maximum initial investment cost the company would be willing to pay for the project is $18,817,204.

Explanation:

We have D/E = 0.8 => D/ (D+E) = 4/9; E/(D+E) = 5/9.

WACC of the firm = 4/9 x 4.3% + 5/9 x 11.5% = 8.3%.

Adjustment for cost capital due to higher risk of the project: 8.3% + 3% = 11.3%.

=> Maximum initial investment cost is equal to the net present value of the cash saving the project brings about discounting at project's cost of capital, calculated as:

1,750,000/ (11.3% - 2%) = $18,817,204.

Thus, the Maximum initial investment cost is $18,817,204.

a bond is selling at par value of $1,000 with 10 years to maturity and pays an 8% coupon rate annually. what is the ytm? enter your answer to two decimal places. do not include the % symbol. example: if your answer is 10.22% enter 10.22

Answers

Yield to maturity (YTM) is the overall rate of return that a bond will have earned once all interest payments are made and the principal is repaid. The Yield to maturity is 8

Explain about the Yield to maturity?

The annual percentage rate of return on a bond calculated under the assumption that the investor would hold the bond until it matures is known as the yield to maturity (YTM). The amount is the sum of the remaining coupon payments. The yield to maturity fluctuates according to the market price of the bond and the number of payments left to make.

The yield is the total return that an investor in a bond will receive from the moment the bond is purchased until it matures. As an example, a city might issue bonds that have a 2.192% yield and will maturity on September 1, 2032.

= 8% x 1000/10

= 80/10

= 8

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Baka Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $244,200 and 9,200 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $245,000 and actual direct labor-hours were 6,100. The overhead for the year was: (Round your intermediate calculations to 2 decimal places.)

Answers

Answer:

The overhead for the year will be $245,000

Applied overheads in the year are $161,894 and Underapplied overheads are $83,106 total charged to cost of goods sold will be $245,000

Explanation:

Predetermined overhead rate = total estimated overhead / estimated direct labor-hours

Predetermined overhead rate = 244,200 / 9,200

Predetermined overhead rate = 26.54 per labor hour

Overhead for the year = Predetermined overhead rate X Actual Direct Labor hours

Overhead for the year = 26.54 x 6100

Overhead for the year = 161,894.00

Underapplied overheads = 245,000 - 161,894 = 83,106.00

Final answer:

The overhead for the year is $162,317.

Explanation:

To calculate the overhead for the year, we need to use the predetermined overhead rate based on direct labor-hours. The predetermined overhead rate is calculated by dividing the total estimated overhead by the estimated direct labor-hours. In this case, the predetermined overhead rate is $244,200 / 9,200 labor-hours, which is $26.57 per labor-hour.

To find the overhead for the year, we multiply the actual direct labor-hours by the predetermined overhead rate. In this case, the actual direct labor-hours are 6,100. So the overhead for the year is 6,100 labor-hours * $26.57 per labor-hour, which equals $162,317.

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Categorize the scenarios as either a discretionary act or the result of automatic stabilizers.a. Economic growth increases personal and corporate income, increasing tax payments.
b. A recession increases the number of recipients of unemployment benefits.
c. Legislators increase tbc generosity of unemployment benefits.
d. A law is enacted that increases government spending on health-care programs

1. Discretionary spending
2. Automatic stabilizers

Answers

Answer:

a. automatic stabilizers.

b. automatic stabilizers.

Discretionary spending

Explanation:

Automatic stabilizers are stabilizers that adjust the economy automatically without the intervention of external agents . examples include progressive tax and transfer payments

In an expansion, progressive tax increases the tax paid and this reduces disposable income

In a contraction, tax paid is reduced and this increases disposable income

Discretionary fiscal policies are deliberate steps taken by the government to stimulate the economy in order to cause the economy to move to full employment and price stability more quickly than it might otherwise.

Discretionary fiscal policies can either be expansionary or contractionary

Expansionary fiscal policy is when the government increases the money supply in the economy either by increasing spending or cutting taxes.

Contractionary fiscal policies is when the government reduces the money supply in the economy either by reducing spending or increasing taxes

Changes in real GDP reflect Group of answer choices only changes in prices. only changes in the amounts being produced. both changes in prices and changes in the amounts being produced. neither changes in prices nor changes in the amounts being produced.

Answers

Answer:

Only changes in the amounts being produced is the correct answer to this question.

Explanation:

Real GDP is the value of goods and services at base year prices so real GDP changes reflect changes in the amounts produced in the economy.

Effective gross domestic product ( GDP) is an inflation-adjusted indicator representing the cost of the goods and economic resources by a nation in a given year (demonstrated in foundation-year prices) and is often referred to as "current prices," "corrected deflation," or "constant currency" GDP.

Final answer:

Changes in real GDP reflect both changes in prices and changes in the amounts being produced.

Explanation:

Changes in real GDP reflect both changes in prices and changes in the amounts being produced. Real GDP is a measure of the total value of goods and services produced in an economy adjusted for inflation. As prices increase, the value of goods and services produced will also increase, resulting in a higher real GDP. Similarly, when more goods and services are produced, real GDP increases as well.