BUSINESS COLLEGE

If you earn an annual interest rate of 8.9 percent, how many years will it take to double your money

Answers

Answer 1
Answer:

Answer:

Every 7.86 years the investment doubles.

Explanation:

Giving the following information:

Interest rate= 8.9% compounded annually

To determine the number of years to double the money, we can use the rule of 70:

The rule of 70 is a means of estimating the number of years it takes for an investment or your money to double.

Number of Years to Double= 70/Annual Rate of Return

Number of Years to Double= 70/8.9

Number of Years to Double= 7.86 years

Every 7.86 years the investment doubles.

Related Questions

The following data were taken from the records of Clarkson Company for the fiscal year ended June 30, 2017.Raw Materials Inventory 7/1/16 $51,100Factory Insurance $4,700Raw Materials Inventory 6/30/17 46,000Factory Machinery Depreciation 19,000Finished Goods Inventory 7/1/16 98,200Factory Utilities 29,100Finished Goods Inventory 6/30/17 26,100Office Utilities Expense 9,350Work in Process Inventory 7/1/16 26,800Sales Revenue 564,000Work in Process Inventory 6/30/17 22,300Sales Discounts 4,700Direct Labor 147,750Plant Manager’s Salary 65,600Indirect Labor 26,560Factory Property Taxes 9,810Accounts Receivable 27,100Factory Repairs 1,600Raw Materials Purchases 97,500Cash 35,600A) Prepare a cost of goods manufactured schedule (Assume all raw materials used were direct materials).B) Prepare an income statement through gross profitC) Prepare the current assets section of the balance sheet at June 30,2017
At the beginning of the video, Priya ends her presentation by asking her colleagues to imagine "a world where you never have to wait in line for your groceries again!" What stage of Lewin’s Change Model is Priya exhibiting?
Which financial statement matches asset increases from operating a business with asset decreases from operating the business?Statement of changes in equity.Balance sheet.Statement of cash flows.Income statement.
Which of the following is true of first movers? a. The first mover cannot be able to establish brand loyalty. b. Being a first mover guarantees instant success. c. The first mover cannot create switching costs for its customers to deter rivals. d. The first mover that creates a revolutionary product is in a monopoly position. e. The first mover has no opportunity to exploit network effects and positive feedback loops.
Watkins Associated Industries is a highly diversified company with three divisions: Trucking, Seafood, and Construction. Assume that the company uses return on investment and residual income as two of the evaluation tools for division managers. The company has a minimum desired rate of return on investment of 10% with a 30% tax rate. Selected operating data for three divisions of the company follow.Trucking Division Seafood Division Construction DivisionSales $1,250,000 $800,000 $950,000Operating assets 650,000 300,000 400,000Net operating income 146,250 52,800 79,6001) Compute the return on investment for each division. 2) Compute the residual income for each division.

Boise, a division of Price Enterprises, currently performs computer services for various departments of the firm. One of the services has created a number of operating problems, and management is exploring whether to outsource the service to a consultant. Traceable variable and fixed operating costs total $80,000 and $25,000, respectively, in addition to $18,000 of corporate administrative overhead allocated from Price. If Boise were to use the outside consultant, fixed operating costs would be reduced by 70%. The irrelevant costs in Boise’s outsourcing decision total:

Answers

Answer:

irrelevant costs in Boise’s outsourcing = $25500

Explanation:

given data

variable costs = $80,000

fixed operating costs = $25,000

administrative overhead = $18,000

fixed operating costs reduced = 70%

to find out

The irrelevant costs in Boise’s outsourcing decision total

solution

we get here first reduction in traceable cost that is

reduction = 30% of $25,000

reduction = $7500

so irrelevant costs in Boise’s outsourcing will be

irrelevant costs in Boise’s outsourcing = administrative overhead + reduction cost

irrelevant costs in Boise’s outsourcing = $18000 + $7500

irrelevant costs in Boise’s outsourcing = $25500

A call option on MassComputer Corp. is trading with a strike price of $100 and an expiration date on November 18th at 4 pm in the afternoon. The premium paid on the call is $7.55. What is the net profit or loss from buying the call just prior to 4 pm on November 18 if at this time the stock price per share of MassComputer is:

Answers

The net profit or loss from buying the call should be $3.17 and -$7.55.

Calculation of stock price per share:

here, a Stock price higher than the strike price option will be exercised.

Net profit = Stock price - Strike price - Option premium

= $110.72 - $100 - $7.55

Net profit = $3.17

Stock price is lower than the strike price option will fail.

Net profit = Stock price - Strike price - Option premium

= 0 - $7.55

Net profit(loss) = -$7.55

Learn more about net profit here: brainly.com/question/24364525

Nuzum Corporation has two divisions: Division M and Division N. Data from the most recent month appear below: Total Company Division M Division N Sales $557,000 $254,000 $303,000 Variable expenses 144,910 81,280 63,630 Contribution margin 412,090 172,720 239,370 Traceable fixed expenses 273,000 128,000 145,000 Segment margin 139,090 44,720 94,370 Common fixed expenses 94,690 43,180 51,510 Net operating income $ 44,400 $ 1,540 $ 42,860 Management has allocated common fixed expenses to the Divisions based on their sales. The break-even in sales dollars for Division N is closest to:

Answers

Answer:

$ 183,544.30 = $ 183,544

Explanation:

Nuzum Corporation

                                       Total             Division M         Division N          

Sales                              $557,000          $254,000      $303,000

Variable expenses          144,910             81,280             63,630

Contribution margin        412,090            172,720          239,370

Traceable fixed expenses 273,000        128,000          145,000

Segment margin                139,090          44,720            94,370

Common fixed expenses 94,690           43,180               51,510

Net operating income    $ 44,400          $ 1,540           $ 42,860

First we find the Segment CM ratio by the following formula:

Segment Contribution Margin Ratio= Segment Sales- Segment Variable Expenses/ Sales

Segment Contribution Margin Ratio= 303,000 -63630/303000

Segment Contribution Margin Ratio= 239370/303000=0.79

Then we find the break even sales in dollars.

Break Even Sales in Dollars= Traceable Fixed Expense/ Segment Contribution Margin Ratio

Break Even Sales in Dollars =145,000/0.79=  $ 183,544.303

John and Sally Claussen are considering the purchase of a hardware store from John Duggan. The Claussens anticipate that the store will generate cash flows of $70,000 per year for 20 years. At the end of 20 years, they intend to sell the store for an estimated $400,000. The Claussens will finance the investment with a variable rate mortgage. Interest rates will increase twice during the 20-year life of the mortgage. Accordingly, the Claussens’ desired rate of return on this investment varies as follows: (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)Years 1-5: 7%Years 6-10: 10%
Years 11-20: 12%
Required: What is the maximum amount the Claussens should pay John Duggan for the hardware store?

Answers

Answer:

Explanation:

Calculate maximum that should pay:

Compute present value of cash flows from the store, year 1 to 5:

Annual cash flows are $70,000

Desired rate of return on investment for 1 to 5 years is 7%

Number of years is 5

Present value of cash flows generated during 1 to 5 years =

= $287,013.82

Compute present value of cash flows from the store for years 6 to 10

Annual cash flows are $70,000

Desired rate of return on investment for 6 to 10 years is 10%

Desired rate of return on investment for 1 to 5 years is 7%

Number of years is 5

Present value of cash flows generated during 6 to 10 years = annual cash flows x PVIFA (10%,5) x PVIF (7%,5)

= $70,000 x 3.79079 x 0.7130 = $189,198.33

Compute present value of cash flows from the store for years 11 o 20

Annual cash flows are $70,000

Desired rate of return on investment for 11 to 20 years is 12%

Desired rate of return on investment for 6 to 10 years is 10%

Desired rate of return on investment for 1 to 5 years is 7%

Number of years is 10

Present value of cash flows generated during 11 to 20 years = [annual cash flows x PVIFA (12%,10)] x PVIF (10%,5) x PVIF (7%,5)

= $70,000 x 5.65022 x 0.62092 x 0.7130  = $175,100.98

Calculate present value of estimated sale amount to be received for sale of store

Present value of estimted sale amount to be received = [Estimated sale amount x PVIF (12%,10)] x PVIF (10%,5) x PVIF (7%,5)

=$400,000 x 0.32197 x 0.62092 x 0.7130=

=$57,016.50

Calculate total maximum amount that should be paid

Particulars Amount ($)

Present value of cash flows during 1 to 5 years         $287,013.82

Present value of cash flows during 6 to 10 years $189,198.33

Present value of cash flows during 11 to 20 years $175,100.98

Present value of estimated sale value                  $57,016.50

Maximum amount that C should pay to JD for store $708,329.63

Therefore, Maximum amount that should be paid $708,329.63

Each of the following are classified as a noncash investing or financing activity except: a. retirement of debt by issuing stock
b. reissuing treasury stock
c. purchase of long-term assets by issuing bonds
d. purchase of noncash assets by issuing equity

Answers

Answer: b. reissuing treasury stock

Explanation:

Investing Activities in the Cashflow Statement refer to transactions that have to do with the buying and selling of Capital Goods such as Fixed Assets. It also refers to investments in other company bonds and stock.

Financing has to do with how the firm finances it's operations. These include long term debt and stock related transactions.

When these transactions are non-cash, it means quite rightly that no cash was exchanged and instead something else for exchanged instead of cash. For example, A non-cash Investing and Financing activity would be the purchase of long-term assets by issuing bonds.

In this question, option B being the reissuance of Treasury Stock is not a non-cash transaction. Treasury Stock is the company's own stock that it required from the market. By reissuing it, they will be doing so with cash involved. That is, people will buy the reissued shares and pay cash for them thus making it a Cash Financing Activity.

Your company expects to receive CAD 1,200,000 in 90 days. The 90 day forward rate for CAD is $0.80 and the current spot rate is $0.75. If you use a forward hedge, estimate the cost of hedging the receivable if, 90 days later, the spot rate for CAD 90 days later turns out to be $0.82.a. $50,000
b. $50,000
c. $75,000
d. $75,000

Answers

Answer:

Cost of hedging = $24,000

Explanation:

cost of hedging = 1,200,000 * ($0.80 - $0.82) = 1,200,000 * $0.02 = -$24,000

Since the actual forward rate was higher than th eexpected forward rte, the coampny lost money by hedging the operation. The cost of hedging the operation was $24,000.

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