Calculate the annual cash flows of a $100,000, 10-year fixed-payment deferred annuity earning a guaranteed 3.6 percent per year if annual payments are to begin at the end of year 4 (beginning of year 5). (Hint: Grow the original investment for 4 years and then all payments are paid at the beginning of the year.)

Answer:

D

Explanation:

types of unemployment

structural unemployment is an unemployment that occurs as a result of changes in the economy. These changes can be as a result of changes in technology, polices or competition. Structural unemployment tends to be permanent.  

The geologist lost his hob permanently due to increase in wages (polices)

Frictional unemployment:  the period of time a person is unemployed from the period he leaves his current job and the time he gets another job. Eg. when a real estate agent who leaves a job in Texas and searches for a similar, higher-paying job in California.

Voluntary unemployment: e.g. worker at a fast-food restaurant who quits work and attends college.

Cyclical unemployment: it occurs as a result of fluctuations in the economy. Unemployment would be high in a downturn and low in a boom  

Final answer:

Cyclical unemployment arises when business activity in the macroeconomy declines. It is directly linked to the ups and downs in the business cycle. When the economy moves into a recession, cyclical unemployment increases as businesses lay off workers.

Explanation:

Cyclical unemployment arises when: business activity in the macroeconomy declines. This is option D. It refers to the unemployment which is caused by the ups and downs in the overall economy, a phenomenon known as the business cycle. When the economy enters into a recession or contractionary phase, overall demand decreases, and businesses lay off workers as a result leading to an increase in unemployment. This is known as cyclical unemployment.

On the other hand, when the economy is in an expansionary phase, businesses are typically doing well and unemployment levels decrease as businesses hire more workers to meet the increased demand. Therefore, cyclical unemployment is directly related to the health of an economy.

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Answer:

The  Expected Earning for the college graduates is 40,000

Explanation:

The Expected Earning for a college alum with a four year college education in financial matters is determined as weighted normal all things considered, utilizing likelihood of every result as its weight.  

Although the Expected Earning is;  

Expected Earning = (25% × 30,000) + (50% × 40,000) + (25% × 50,000)  

Expected Earning = 0.25 × 30,000 + 0.5 × 40,000 + 0.25 × 50,000  

 Expected Earning = 7500 + 20,000 + 12,500

Expected Earning = 40,000

Answer:

1.a- The minimum transfer price will be the marginal cost of the unit thus, the variable cost of 1.25

1.b- the maximum transfer price should be the market price as the company cannot price the units above this cost.

2.a- No as it is including a fixed cost component which is already incurred(sunk cost)

2.b- Yes I will as it is above the 1.25 variable cost which is the cost the division will face to produce the units

3.- full manufacturing cost will include the fixed cost therefore:

  1.25 variable cost

+ 0.70 fixed cost

  1.95 manufacturing cost

Explanation:

Final answer:

The Glassware Division would accept a minimum transfer price of $1.37 (variable cost plus saved selling costs). The Bottled Water Division would pay up to the external market price of $2.95. An internal transfer is feasible and profitable if the transfer price is within this range. Understanding idle capacity, the Glassware Division might still accept Justin's counteroffer of $2.40, which covers their variable costs.

Explanation:

The minimum transfer price that the Glassware Division would be willing to accept is the unit variable cost of $1.25 plus the saved selling costs of $0.12, equating to $1.37 per unit. The Bottled Water Division would be willing to pay at most the external market price of $2.95 per unit. An internal transfer should take place if the transfer price falls within this range.

Knowing the Glassware Division has idle capacity, Justin might agree to a transfer price of $2.89. However, even if Justin counters with an offer of $2.40, Ellyn might still be interested because this price covers their variable cost, contributes towards fixed costs, and utilizes idle capacity.

If all internal transfers take place at full manufacturing costs, the transfer price would be the sum of the unit variable cost ($1.25) and unit product fixed costs ($0.70), totaling $1.95 per unit. Transfer pricing decisions affect a firm's profitability and operations, and should carefully consider the interests of both divisions.

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Answer:

If the price level in China is rising faster than the price level in the US, this means that the Chinese inflation rate is higher.

two different things will happen here:

1) higher inflation means that Chinese products will be more expensive which will increase the demand for American products. An increase in the demand for American products will appreciate the US dollar, but...

2) Inflation all by itself generally would not alter the exchange rate, but high inflation generally leads to high interest rates. Central banks usually increase interest rates to decrease inflation.

Higher interest rates will usually increase the demand of a currency which result in an appreciation of the local currency against foreign currencies. In this case, the Chinese yuan should appreciate against the US dollar.

Generally the appreciation of a currency due to high interest rates will offset the depreciation due to a negative trade balance.

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

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