Asinger finds herself with extra $5000 at the end of the year. Calculate the annual rates of return for each of the following investments (rounding to the nearest 0.1% where needed).
a) she can renovate her home to make it more energy-efficient. Doing so will save her on average $100 per month on her energy bills
Rate of return:
b) she has a $12,000 of student loan debt, on which she is charge an annual yield of 6.8%. She could reduce this debt to $7,000
Rate of return:
c) She can loan the money to a relative's business, who promises to pay her back $10,000 in 6 years (Assume this loan is safe - she's 100% certain that she'll be paid back.)
Rate of return:
a) Monthly return = (100/5000) = 2%
Annual return = (1.02)^12 -1 = 26.8%
b) Since the singer will save annual yield is 6.8%, her rate of annual return is 6.8%
c) Rate of return = (10000/5000)^(1/6) -1 = 12.24%
Asinger finds herself with extra $5000 at the end of the year. Calculate the annual rates...
QUESTION: 1 (6 marks) In March 2019 AAR Ltd reported net profits after tax of $500,000 for the year 2018 andannounced that it will pay the annual dividend on 1 June 2019. AAR expects the net profits after tax for 2019 to be 20% higher and it will maintain its current dividend payout ratio of 60%. AAR will pay the annual dividend for 2019 in 1 June, 2020. Karina Adams owns 10% of the ordinary share capital of AAR Pty....
Fleda's Beauty Company has $200,000 of total assets and earns 20 percent interest and taxes on these assets. The ratio of total debts to total assets (or DR been set at 50 percent. The interest rate on short-term debt is 7 percent, while the interest rate on long-term debt is 10 percent. A conservative policy calls for only long-term debt with no short-term debt; an intermediate policy calls for 50 percent short-term debt and 50 percent long-term debt; and an...
1. Alaa works for a pharmaceutical company that has developed a new drug. The patent on the drug will last 17 years. She expects that the drug’s profits will be $2 million in its first year and that this amount will grow at a rate of 5% per year for the next 17 years. Once the patent expires, other pharmaceutical companies will be able to produce the same drug and competition will likely drive profits to zero. What is the...
FISCAL POLICY IN THEORY: March, 2020: we are on the verge of Congress and the President passing legislation that will empower the federal government to spend an unprecedented amount of EXTRA money not seen since World War 2 ---- in order to address the pandemic but also to help cushion the blow financially of perhaps ten or twenty million Americans --- or more --- losing their jobs, and thus suffering a drop in income. The scale of the 2020 recession...
Comprehensive Income Tax Course: Module 1 4. Randy turned 16 last year and had his first summer job. Even though his parents are claiming him as a dependent he wants to file a return in order to get his refund. He receives his W-2 and decides he can do his own return using form 1040-EZ. Which of the following information is not found on a Form W-2? a) The taxpayer’s Social Security number b) The taxpayer’s wages, tips and other...
Read about Cokes strategy in Africa in the article below and discuss the ethics of selling soft drinks to very poor people. Is this an issue that a company like Coke should consider? Africa: Coke's Last Frontier Sales are flat in developed countries. For Coke to keep growing, Africa is it By Duane Stanford Piles of trash are burning outside the Mamakamau Shop in Uthiru, a suburb of Nairobi, Kenya. Sewage trickles by in an open trench. Across the street,...