(bond valuation relationships) a bond of telink corporation pays $ in annual interest, with a $ par value. the bonds mature in years. the market's required yield to maturity on a comparable-risk bond is percent. a. calculate the value of the bond. b. how does the value change if the market's required yield to maturity on a comparable-risk bond (i) increases to percent or (ii) decreases to percent? c. interpret your findings in parts a and b
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The market's required yield to maturity on a comparable-risk bond is percent.a)The value of the bond is $966.43.
i) the value of the bond decreases to $908.67.
ii) the value of the bond increases to $1111.91.
To calculate the value of the bond, we need to use the bond valuation formula, which is:
PV = (C / r) x [1 - 1 / (1 + r)^n] + (F / (1 + r)^n)
where PV is the present value or the value of the bond today, C is the annual interest payment, r is the yield to maturity, n is the number of years to maturity, and F is the par value.
a. Using the given information, we can plug in the values into the formula:
PV = ($C / r) x [1 - 1 / (1 + r)^n] + ($F / (1 + r)^n)
PV = (in annual interest/(percent/100))x[1−1/(1+(percent/100))
years]+( par value / (1 + ( percent / 100))^years)
Let's assume that the bond pays $50 in annual interest, has a par value of $1000, and matures in 5 years. If the market's required yield to maturity on a comparable-risk bond is 6%, then we can calculate the value of the bond as follows:
PV = ($50 / (0.06)) x [1 - 1 / (1 + 0.06)^5] + ($1000 / (1 + 0.06)^5)
PV = $219.17 + $747.26
PV = $966.43
Therefore, the value of the bond is $966.43.
b. To see how the value of the bond changes when the market's required yield to maturity on a comparable-risk bond increases or decreases, we can simply plug in the new values of r into the formula and calculate the new present value. Let's consider two scenarios:
(i) If the market's required yield to maturity on a comparable-risk bond increases to 7%, then we can calculate the new present value as follows:
PV = ($50 / (0.07)) x [1 - 1 / (1 + 0.07)^5] + ($1000 / (1 + 0.07)^5)
PV = $197.31 + $711.36
PV = $908.67
Therefore, the value of the bond decreases to $908.67.
(ii) If the market's required yield to maturity on a comparable-risk bond decreases to 5%, then we can calculate the new present value as follows:
PV = ($50 / (0.05)) x [1 - 1 / (1 + 0.05)^5] + ($1000 / (1 + 0.05)^5)
PV = $242.35 + $869.56
PV = $1111.91
Therefore, the value of the bond increases to $1111.91.
c. The findings in parts a and b show that the value of the bond is inversely related to the yield to maturity. When the yield to maturity increases, the present value of the bond decreases, and when the yield to maturity decreases, the present value of the bond increases. This relationship between the yield to maturity and the bond's value is known as the bond price-yield inverse relationship. The bond price-yield relationship is important for investors to understand because it helps them to assess the risk and return tradeoff of different bond investments.
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Related Questions
Management is considering two alternatives. Alternative A has projected revenue per year of $100,000 and costs of $70,000 while Alternative B has revenue of $100,000 and costs of $60,000. Both projects require an initial investment of $250,000 of which $75,000 has already been set aside and will be used as a down payment on the project that is chosen. There are also other qualitative factors that management must consider before making a final choice. Which of the following statements is correct about relevant costs and relevant revenues.
A. The only relevant item are the costs as they differ between alternatives
B. The projected revenues are relevant to the decision
C. The sunk cost of $75,000 is relevant
D. The initial investment of $250,000, the projected revenues, and the projected costs are all relevant
Answers
The correct statement about relevant costs and relevant revenues is the initial investment of $250,000, the projected revenues, and the projected costs are all relevant.
In order to determine the profitability of a project, the initial cost of the investment, the projected revenues and projected costs are relevant. These costs and revenue are necessary in calculating the investment's profitability using the capital budgeting methods.
Capital budgeting methods are used in determining the profitability of an investment. Sunk cost are costs that have already been incurred and they cannot be recovered.
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the amount of aid provided to european countries from the marshall plan totaled about
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The amount of aid provided to European countries from the Marshall Plan totaled about $13 billion. This financial assistance was given by the United States between 1948 and 1952 to help rebuild Europe's economies after World War II. The goal was to prevent the spread of communism and support the recovery of war-torn countries.
1. The Marshall Plan was a U.S. initiative to provide economic aid to European countries after World War II.
2. From 1948 to 1952, the United States provided financial assistance to help rebuild Europe's economies and prevent the spread of communism.
3. The total amount of aid provided through the Marshall Plan was approximately $13 billion.
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a company chooses to price its products by value-based pricing. in order for this type of pricing to be most effective, what additional tactics should be included with the price?
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The additional tactics to be included is use of value-based price in conjunction with all elements of the marketing mix communicating value to the customer
Basically, a value-based pricing is a prices fixing strategy based on consumers perceived value of the product in the market
This type of pricing strategy maintains a certain price level to prevent customers from looking out for competitors product.Hence, the additional tactics to be included is elements of the marketing mix communicating value to the customerIn conclusion, the Option B is correct.
The missing option includes "a.) employ a general market approach to pricing which considers what the market as a whole sees as valuable in a product or service b.) use a value-based price in conjunction with all elements of the marketing mix communicating value to the customer c.) offer a middle price point with the established price and tout the singularity of the product’s value"
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What are the benefits of retaining profits?
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Answer:
Retaining profits can have several benefits for a business, including:
1. Reinvesting in the company: By retaining profits, a business can use the money to invest in new equipment, research and development, marketing, or other areas that can help the company grow and become more profitable in the long run.
2. Paying off debt: Retained earnings can be used to pay off debt or other liabilities, which can help improve the company's financial health and creditworthiness.
3. Providing a cushion for unexpected expenses: By retaining profits, a business can build up a reserve of cash that can be used to cover unexpected expenses, such as a major repair, an economic downturn, or a sudden loss of revenue.
4. Rewarding shareholders: Retained earnings can be used to pay dividends or buy back shares of stock, which can help to reward shareholders and increase the value of the company's stock.
5. Maintaining control: By retaining profits, a business can maintain control over its operations and avoid the need to seek external financing, which may come with strings attached such as covenants, interest rates, or loss of control.
Overall, retaining profits can provide a business with financial stability, flexibility, and the ability to invest in growth opportunities, which can help it achieve long-term success.
Hope it helps!an example of a personal skill is
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Answer:
Well, Personal skills refer to the inner abilities. Examples of personal skills include the ability to communicate with others, Leadership skills, or Management skills.
The British government increased the national debt from $75 million to $133 million by borrowing from ________ and British bankers.
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The British government borrowed from the Dutch and British bankers and this increase its national debt from $75 million to $133 million.
What is a national debt?This means the total amount of all debts owed by the government of a country.
These debt are used to service infrastructure, cater expenditure when there are insufficient revenue to cater for such.
Therefore, the British government borrowed from the Dutch and British bankers.
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j.c. penney sells a timex watch for $139.99 that cost $89.97. j.c. penney's percent of markup based on the selling price is:
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J.C. Penney sells a Timex watch for $139.99 that cost $89.97. J.C. Penney's percent of markup primarily based on the selling price is: ($50.02/$139.99 = 35.73%.)
What does JCPenney sell?J. C. Penney Co., Inc. is a holding company, which thru its subsidiary, J. C. Penney Corporation, Inc., engages in the promoting merchandise and offerings to consumers thru its branch stores and website. It presents appliances, handbags, shoes, jewelry, shoes, and clothes.
How is JCPenney doing financially 2022?It now has 650 shops throughout the majority of U.S. states and Puerto Rico. JCPenney estimates its income for the 2022 fiscal 12 months will whole $9 billion, up 10% from 2021 however down 16% from 2019, according to the Wall Street Journal.
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Suppose the value of all the stocks in a fund's portfolio is currently $500,000. The fund has $450,000 in liabilities and has sold 2,500 shares of its fund to investors. Find the NAV.
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Answer:
Well your currency will come up due to the investors only if it is a great good market platform The liabilities you must take time to pay them back it might cause interest and money building vlaues or taxes or possibly jail time
Explanation: I really hope i helped
If he fund has $450,000 in liabilities and has sold 2,500 shares of its fund to investors. The NAV is $20.
Net asset valueUsing this formula
NAV = (Assets - Liabilities) / Total number of outstanding shares
Let plug in the formula
NAV=($500,000-$450,000)/2500 shares
NAV=$50,000/2500 shares
NAV=$20
Therefore the net asset value is $20.
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Two friends want to open a clothing consignment store. Individuals bring clothing to the consignment store and if the clothes sell, the consignment shop earns 60% and the customer receives 40% of the sale. What are the advantages of this type of business over other retail stores? Explain the advantages and disadvantages of operating this business as a sole proprietorship and a partnership
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Answer:Some advantages of a consignment store are that if your your item sells both you and the business benifit. A disadvantage of a consignment store is that if the item doesnt sell the business doesnt profit and neither does the person who brought in the item. At other retail stores even if your item doesnt sell you still get the money but you dont get the item back so that could be an advantage or disadvantage.
Explanation:Some advantages of being a proprietorship and owning a consignment store is that you would get to keep all of the 60% sold of all profits.
A dsadvantage of being in a partnership and owning a consignment store would be that you would you would have to spilt the 60% with who ever you are partners with.
What are some ways that technology could be used to benefit learners of a culture?
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Answer:
Removes cultural and language barriers.
For students who may struggle to fit in, technology tools provide a way to engage and equalize—web tools, cameras, word processors, software, can help create opportunities for independence and inclusion.
Explanation:
hope it will help you have a great day bye:)
What is an appraisal? Why is it usually included in the closing costs for buying a home?
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The procedure through which a real estate evaluator attempts to discover the fair market value of a home is called a home appraisal. They are frequently used to calculate property taxes, appraisals are typically required in regions.
What is the closing cost?Additional expenses and charges that must be paid at the end of a transaction in real estate that is not included in the property's purchase price is referred to as Closing cost.
A home appraisal is employed to determine a property's worth. Lenders impose these fees in exchange for approving your loan.
Prior to comparing a home to actually acquired properties in the local housing market, licensed real estate evaluators to look at its features and state.
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you decide to take $500 out of your piggy bank at home and place it in the bank. if the reserve requirement is 2 percent, how much can your $500 increase the amount of money in the economy?
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Your $500 deposit has the potential to increase the amount of money in the economy by up to $25,000, through the process of money creation and the money multiplier effect, assuming the maximum amount of loans are made by the bank's excess reserves.
When you deposit your $500 into a bank, the bank is required to hold a certain percentage of that deposit in reserves, as mandated by the reserve requirement set by the central bank. In this case, if the reserve requirement is 2 percent, then the bank is required to hold 2% of your $500 deposit, which is $10, in reserve.
The remaining $490 of your deposit becomes part of the bank's excess reserves, which can be used to make loans or investments. This means that your $500 deposit has the potential to increase the amount of money in the economy by a multiple of its initial value, through the process of money creation.
When banks make loans, they create new money in the economy. This is because the borrower now has the loan proceeds, which they can spend and circulate in the economy, while the bank's reserves remain intact. Assuming that the bank makes loans equal to the maximum amount allowed by its excess reserves, the money multiplier effect can be calculated as follows:
Money Multiplier = 1 / Reserve Requirement = 1 / 0.02 = 50
This means that your $500 deposit has the potential to increase the amount of money in the economy by up to 50 times its initial value, or $25,000. However, the actual amount of money created will depend on the willingness of borrowers to take out loans, and the ability of banks to find creditworthy borrowers.
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How are volatility and risk related in an investment?
A.
a volatile investment is less risky
B.
a volatile investment is more risky
C.
volatility and risk are not related
Answers
The terms volatility and risk are related in an investment because a volatile investment is more risky. The Option B is correct.
What is a volatile investment?Basically, the term volatility describes when a market or security experiences periods of unpredictable and sometimes sharp, price movements. Most People often think of volatility only when prices fall, however volatility can also refer to sudden price rises too.
Most of the Increased market volatility are caused by economic or policy factors including changes in other markets, interest rate hikes, and the Fed's current monetary policy. A political instability can also lead to market volatility.
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What is the danger of having a lot of debt?
(brainlyest)
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Answer:
probably not paying it off in time or something
Explanation:
I immediately need help with this please help me someone please solve it for me it’s pretty urgent if u write unnecessary things I’ll report so pleasee
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Hello there ☺️,
Please check the attached image of the answer.
By Benjemin ☺️
similarities between large scale and small scale retailers
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These are the organisations that buy and resell products to other resellers like retailers, other merchants or to industrial buyers, and not in significant amount to end users. They take title to the products they trade in. They buy the products in large quantities and break down the bulk basis the requirement for distribution to retailers, etc. They provide range of services to buyers as well as manufacturers like transportation, buying on credit, etc.
2) Retailers –
Retailers sell products/ goods to final consumers for consumption or use. Retailers buy the products from different sources like manufacturers, wholesalers, traders, etc. basis the need and want in the market. They are considered the final link with the consumer in the marketing/ distribution channel. Most of the retailing in retail stores though new concept of retailing called non-store retailing is becoming popular. It is direct selling to customers via infomercials, telecalling, internet selling, ecommerce, direct mail, personal selling, etc.
explain the process involve in forming a company.
include these points:
1. Often require more time and legal works.
2. Need to complete all required documents such as ARTICLE OF ASSOCIATION and MEMORANDUM OF ASSOCIATION.
3. Once all document is ready, the register of the company issues the Certification of incorporation.
4. Certification of incorporation certifies the legal status of the company and allows to start trading.
Answers
Forming a company involves a number of steps and can often require more time and legal work than other types of business structures. Here are the steps typically involved in forming a company:
How to fporm companyChoose a Business Name: The first step is to choose a business name that is not already in use by another company. It's important to conduct a search to ensure the name is not already taken.
Decide on Company Structure: The next step is to decide on the legal structure of the company, such as a corporation, LLC, or partnership.
Prepare the Required Documents: Once the structure has been chosen, the required documents such as ARTICLE OF ASSOCIATION and MEMORANDUM OF ASSOCIATION must be completed. These documents outline the purpose of the company, its ownership structure, and other important details.
File Documents with the Register of Companies: The completed documents must then be filed with the register of the company in the jurisdiction where the company is to be incorporated. This requires paying a fee and providing additional information about the company, such as the names and addresses of directors and shareholders.
Certification of Incorporation: Once all the required documents have been submitted and approved, the register of the company issues a Certification of Incorporation. This certificate certifies the legal status of the company and allows it to start trading.
Obtain Business Licenses and Permits: Depending on the type of business and the jurisdiction, the company may also need to obtain additional licenses and permits before it can begin operating legally.
Overall, forming a company involves a significant amount of legal work and documentation, but it provides the benefit of limited liability and can make it easier to raise capital and attract investors.
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what activities does marketing involve besides selling?
Answers
Answer:The activities involved in marketing are
Product and Service Selection. A manufacturer or service provider ideally listens to its customers and prospects before making product and service decisions.
Product or Service Pricing
Product Placement Activities
Incentives and Promotional Activities.
Explanation:
what is e-mail communication is most suited for?
a.assessing commitment to a project.
b.building consensus among disputing parties.
c.mediating a conflict between multiple parties.
d.communicating routine information.
Answers
The following situations are best handled via email communication : d. exchanging routine data. Updates, notifications, and other types of non-urgent information can be effectively shared with a large audience via email.
What exactly do you understand by email correspondence?This is due to the fact that technology makes it simple to document, distribute, and access crucial information without the need for face-to-face or real-time communication.
Email (or else electronic mail) is the term used to describe the transmission of computer-stored data across the internet from one person onto one or more recipients. Emails are a quick, easy, and cost-effective way to communicate for personal as well as professional uses.
Unlike messages, in-person meetings, even online virtual meetings, email frequently only allows for one-way communication, so it does not permit a simple instant exchange of ideas.
Email is essential for communication since it enables people to communicate information in the form of letters and may even replace conventional mail delivery systems.
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Jessi has received a loan to start her new bakery. She wants to make sure that she spends the money wisely, getting all of the machinery, tools, and ingredients that she will need to make her bakery a success. What should Jessi make FIRST to make to make sure to manage her money so that she prioritizes what she needs for her bakery?
buying plan
sales forecast
profit margin
investment
Answers
Since Jessi has received a loan to start her new bakery, and he wants to make sure that she spends the money wisely, getting all of the machinery, tools, and ingredients that she will need to make her bakery a success. What she should make FIRST to make sure to manage her money so that she prioritizes what she needs for her bakery is a "buying plan" (Option A)
What is the definition of a "Buying Plan"?A buying plan, sometimes known as a buying club, is a sort of plan that obligates a buyer to purchase products on a fixed timetable, to acquire items that a seller may deliver without warning, or to pay membership fees in exchange for the right to purchase at a supposedly discounted price.
Goods planning and procurement is a systematic strategy used by retailers to predict merchandise inventory requirements and negotiate the best terms with suppliers.
Typically, retailers employ a centralized buyer or team of buyers that supervise the chain's purchasing process. They may have additional local or regional merchandise managers that supervise merchandise implementation in stores.
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Consider the attached table which gives labor requirement coefficients used in the production of any and Cares for Home and foreign countries. Based on the white trade patterns for the Home and Foreign country Country Labor Coeniciant Laborcon for Candy for Cake Houl 3 origen a Foreign will export Candy and import cake Ob Foreign will export cake and import candy Oc Home will export candy and import cake d. Home will export cake and import candy e Both (a) and (d) are true
Answers
Based on the given information and trade patterns, the correct option is E - Both (a) and (d) are true. This means that both the foreign country will export candy and import cake (Option a) and the home country will export cake and import candy (Option d).
According to the labor requirement coefficients, the foreign country has a lower labor coefficient for candy production compared to the home country. This indicates that the foreign country has a comparative advantage in candy production and is likely to export candy. On the other hand, the home country has a lower labor coefficient for cake production, suggesting a comparative advantage in cake production and a likelihood of exporting cake.
Based on these comparative advantages, the trade patterns emerge. The foreign country will export candy (Option a) and import cake, while the home country will export cake (Option d) and import candy. This reflects the principle of comparative advantage, where countries specialize in producing goods in which they have a lower opportunity cost, resulting in mutually beneficial trade.
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Commercial hotels are usually in downtown or _____________ districts.
Answers
Answer:
buisness
Explanation:
35 points!!!111
Outlining involves arranging topics or ideas in relationship to each other. Please select the best answer from the choices provided T F
Answers
Answer:
TRUE
Explanation:
Answer:
Honestly, you're lying about the 35 points thing...
But the answer is TRUE
anybody got food stamps
Answers
Answer: yeah, I do. Also, Happy holidays! or in Hawaiian we say Mele Kalikimaka which means Merry Christmas! I'm part Hawaiian.
which of the following statements about counterproductive behaviors is true? multiple choice question. counterproductive behavior is problematic only in large organizations with many employees. poor performers are more likely to turn to bullying. employees who engage in one form of counterproductive behavior frequently engage in others. there is a strong positive correlation between task performance and counterproductive behavior.
Answers
The true statement about counterproductive behaviors are counterproductive behavior is problematic only in large organizations with many employees.
poor performers are more likely to turn to bullying. employees who engage in one form of counterproductive behavior frequently engage in others.Option A , B , C are correct .
Counterproductive behaviour :Employee voluntary actions that harm organizations or employees are referred to as counterproductive work behavior. Destroying company property, calling in sick when not sick, insulting another employee, and stealing from the employer are all examples of CWB behaviors.
What causes behavior that is counterproductive?Environmental factors, a lack of training, employee personality and life changes, and external factors can all play a role in counterproductive work behavior. In the workforce, CWB is identified and categorized using typologies.
What is the significance of counterproductive work habits?Businesses may not be able to achieve their objectives or increase profits if they engage in counterproductive work behaviors. Organizations suffer as a result of CWB, which is why this idea is becoming more important.
Complete question is given below :
which of the following statements about counterproductive behaviors is true? multiple choice question.
A. counterproductive behavior is problematic only in large organizations with many employees.
B. poor performers are more likely to turn to bullying.
C. employees who engage in one form of counterproductive behavior frequently engage in others.
D. there is a strong positive correlation between task performance and counterproductive behavior.
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what is the biggest health concern for employees of this company when it comes to technology
and what is a strategy the company could put in place to lower this risk?
Yelppp
Answers
Answer:Robots replace humans
Explanation:tjeteare will always remains some jobs woch can be done only by human hand.
The buyer of an industrial complex wants the broker to place the earnest money in an interest bearing account. The broker does this, clearly identifying all parties who are to receive the interest and the date the earned interest is to be disbursed. With only the verbal consent of the buyer, he places the money in an insured account in a depository in Florida. When the time comes to disburse the account, the broker will write a check to the buyer for the interest as the buyer agreed. Which statement describing this situation applies?
Answers
Answer:
Explanation:
In this situation, the statement that would best apply would be that the broker does not have the right to ever use an interest-bearing account under Florida Real Estate laws. Since Florida Real Estate laws specifically prohibit a broker from placing a clients money in an interest account then the broker in this scenario is breaking the law and can have his real estate license taken away as well as being fined.
Which of the following is not one of the reasons for financial failure? A. Ignorance of current tax laws B. Failure to establish definite goals C. Procrastination D. Investments in mutual funds
Answers
Ignorance and procrastination of anything could lead to failure.
Investments in mutual funds is not one of the reasons for financial failure. Hence, option D is correct.
What is Investments in mutual funds?A mutual fund is a business that collects money from many different sources and uses it to buy securities like stocks, bonds, and short-term loans. All of a mutual fund's holdings are referred to as its portfolio. Investors buy shares of mutual funds.
Mutual funds are typically seen as safe investments with little risk and a great method for investors to diversify. When it comes to fees, a mutual fund might not always be the greatest choice for a market participant.
Although there are many different types of mutual funds, most of them fall into one of four basic categories: stock funds, money market funds, bond funds, and target-date funds.
Thus, option D is correct.
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Assume your gross pay per pay period is $5,200.00 and you are in the 33 percent tax bracket. Calculate your net pay and spendable income if you save $520.00 per pay period in a tax-sheltered annuity. (Do not round intermediate calculations. Round your answers to the nearest whole dollar.) Answer is complete but not entirely correct. Net Pay & Spendable Income $ 3,484 $ 2,964 Net pay Spendable income
Answers
Answer:
To calculate the net pay and spendable income , we need to first find out the tax amount deducted from the gross pay.
Tax amount = gross pay * tax rate = $5,200.00 * 0.33 = $1,716.00
Net pay = gross pay - tax amount - saving amount = $5,200.00 - $1,716.00 - $520.00 = $2,964.00
Spendable income = net pay + saving amount = $2,964.00 + $520.00 = $3,484.00
Therefore, the net pay is $2,964.00 and the spendable income is $3,484.00. Remember to round the answers to the nearest whole dollar.
Explanation:
The main function of a high-risk investment is to:
A. make sure that an investment does not lose money.
B. make a variety of investments to balance risk and reward.
C. protect an investment from government fees and taxes.
D. quickly earn as much return on investment as possible.
Answers
The main function of a high-risk investment is that one quickly earn as much return on investment as possible.
The advantages of high risk investments are:
Investors can earn huge returns in a very short period of time Investor are able to purchase and sell the securities with ease.Investors can earn capital gains as well as dividends on their investments.The reason for investment is for profit or returns. it often involves risk.
Conclusively, Every investor invests with a specific objective at heart, and most investment has its own unique set of benefits and risks.
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