Your job pays you only once a year for all the work you did over the previous 12 months. Today, December 31, you just received your salary of $65,000, and you plan to spend all of it. However, you want to start saving for retirement beginning next year. You have decided that one year from today you will begin depositing 5 percent of your annual salary in an account that will earn 10 percent per year. Your salary will increase at 4 percent per year throughout your career. How much money will you have on the date of your retirement 40 years from today?

Q: You would like to buy a house that is currently on the market at $85,000, but you cannot afford it…

A: given, present value of house = $85000 inflation rate = 5% able to buy the house after 4 years

Q: I have a restaurant, but I don't know what demand will be next year. I need to decide whether to…

A: 1) Expected value of expanding if you expand EMV= sum of (probability of event) = (0.20 x…

Q: Well-known financial writer Andrew Tobias argues that he can earn 177 percent per year buying wine…

A: The cost of a case of wine is 10 percent less than the cost of 12 individual bottles, so the cost of…

Q: There are three investments, B1, B2 and B3. All of them have the same expected value and each with…

A: Given data is

Q: The finance function is primarily interested in the relationship between the risks of investments…

A: It is a true statement.

Q: Yalena Yale has always been proud of her personal investment strategies and has done very well over…

A:

Q: Suppose you are an HR (human resources) manager at a big university, and you sense that the…

A: As an HR manager at a big university, it will create a great responsibility to cope up with the…

Q: he probability that a mobile phone is stolen in an electronic shop is 0.0008. If 8500 mobile phones…

A: Quality refers to the degree of excellence of something. Quality has some standard on the basis of…

Q: Suppose you want to invest a maximum amount of $20,000 in a portfolio with the objective to maximize…

A: note: only formulation has been asked.

Q: In this question assume all dollar units are real dollars in billion; for example, $250 means $250…

A: The detailed solution is given in Step 2.

Q: In an economy, the capital share of GDP is about 30 percent, the average growth in output is about 3…

A: Below is the solution:-

Q: Suppose savers either buy bonds or make deposits in savings accounts at banks. Initially, the…

A: A budget deficit is a situation when the country’s expenditure increased from its revenue.

Q: The Schoch Museum (see Problem 30 in Chapter 11) is embarking on a five-year fundraising campaign.…

A: Donation refers to the instance of act concerning which a contribution, grant or gift is being…

Q: You own a coffee shop in a metro Toronto shopping mall. It is Friday evening and you are trying to…

A: We have to find the value of payoff for quality baked(Q)+demand(D) by using below formula

Q: A company faces an annual demand for 80,000 silk shirts. The holding cost is $1.60 per shirt & year,…

A: It is actually EOQ problem, we have following data, these are Annual Demand, Holding cost per shirt…

Q: You are also given the following table of average returns over the last 50 years: Stocks T-Bonds…

A: (a) Utilizing the historical methodology, the estimate to calculate risk premium for Steel Products…

Q: What kind of a part does linear programming play in the process of making financial decisions?

A: Linear programming is a mathematical tool used to find optimal solutions such that the solution…

Q: Your mom will lend you money so long as you agree to pay her back within five years and you offer to…

A: Borrowed amount will be the present value of cash flow at a discount rate of 5%.

Q: Oliver has come of age and now has access to a very substantial trust fund. The trust fund allows…

A: Using without perfect information, the expected value is computed here as:E(Open in San Francisco) =…

Q: Suppose that $100 is invested at the beginning of a year. Which (if either) of the following methods…

A: Interest is the additional amount received over the basic principle. This amount is decided by the…

Q: Your sister and her fiancé are planning on getting engaged (and later married) in the future.…

A: By looking at the above diagram we can pull out the below equation:

Q: In an economy, the capital share of GDP is about 30 percent, the average growth in output is about 3…

A: In order to answer the questions, we first must emphasize facts about the US economy. Cobb-Douglas…

Q: I own a single share of Wivco stock. I must sell myshare at the beginning of one of the next 30…

A:

Q: A person wants to invest in one of three alternative investment plans: stocks, bonds or a savings…

A: Following is the given information:

Q: A local finance company quotes a 16 percent interest rate on one-year loans. So, if you borrow…

A: The timeline is:   To find the APR and EAR, we need to use the actual cash flows of the loan. In…

Q: Consider a consumer that lives only for two periods. He works in period 1 (and gets income Y1) and…

A: We can say that where current consumption is solely dependent on current income, according to…

Q: During the first year software will be purchased from a reputable vendor for $3,000,000. An internal…

A: Formula used- ROI or return on investment= Net Income / Total Invetment.

Q: A company that manufactures air-operated drain valve assemblies currently has $110,000 available to…

A: given values, Rate = 10% (NPMT) no of periods =5 FV = 0

Q: Today is your 20th birthday. Your parents just gave you $5,000 that you plan to use to open a stock…

A: Birthday Contribution 20th 5000 21st 500 22nd 500 23rd 500 24th 500 25th 500 (5,000)…

Q: In the context of capital budgeting, risk refers to Select one: a. the chance that the internal…

A: Capital budgeting is the process an organization uses to determine whether a business’s potential…

Q: You are thinking of starting Peaco, which will produce Peakbabies, a product that competes with Ty’s…

A:

Q: Investment A woman invests $360,000 in three different mutual funds. One averages 12% per year,and…

A: Let, X1 be the investment on the 1st mutual fund X2 be the investment on the 2nd mutual fund X3 be…

Q: You are thinking of starting Peaco, which will produce Peakbabies, a product that competes with Ty's…

A:

Q: Suppose an investor has the opportunity to buy the followingcontract, a stock call option, on March…

A: The following decision tree shows the problem in the most illustrative manner. The optimal…

Q: Nippon Steel's expenses for heating and cooling a large manufacturing facility are expected to…

A: Computation of Present Worth Year Cash Flow ($) PV Factor @11% Discounted Cash Flows ($)   (A)…

Q: Assume that you recently graduated and have just reported to work as an investment advisor at the…

A: Corporation- A corporation is a legally distinct and separate entity from its founders. Corporations…

Q: How long will it take $12,000 to grow to $19,000 if the investment earns interest at the rate of…

A: WE WOULD USE THE FORMULA OF COMPOUND INTEREST HERE. IT IS THE INTEREST WHIC IS ADDED OVER PRINCIPAL…

Q: You own Amazon stock. Suppose that Amazon has an expected return of 52% and a volatility of 19%. The…

A: SD(RxCML) = xSD(RMkt).23 = x(.16) → x = .23/.16 = 1.4375, so long 144% market and short 44%…

Cash Outflow

The term "cash flow" basically means the flow of money in and out of business. The cash flow usually takes place from operational, investing, and financing activities. The cash flow normally denotes the amount of cash that is transferred either into the business as positive cash flows or out of business as expenses with regards to operating, investing, and financing activities.