A business is deciding whether to give an end-of-year bonus of $5000 each year for the next four years to an employee, in order to increase the number of sales that employee makes. What is the minimum extra profit the employee must generate this year for the bonus to beworthwhile over the next four years, if the discount rate is 7%?O A. $18,600OB. $16,936OC. $12,263O D. $14,480OE. $20,000

End of year bonus (B) = $5,000 Bonus period (p) = 4 years Discount rate (r) = 0.07 Present value…

Answered: A business is deciding whether to give…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

See similar textbooks

Similar questions

Maddy works at Burgers R Us. Her boss tells her that if she stays with the company for four years, she will receive a bonus of $5,000. With an annual discount rate of 7%, calculate the value today of receiving $5,000 in four years. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use appropriate factor(s) from the tables provided. Round your answer to 2 decimal places.)
Your employer is now offering a matching program for employees who participate in the corporate 401(k) plan. If you contribute 6% of your gross income to the account monthly, your employer will match your contribution. If you make $4000 per month, how much will be in your account after 40 years if you can average 7% APR. A. $5,647,090.80 B. $1,259,898.25 C. $23,465.46 D. $2,823,545.40
A business acquaintance promises to deliver a $20 bill to you one year from today. How much should you be willing to pay today for this promise? A) Less than $20 B) More than $20 C) Exactly $20
Question Help ▼ Credit terms. As manager of Fly-by-Night Airlines, you decide to allow customers 90 days to pay their bills. To encourage early payment, though, you allow them to reduce their bills by 2.1% if they pay within the first 23 days. At what implied effective annual interest rate are you loaning money to your customers? What if you extend the discount to 77 days and allow full payment up to 180 days? At what implied effective annual interest rate are you loaning money to your customers? 1 % (Round to two decimal places)
You need a quick loan and decide to use the local "payday" loan office. The loan is for $800 and you pay it back 13 days later. You end up paying them back $1025. Assume the company compounds interst on a DAILY basis.. la. What is the effective interst rate per year? 1b. What would you owe if you kept the money for 1 year? please show work on excel
Economics Q: A company spends $40 acquiring each customer. Each month, the customer buys services worth $5, which cost the company $4. On an average a customer is expected to stay with the company for five years. What is the CLV in this case assuming zero percent interest rate? a. Negative $200 b. $260 c. $300 d. $20
View Policies Current Attempt in Progress Carla Vista Cosmetics management is setting up a line of credit at the company's bank for $5 million for up to two years. The interest rate is 6.30 percent and the loan agreement calls for an annual fee of 63 basis points on any unused balance for the year. If the firm borrows $2.8 million on the day the loan agreement is signed, what is the effective rate for the line of credit? (Roûnd answer to 2 decimal places, e.g. 12.25%.) Effective interest rate eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer
6. Homes-R-Us is offering free credit on a new $200,000 home. You pay $40,000 down and then $16,000 a year for the next 10 years. We-Build'em-Better does not offer free credit but will give you $40,000 off the list price. a. If the discount rate is 5% per year, which company is offering the better deal? b. If the discount rate is 8% per year, which company is offering the better deal? Compare your answers to (a) and (b). Why do you think you are getting those results? c.
Question 8. Jacqui decides to open her own business and earns $50,000 in accounting profit the first year. When deciding to open her own business, she withdrew $20,000 from her savings, which earned 5 percent interest. She also turned down three separate job offers with annual salaries of $30,000, $40,000, and $45,000. What is Jacqui's economic profit from running her own business? a. $-56,000 b. $-6,000 c. $4,000 d. $19,000
An employee is 25 years old and starting a 401k plan. The employee is going to invest $150 each month. The account is expected to earn 5.5% interest, compounded monthly. What is the account balance, rounded to the nearest dollar, after two years?A spreadsheet was used to calculate the correct answer. Your answer may vary slightly depending on the technology used. $3,976 $3,796 $6,675 $6,765
Future amount Length Rate Rate desired of time compounded used 7 years 20 years 2% semiannually 4% annually 1. $ 9,000 2. $20,000 3. Bill Blum needs $40,000 6 years from today to attend V.P.R. Tech. How mucia must Bill put in the bank today (8% quarterly) to reach his goal? 4. Bob Fry wants to buy his grandson a Ford Taurus in 4 years. The cost of a car will be $28,000. Assuming a bank rate of 4% compounded quarterly, how much must Bob put in the bank today?
You have to decide whether or not to participate in the employer match program at your work. If you place 8% of your gross pay into a retirement account, your employer will match it. You plan to retire in 30 years. You expect to earn 6% return on your investment. How much will you have in the account if your average annual gross salary is $50,000? A. $316,232.80 B. $22,973.96 C. $45,947.92 D. $632,465.60 Using the same information as the previous question, assume that you want to increase your portion of the contribution to 10%. The employer will only match up to 8%. How much would you have in this situation? A. $692,523.80 B. $711,523.80 C. $316,232.80 D. $632,465.60

SEE MORE QUESTIONS

Recommended textbooks for you

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Essentials Of Investments

Finance

ISBN:

9781260013924

Author:

Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:

Mcgraw-hill Education,

FUNDAMENTALS OF CORPORATE FINANCE

Finance

ISBN:

9781260013962

Author:

BREALEY

Publisher:

RENT MCG

Financial Management: Theory & Practice

Finance

ISBN:

9781337909730

Author:

Brigham

Publisher:

Cengage

Foundations Of Finance

Finance

ISBN:

9780134897264

Author:

KEOWN, Arthur J., Martin, John D., PETTY, J. William

Publisher:

Pearson,

Fundamentals of Financial Management (MindTap Cou…

Finance

ISBN:

9781337395250

Author:

Eugene F. Brigham, Joel F. Houston

Publisher:

Cengage Learning

Corporate Finance (The Mcgraw-hill/Irwin Series i…

Finance

ISBN:

9780077861759

Author:

Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor

Publisher:

McGraw-Hill Education

SEE MORE TEXTBOOKS