User Account

All Pages

Estimate the price of the car at the end of six years

Assignment Help Financial Accounting
Reference no: EM131211008

As part of your financial planning, you wish to purchase a new car exactly 6 years from today. The car you wish to purchase costs $11000 today, and your research indicates that its price will increase by 2% to 4% per year over the next 6 years.

A) Estimate the price of the car at the end of 6 years if inflation is 2% per year and 4% per year?

B) How much more expensive will the car be if the rate of inflation is 4% rather than 2%?

C) Estimate the price of the car if inflation is 2% for the next 2 years and 4% for 4 years after that?

Verified Expert

Given PV = 11000$, n=6years If Inflation = r=2% FV= PV * (1+r)n So Value of car after 6 years =

Reference no: EM131211008

Questions Cloud

Determine the genotype of a striped-red-eyed male : In sea bass, the appearance of stripes and red eyes are produced by the dominant alleles S and R, respectively, which are found at two independently assorting loci. At these loci, the genotype ss produces spots, and the genotype rr produces yellow ey..
Homozygous recessive for gene : Jill is heterozygous for gene A and is going to have a child with Jack, who is homozygous recessive for gene. Which of the following offspring genotypes could result from fertilization of a normal haploid sperm with an egg that had undergone non disj..
Short-term profits at the expense of long-term profits : Evaluate the following statement: Managers should not focus on the current stock value because doing so will lead to an overemphasis on short-term profits at the expense of long-term profits.
Return on equity and leverage : Money, Inc., has no debt outstanding and a total market value of $240000 Earnings before interest and taxes, EBIT, are projected to be $28,000 if economic conditions are normal. Calculate return on equity (ROE) under each of the three economic scenar..
Estimate the price of the car at the end of six years : As part of your financial planning, you wish to purchase a new car exactly 6 years from today. The car you wish to purchase costs $11000 today, and your research indicates that its price will increase by 2% to 4% per year over the next 6 years. Estim..
Estimate variable and fixed cost elements of annual cost : Speedy Parcel Service operates a fleet of delivery trucks in a large metropolitan area. A careful study by the company’s cost analyst has determined that if a truck is driven 120,000 miles during a year, the average operating cost is 11.6 cents per m..
Using put-call parity and black-scholes value for the call : Today, there is a European call option written on Microsoft stock that expires in exactly 147 trading days. The option has an exercise price of $40. The current price of Microsoft stock is $42.00. Using put-call parity and the Black/Scholes value for..
Received signing bonuses from their accounting firms : Kristi Collmer and Ray Bergeron each received signing bonuses from their accounting firms today. Kristi received $5,000 immediately. Ray will receive $1,500 at the end of each year for the next 4 years. Assuming a 10% interest rate, who got the bette..
Put the matrix in reduce row echelon form : Put the matrix in reduce row echelon form. The following system of equations is true. Writing this set of equations as an augmented matrix. Solve for.

Reviews

Write a Review

Financial Accounting Questions & Answers

  Prepare an exchange rate forecast

As one of your first assignments as a new hire on the corporate treasurers staff of Global Enterprises, Ltd., you are asked to prepare an exchange rate forecast for the Zonolian ecru (ZOE). Specifically, you are expected to forecast what the spot rat..

  Prepare a classified balance sheet for tricam engineering

Prepare a classified balance sheet for Tricam Engineering at December 31, 2013 using the post-closing trial balance and the additional information provided.

  Rough guide to ethical shopping

Hugely popular nowadays in restaurants and supermarkets, tiger prawns are mostly raised in man-made pools in Bangladesh and the Philippines.

  Developing accounting measurement rules in united states

Briefly describe the organization that is responsible for developing accounting measurement rules (generally accepted accounting principles) in the United States.

  Employees regular-overtime pay using traditional approach

Calculate the employee's regular and overtime pay using the traditional approach, given the following information: normal workweek=40 hours per week. Non-exempt employee is hired for $39,000 per year (eligible for overtime pay). One week works 44 hou..

  Determine the accounts that are affected by the transactions

Using Excel, determine the accounts that are affected by the above transactions and the final balance of each account. (Note: The interest on the construction loan will be applied to the cost of the land.)

  Equivalent units for conversion costs

Baker Corporation uses the weighted-average method in its process costing system. The Assembly Department started the month with 13,600 units in its beginning work in process inventory that were 90% complete with respect to conversion costs.

  Dbms for the most effective result

Different components and models that may be implemented by a DBMS for the most effective result at a particular company. In this assignment

  The ledger of costello company

The ledger of Costello Company at the end of the current year shows Accounts Receivable $122,600, Sales Revenue $847,600, and Sales Returns and Allowances $24,200.

  Describe the appeal procedure

A taxpayer lives in Michigan, in a controversy with the IRS, the taxpayer losses at the trial court level, describe the appeal procedure

  Calculate the non-controlling interest of demers

Find how much does Bell report as Income from Demers for the year ended 31st December, 2011 and calculate the non-controlling interest of Demers at 31st December, 2011.

  Partnership at guaranteed amounts

sales of partners asset to the partnership at guaranteed amounts regardless of market values.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd