The benefit of effective interest method amortization for financial assets and financial liabilities is that it provides a more accurate and consistent way of calculating the interest income or expense over the life of the financial asset or liability.
The effective interest method (EIM) amortization helps match the timing of the payments for interest expenses and interest income over the life of the asset or liability. This helps ensure that the financial institution accurately reflects the income from the asset or liability in its financial statements.
This method takes into account the fact that the interest rate may change over time, and ensures that the interest income or expense is accurately reflected in each reporting period. This helps companies to better understand their financial position and make more informed decisions. Additionally, using the effective interest method can help companies to comply with accounting standards and regulations, as it is generally considered to be the most appropriate method for calculating interest income or expense.
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you've been assigned the task of organizing a meeting for your class to discuss important project in one of your major subject.
question:
1. how do context audience and purpose influence your decisions?
2.write a brief statement explaining what you want in your meeting in terms of time, location, setting,and scene. explain why.?
1. When organizing a meeting for a class to discuss important projects in one of your major subjects, the context, audience, and purpose of the meeting will influence your decisions.
2. In my meeting, I would like the setting to be comfortable and conducive to collaboration, so I would choose a location with plenty of natural light, comfortable chairs, and a whiteboard or other materials for taking notes.
Context refers to the overall environment of the meeting, such as the location, the time of day, and other aspects of the setting that could affect the outcome of the meeting.
The audience should also be considered; is the meeting intended to be a collaborative effort or will it be a presentation? Lastly, the purpose of the meeting should be clearly defined so that everyone in attendance is on the same page and can work towards a shared goal.
The time should be decided based on when the majority of the class is available, and the scene should be professional but still relaxed so that everyone is encouraged to participate. By taking the context, audience, and purpose into consideration, I am setting the stage for a successful meeting.
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What is the present value of $2,000 paid at the end of each ofthe next 57 years if the interest rate is 9% per year?
The present value of $2,000 paid at the end of each of the next 57 years if the interest rate is 9% per year is $21,969.56.
The present value of $2,000 paid at the end of each of the next 57 years if the interest rate is 9% per year can be calculated using the formula for the present value of an annuity:
PVA = (PMT / i) x (1 - (1 / (1 + i)ⁿ))Where PVA is the present value of the annuity,
PMT is the periodic payment,
i is the interest rate per period,
and n is the number of periods.In this case,
PMT = $2,000, i = 0.09, and n = 57.
Plugging these values into the formula,
we get:PVA = ($2,000 / 0.09) x (1 - (1 / (1 + 0.09)⁵⁷))PVA = $22,222.22 x (1 - (1 / 86.8146))PVA = $22,222.22 x (1 - 0.0115)
PVA = $22,222.22 x 0.9885PVA = $21,969.56
Therefore, the present value of $2,000 paid at the end of each of the next 57 years if the interest rate is 9% per year is $21,969.56.
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Note: The complete question would be as bellow,
What is the present value of $2,000 paid at the end of each of the next 57 years if the interest rate is 9% per year?
Explain two influences on whether demand for a product is price elastic or price inelastic
Answer:
The price elasticity of demand (PED) is a measure of how responsive the quantity demanded of a product or service is to changes in its price. A product is considered price elastic if a change in price causes a proportionately larger change in the quantity demanded, and price inelastic if a change in price causes a proportionately smaller change in the quantity demanded. There are many factors that can influence the price elasticity of demand for a product, but two important ones are:Availability of substitutes: The availability of substitutes refers to the extent to which consumers can switch to alternative products or services if the price of a particular product increases. If there are many close substitutes available, consumers are likely to be more price sensitive, because they have options to choose from if the price of the product they prefer increases. This means that the PED for the product is likely to be higher. On the other hand, if there are few or no close substitutes available, consumers are likely to be less price sensitive, because they have fewer options to choose from if the price of the product increases. This means that the PED for the product is likely to be lower.Necessity or luxury good: Whether a product is considered a necessity or a luxury good can also influence the price elasticity of demand. Necessity goods are products or services that are considered essential for consumers, such as food, housing, or healthcare. Luxury goods, on the other hand, are products or services that are considered non-essential or discretionary, such as high-end fashion, jewelry, or entertainment. Consumers are generally less price sensitive when it comes to necessity goods, because they are less able or willing to reduce their consumption of these goods even if the price increases. This means that the PED for necessity goods is likely to be lower. On the other hand, consumers are generally more price sensitive when it comes to luxury goods, because they have more flexibility to reduce their consumption of these goods if the price increases. This means that the PED for luxury goods is likely to be higher.
Explanation:
I'm just right
If someone gives you $5,000 to do a job what is the journal
entry to recognize this $5,000 transaction?
a. Once you have earned the $5,000 what is the journal entry to
record this?
The journal entry to recognize the $5,000 transaction would be:
This entry records the receipt of cash and the recognition of a liability for unearned revenue, as the job has not yet been completed. Once the job has been completed and the $5,000 has been earned, the journal entry to record this would be:
Debit: Unearned Revenue $5,000
Credit: Revenue $5,000
This entry removes the liability for unearned revenue and recognizes the revenue earned from completing the job.
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4. On March 1st, Somnium purchased in cash 5,000 shares from Microsoft and paid $45 per share together with a commission of $500. · On April 5th Microsoft distributed dividends of $0.5 per share. · On May 15 Somnium decided to sell 2,500 shares from Microsoft with the market price of $60 and paid a commission of $150. . On the 31st of December the market value of Microsoft share is $35 per share. Show all the calculations and prepare the journal entries. Full points are awarded only for correct journalizing and calculations. a) Prepare the journal entry for March 15. b) Prepare the journal entry for April 5th. Prepare the journal entry for May 1st. a) Prepare the journal entry for December 31
A journal entry is a chronological record of a business transaction that shows the debit and credit amounts for each account affected by the transaction. The journal entries are as follows:
a) Journal entry for March 1st:
Debit: Investment in Microsoft $225,500 (5,000 shares x $45 per share + $500 commission)
Credit: Cash $225,500
b) Journal entry for April 5th:
Debit: Cash $2,500 (5,000 shares x $0.5 per share)
Credit: Dividend Revenue $2,500
c) Journal entry for May 15th:
Debit: Cash $149,850 (2,500 shares x $60 per share - $150 commission)
Debit: Investment in Microsoft $112,750 (2,500 shares x $45 per share)
Credit: Gain on Sale of Investment $37,100
d) Journal entry for December 31st:
Debit: Unrealized Loss on Investment $50,000 (2,500 shares x ($35 - $45) per share)
Credit: Investment in Microsoft $50,000
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When setting up an advance directive it’s important to name a trustworthy person as your
A.beneficiary
B.power of attorney
C.trustee
D.executor
Answer: B.power of attorney
Explanation: An advance directive is a legal document that expresses the healthcare choices of a person when they can no longer communicate their decisions due to illness or injury. A power of attorney is a legal document that allows an individual to name someone who will act as an agent to manage their financial affairs if they become incapacitated. The person appointed as the power of attorney should be trustworthy and should act in the best interest of the individual.
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You have been asked to perform a sensitivity analysis on a company's plan to modernize its facilities to determine the impact of possible errors in estimating the net annual savings. The initial investment in the modernization is $30,000. The expected net annual savings are $13,000. The salvage value is $7,000 after a planning horizon of seven years. MARR is 12% per year.a. Determine if the modernization is economically attractive based on the initial estimates and an Annual Worth (AW) analysis.
b. Determine the AW if the net annual savings change by the following percentages from the initial estimate: , , , , , .
c. Determine the percentage change in net annual savings that causes a reversal in the decision regarding the attractiveness of the project.
a) From the given credentials the AW is positive, the modernization project is economically attractive based on the initial estimates. b) if the net annual savings change by the following percentages from the initial estimate the AW will be $6,535.37 c) a decrease in net annual savings would cause a reversal in the decision regarding the attractiveness of the project.
a. The Annual Worth (AW) of the modernization project can be determined using the following formula:AW = (P/A, i, N) + (A/G, i, N) + (F/A, i, N)Where P is the initial investment, A is the net annual savings, G is the gradient, F is the salvage value, i is the MARR, and N is the planning horizon.Using the given values, the AW can be calculated as follows:AW = (-$30,000)(A/P, 12%, 7) + ($13,000)(A/A, 12%, 7) + ($7,000)(A/F, 12%, 7)AW = -$4,799.20 + $13,000 + $934.57AW = $9,135.37Since the AW is positive, the modernization project is economically attractive based on the initial estimates.
b. The AW can be determined for different percentages of change in net annual savings using the same formula as above, but with the new values of A. For example, if the net annual savings change by -20%, the new value of A would be $10,400 ($13,000 x 0.8). The AW can then be calculated as follows:AW = (-$30,000)(A/P, 12%, 7) + ($10,400)(A/A, 12%, 7) + ($7,000)(A/F, 12%, 7)AW = -$4,799.20 + $10,400 + $934.57AW = $6,535.37The same process can be repeated for the other percentages of change in net annual savings to determine the corresponding AW values.
c. The percentage change in net annual savings that causes a reversal in the decision regarding the attractiveness of the project can be determined by setting the AW equal to zero and solving for A.0 = (-$30,000)(A/P, 12%, 7) + A(A/A, 12%, 7) + ($7,000)(A/F, 12%, 7)0 = -$4,799.20 + A + $934.57A = $3,864.63The initial value of A is $13,000, so the percentage change in net annual savings that causes a reversal in the decision is:($3,864.63 - $13,000) / $13,000 x 100% = -70.27%Therefore, a decrease of 70.27% in net annual savings would cause a reversal in the decision regarding the attractiveness of the project.
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Absorption Cost Systems 411 Managerial Application Customer Profitability AnalysisOnce the firm has a reliable product costing system that computes accurate product costs, managers can then analyze individual customer profitability. A profit and loss statement can be prepared that reports the revenues generated for each customer less the cost of the products sold (from the absorption costing system) less all other costs incurred to service the customer. These other costs include overnight deliveries, the cost of excessive change orders, the extra time spent by engineers or sales people servicing the customer, the extra costs incurred by purchasing to process short-lead-time orders, and so forth. One study found that the least profitable 20 percent of customers can reduce profits by 80 percent, while the most profitable 20 percent of customers can generate 150 per- cent of a company's profit. Another consultant asserts that 30 percent of customers of many firms are not profitable--and two-thirds of those will never be profitable. Hence, it becomes important for firms to identify and take actions to either drop the unprofit- able customers or convert them into profitable ones (raise prices or cut extra services) and to further cement solid relations with the profitable customers so they don't leave. One management consultant advocates creating customer operating partnerships" to boost business. In these partnerships, suppliers and their profitable customers integrate their supply chains to gether. The supplier operates deep inside the customer's business. This creates a barrier to entry for potential rivals. However, at the heart of any customer profitability analysis and customer operating partnerships is the firm's absorption costing system that accurately tracks costs gener- ated by each customer.
Absorption Cost Systems can be used to calculate the individual customer profitability of a company.
The profitability of each customer can be determined by taking the revenues generated by the customer and subtracting the cost of the products sold (from the absorption costing system) and other costs incurred to service the customer (such as overnight deliveries, change orders, extra time spent by engineers or sales people, etc.).
Research shows that the least profitable 20% of customers can reduce profits by 80%, while the most profitable 20% of customers can generate 150% of a company's profit. In addition, it is estimated that 30% of customers of many firms are not profitable and two-thirds of those will never be profitable. To address this issue, firms need to identify and take action to either drop unprofitable customers or convert them into profitable ones (e.g. by raising prices or cutting extra services).
Moreover, it is important to further cement solid relations with the profitable customers to prevent them from leaving. To do this, firms may set up "customer operating partnerships" in which suppliers and their profitable customers integrate their supply chains together. By doing this, a barrier to entry for potential rivals is created.
At the heart of any customer profitability analysis and customer operating partnerships, however, is the firm's absorption costing system that accurately tracks costs generated by each customer.
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American option Consider the following model, where r = 0, and a dividend of 1 unit of currency is paid at time 1.5.
S(0, W) 6, 6, 6, 6
S(1, W) 9, 9, 4, 4
S(2, 1) 11, 7, 7, 1
(a) Calculate the risk-neutral probabilities at each node of the information tree. (Remember to put back in the dividend first.)
(b) Calculate the value at each node of an American call option with exercise price K = 5 and hence deduce the premium paid at time 0.
(a) The risk-neutral probabilities at first, second, and third node: 2/5 for moving up and 3/5 for moving down, 5/7 for moving up and for moving down, and 1/2 for moving up and 1/2 for moving down respectively. (b) The premium paid at time 0 for the American call option is 4.
The risk-neutral probabilities at each node of the information tree can be calculated as follows:
(a) At the first node, the risk-neutral probability of moving up is (6-4)/(9-4) = 2/5 and the probability of moving down is 1 - 2/5 = 3/5.
At the second node, the risk-neutral probabilities are (9-4)/(11-4) = 5/7 for moving up and 1 - 5/7 = 2/7 for moving down.
At the third node, the risk-neutral probabilities are (4-1)/(7-1) = 3/6 = 1/2 for moving up and 1 - 1/2 = 1/2 for moving down.
b) The value at each node of an American call option with exercise price K = 5 can be calculated as follows:
At the third node, the value is max(S-K, 0) = max(11-5, 0) = 6 for the up state and max(7-5, 0) = 2 for the down state.
At the second node, the value is max(S-K, (2/5)*6 + (3/5)*2) = max(9-5, 3.2) = 4 for the up state and max(4-5, (1/2)*6 + (1/2)*2) = max(-1, 4) = 4 for the down state.
At the first node, the value is max(S-K, (5/7)*4 + (2/7)*4) = max(6-5, 4) = 4.
Therefore, the premium paid at time 0 for the American call option is 4.
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The following statement is true about the income statement:
A. net income is an estimate
B. It is the accountants best efforts to show sales and costs incurred at a point of time
C. None of the above
D.If a company is making a profit in a given time period it will have the cash to pay its bills
The income statement - It is the accountants best efforts to show sales and costs incurred at a point of time. Therefore the correct option is option B.
The income statement, also known as the profit and loss statement, is a financial statement that shows the revenues, expenses, and profits or losses of a company during a specific period of time. It is one of the most important financial statements that companies use to assess their financial performance.
The income statement is prepared by accountants who use their best efforts to accurately reflect the sales and costs incurred by the company during the period. While net income is an important part of the income statement, it is not an estimate.
And, while a company may be making a profit during a given time period, it may not necessarily have the cash to pay its bills due to other factors such as debt payments or capital expenditures.
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Due to market trends, a Company is selling its manufacturing equipment with the following values: Considering that the company pays 30% corporate tax, what is the amount of tax to be paid or recovered from the sale of each equipment ?
Type of machine Purchase price Book value Selling price Equipment A 100,000 100,000 150,000 Equipment B 250,000 160,000 120,000 Equipment C 110,000 110,000 115,000
Due to market trends, a Company is selling its manufacturing equipment with the following values: Considering that the company pays 30% corporate tax, the amount of tax to be paid or recovered from the sale of Equipment A is 15,000,
Equipment B is 12,000 and equipment C is 1,500
The amount of tax to be paid or recovered from the sale of each equipment can be calculated by determining the gain or loss on the sale and then applying the corporate tax rate of 30%.
For Equipment A:
Gain on sale = Selling price - Book value = 150,000 - 100,000 = 50,000
Tax to be paid = 30% of 50,000 = 15,000
For Equipment B:
Loss on sale = Book value - Selling price = 160,000 - 120,000 = 40,000
Tax to be recovered = 30% of 40,000 = 12,000
For Equipment C:
Gain on sale = Selling price - Book value = 115,000 - 110,000 = 5,000
Tax to be paid = 30% of 5,000 = 1,500
Therefore, the amount of tax to be paid or recovered from the sale of each equipment is:
Equipment A: 15,000
Equipment B: 12,000
Equipment C: 1,500
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Today, a company's shares sell for $425 each. Investors requirea 13.45% return on this stock. What amount is expected to be paidfor the next dividend per share if the dividend yield is currently2%?
The expected amount to be paid for the next dividend per share is $8.50.
To find the expected amount to be paid for the next dividend per share, we can use the formula for dividend yield:
We can rearrange this formula to solve for the annual dividend per share:
Annual dividend per share = (Dividend yield) × (Price per share)Plugging in the given values, we get:
Annual dividend per share = (0.02) × ($425)Annual dividend per share = $8.50Therefore, the expected amount to be paid for the next dividend per share is $8.50.
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how do i find specific percentages on assets on excel for example: A portfolio allocates 20% to Asset A, 20% to ETF Asset B, 20% to Asset_C, and 40% to Asset D.
Compute the mean, standard deviation, skewness, kurtosis, and Sharpe Ratio of this portfolio
and the four assets (A, B, C, and D). Sharpe Ratio is defined as the ratio of me an to standard
deviation (assuming risk free rate is zero).
DONT NEED ANSWERS JUST EXPLANATION pleaseee
Calculate the mean for each asset by using the AVERAGE function and Calculate the Sharpe Ratio for each asset by dividing the mean by the standard deviation.
To find specific percentages on assets in Excel, you can use the following steps:
1. Input the asset allocations into a spreadsheet, with each asset in a separate column. For example, you could have columns for Asset A, Asset B, Asset C, and Asset D.
2. Calculate the mean for each asset by using the AVERAGE function. For example, to find the mean for Asset A, you could use the formula =AVERAGE(A2:A11).
3. Calculate the standard deviation for each asset by using the STDEV function. For example, to find the standard deviation for Asset A, you could use the formula =STDEV(A2:A11).
4. Calculate the skewness for each asset by using the SKEW function. For example, to find the skewness for Asset A, you could use the formula =SKEW(A2:A11).
5. Calculate the kurtosis for each asset by using the KURT function. For example, to find the kurtosis for Asset A, you could use the formula =KURT(A2:A11).
6. Calculate the Sharpe Ratio for each asset by dividing the mean by the standard deviation. For example, to find the Sharpe Ratio for Asset A, you could use the formula =AVERAGE(A2:A11)/STDEV(A2:A11).
7. To find the mean, standard deviation, skewness, kurtosis, and Sharpe Ratio for the portfolio, you can use the same formulas as above, but use the entire range of data for all four assets. For example, to find the mean for the portfolio, you could use the formula =AVERAGE(A2:D11).
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Please discuss (in your assigned role as advocate or critic) the following policy statement:You are the human resources manager for a 250 employee sheriff's department. A new sheriff has just taken office, replacing the prior sheriff who had been in office for twenty years. The old sheriff, a forty five year law enforcement veteran, was very traditional and used traditional approaches to supervision and employee performance evaluation.The new sheriff comes from a very progressive city police department and has very different ideas about supervision. She is discussing converting from a traditional model of supervision and evaluation, which is the current model, to a human service model, which is what she is accustomed to. She is particularly interested in the 360 degree model of performance appraisals used by the Sacramento Police Department (see page 237 of the text).You have been asked to prepare a set of recommendations based on your opinion of which model should be used going forward.?ADVOCATES: You believe the human services approach is the way to move forward and are proposing that type of system, including introducing 360 degree evaluationsI Need Advocate proposal?
As an advocate for the human services approach, I believe that this model is the best way to move forward for the sheriff's department. One of the main advantages of the human services approach is that it focuses on the well-being and development of employees, which can lead to increased job satisfaction and better performance.
In particular, I support the introduction of the 360 degree evaluation model used by the Sacramento Police Department. This model involves gathering feedback from multiple sources, including peers, supervisors, and subordinates, to provide a comprehensive view of an employee's performance.
This approach can help identify strengths and areas for improvement, and can lead to more accurate and fair evaluations.
Overall, I believe that the human services approach and the 360 degree evaluation model can lead to a more productive and positive work environment for the sheriff's department.
By focusing on the well-being and development of employees, this approach can help the department achieve its goals and better serve the community.
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SCENARIO: Grass Cutter Inc. is a company involved in producing and distributing a variety of grass for industrial and residential use. The company has been facing declining sales over the past three (3) years and shareholders have made their displeasure known at the last company annual general meeting in October. The Chairman fired the CEO two (2) months ago.The Research & Development Team has come up with a new variety of grass that will grow in three (3) days. All you do is add water. The findings have been encouraging and their experiments show that this will be a game-changer in the market. The plan is to launch marketing activities for the new variety of grass with a Press Conference, to which the Minister of Agriculture and Fisheries will be invited to make remarks.The Chairman – Bradley Greening, is also poised to announce the appointment of a new CEO – Mrs. Zinnia Russell, who has a master’s degree in Agricultural Science and seven (7) years’ experience in selling agricultural products to farmers and consumers of a Home & Garden Centre. She joined the company on February 1, 2022.RequiredWrite a 3-minute speech that the new CEO – Zinna Russell will make at the Press Conference on February 24, 2022, to announce the new variety of grass being introduced in the market and her plans for the company’s success.You are free to embellish the background information with material from your own thoughts.
Good morning ladies and gentlemen,
I am Zinnia Russell, the newly appointed CEO of Grass Cutter Inc. I am delighted to be here today to present our company’s new and innovative variety of grass. As you know, the company has been facing a difficult period due to declining sales, and this is something we are committed to reversing. With the help of our Research & Development team, we have come up with a groundbreaking new product which will revolutionise the market.
This new variety of grass will grow in three days with only water added. Our experiments have proven that this grass will be much easier to grow and maintain than the current varieties on the market. We believe it will be a real game-changer and it will be available to both industrial and residential customers. We are confident that it will bring us success and turn around the fortunes of the company.
With the help of our experienced and passionate staff, I will strive to achieve the best results for Grass Cutter Inc. Our commitment to providing high quality products and services to our customers will never waiver, and our research team will continue to push the boundaries to produce new and exciting innovations. I also plan to reach out to farmers and garden centres to further expand our customer base.
I hope that today marks the beginning of a bright new chapter for Grass Cutter Inc., and I look forward to helping the company continue to grow and succeed.
Thank you for your time.
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What retirement plan do you think fits most people best?
Answer:
I think most people go with the IRA.
Question 11:
a. Assuming that you are Head of a sufficiently funded Non-State Agency (NSA) purposed to reduce poverty in the context of a poor sub-Saharan Africa country.
Required: Present a Stakeholder Analysis and Mapping Matrix (10 Marks)
b. Assuming that you are a team leader of 120 medical personnel dispatched to prevent, treat and sensitize affected and infected members of a highly traditional, hostile and remote community in Sub-Saharan Africa.
The community is not fully convinced that Ebola’s origin is not a making of modern science to cause suffering and extinction to the indigenous people in order to grab their land, mineral and other natural wealth. As such, they are not receptive to external help and would rather opt for traditional healing methods
Required:
i. Develop the intervention risk log (15 Marks)
ii . Develop the intervention risk scale (10 Marks)
c. In the context of sub-Saharan Africa, Discuss
a. Gender Equality & Equity (5 Marks)
b. Gender Mainstreaming (10 Marks)
c. Gender Needs (5 Marks)
d. Gender Planning (5 Marks) 50) MARKS
a. Stakeholder analysis and mapping matrix should be used to identify, analyze, and prioritize stakeholders.
b. In order to reduce the risk of working in a traditional, hostile and remote community, an intervention risk log should be developed.
c. Gender Equality & Equity: Gender equality is the equal access to opportunities and resources for both genders.
This can be done by listing the stakeholders, analyzing their interests, influence, and power, and then mapping the results. This will help the NSA identify key stakeholders who need to be involved in their plans and strategies for reducing poverty.
This risk log should identify potential risks associated with working in the community, the likelihood of each risk occurring, and the potential impact of each risk.
Gender Mainstreaming: Gender mainstreaming is an approach to development and governance that seeks to ensure that all policies, programmes, and activities take into account the different needs and roles of women and men, girls and boys.
Gender Needs: Gender needs refer to the different needs that women and men have in terms of education, healthcare, employment opportunities, etc. It is important to consider these gender needs when formulating policies and programmes to ensure that everyone's needs are met.
Gender Planning: Gender planning is the process of taking gender into account when planning and implementing policies and programmes. It involves analysing the different needs of men and women, and then developing strategies to ensure that their needs are met.
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Find the $/£ spot exchange rate if the same basket of goods
costs $700 in the U.S. and £1100 in the U.K. and the Purchase Power
Parity holds.
The $/£ spot exchange rate in this situation can be calculated by dividing the US dollar cost ($700) by the UK pound cost (£1100), which yields a rate of 0.63636363. This means that for every $1, we will get £0.63636363.
To find the $/£ spot exchange rate when the same basket of goods costs $700 in the U.S. and £1100 in the U.K. and the Purchase Power Parity holds, we can use the following formula:
$/£ spot exchange rate = cost of goods in U.S. / cost of goods in U.K.
Plug in the given values:
$/£ spot exchange rate = $700 / £1100
Simplify:
$/£ spot exchange rate = 0.6363636363636364
Therefore, the $/£ spot exchange rate is 0.6363636363636364. This means that 1 U.S. dollar is equal to 0.6363636363636364 British pounds.
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You decide to buy $1,000 of two-year CD (certificate of deposit). University Credit Union offers 7% interest per year. Mercantile Bank says that you can get $1,180 after two years.
Who offers a better deal?
You can compare the future value or the interest rate
Please draw the timeline
Mercantile Bank offers a better deal. The University Credit Union's future value = $1,144.90, Mercantile Bank's future value = $1,180.
To determine who offers a better deal on the two-year CD, we need to compare the future values and interest rates of University Credit Union and Mercantile Bank.
Step 1: Calculate the future value for University Credit Union
Interest rate = 7% per year
Principal (initial investment) = $1,000
First year:
Future Value = Principal * (1 + Interest rate) = $1,000 * (1 + 0.07) = $1,000 * 1.07 = $1,070
Second year:
Future Value = $1,070 * (1 + 0.07) = $1,070 * 1.07 = $1,144.90
Step 2: Compare the future values
University Credit Union: $1,144.90
Mercantile Bank: $1,180
Step 3: Determine which offer is better
Since the future value offered by Mercantile Bank is higher than that of University Credit Union, Mercantile Bank offers a better deal.
Here's the timeline:
Year 0: Initial investment of $1,000
Year 1: University Credit Union's future value = $1,070, Mercantile Bank's future value = unknown
Year 2: University Credit Union's future value = $1,144.90, Mercantile Bank's future value = $1,180
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Please help I’ll reward u after I promise
make me a slide it has be base on my first apartment & I choose parkline palm beaches , answer these questions
1.city
2.state
3.zip
4.why u choose that location
5.pictures of the exterior apartment
6. Name of CommunityApartment Features
# of Bedrooms
# of Bathrooms
Square Feet
Lease Period
Amenities of Complex
Pool
Gym
Dog Park
7. Pictures of InteriorWhats included
Cable
Utilities
Water
Washer/Drver
Dishwasher
Wifi
Basic Cable
8. FinancialAmount of Security Deposit
Amount of Rent
Move In Specials
Amount for Move In
Pls answer all the questions
You can make a slide about your first apartment using the information provided below, considering costs and location, and what is included.
City: Palm Beach GardensState: FloridaZip: 33410Parkline Palm Beaches is located in a vibrant and growing community with easy access to nearby restaurants, shopping, entertainment, and outdoor activities. It is also conveniently located near major highways, making it easy to commute to work or other destinations.Name of Community: Parkline Palm BeachesApartment Features:
1, 2, and 3 bedrooms available1-2 bathrooms729 - 1,263 square feetFlexible lease periods availableAmenities of Complex:
Resort-style pool24-hour fitness centerBark parkWhat's included:
Basic cableHigh-speed internetWasher/dryer in-unitDishwasherWater and utilities includedFinancial:
Security deposit: $500 - $800Rent: $1,684 - $2,888 per monthMove-in specials vary, please contact the leasing office for detailsTotal move-in costs depend on the security deposit and first month's rent.How to make a slideTo make a slide, or a few of them, you must choose photos of the apartment complex that you have chosen. If possible, find photos of the inside of the apartment as well.
The written information you include in each slide must be consistent with the photo you are using. Thus, talk about the apartment features with photos that show the apartment on the inside, such as its kitchen and bedrooms.
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IN EXCEL:
Problem 2 (25 points) Assume that you will graduate in 2 years from today and after graduation, you are planning to purchase a new car for $50,000. For the next two years, you will save $250 each month for the down payment and your annual rate of return is 2%. After you have your down payment, you will apply for a car loan to finance the rest of the purchase price. Your bank offers a loan with monthly payments at 4% APR with a term of 36 months. Alternatively, a credit union has a promotional APR of 3% for new customers with a loan term of 48 months. Build amortization tables of both loan alternatives and calculate total interest paid in each loan.
For loan 1 with 4% APR, 36 months, the total interest paid is $3,851.04 and for loan 2 with 3% APR, 48 months, the total interest paid is $2,839.36. The amortization tables for each loan alternative is given below.
You will need to create two amortization tables, one for each loan alternative. An amortization table shows the breakdown of monthly payments into principal and interest over the life of the loan.
1. First, calculate the down payment you will have saved in 2 years:
Down payment = ($250/month) x (24 months) x (1 + 0.02) = $6,120
2. Next, calculate the amount you will need to finance:
Amount financed = $50,000 - $6,120 = $43,880
Now, you can create the amortization tables for each loan alternative.
Loan 1: 4% APR, 36 months
Monthly payment = ($43,880) x (0.04/12) / (1 - (1 + 0.04/12)^(-36)) = $1,298.64
| Month | Beginning Balance | Interest | Principal | Ending Balance |
|-------|-------------------|----------|-----------|----------------|
| 1 | $43,880.00 | $146.27 | $1,152.37 | $42,727.63 |
| 2 | $42,727.63 | $142.43 | $1,156.21 | $41,571.42 |
| ... | ... | ... | ... | ... |
| 36 | $1,298.64 | $4.33 | $1,294.31 | $0.00 |
Total interest paid = ($1,298.64 x 36) - $43,880 = $3,851.04
Loan 2: 3% APR, 48 months
Monthly payment = ($43,880) x (0.03/12) / (1 - (1 + 0.03/12)^(-48)) = $974.57
| Month | Beginning Balance | Interest | Principal | Ending Balance |
|-------|-------------------|----------|-----------|----------------|
| 1 | $43,880.00 | $109.70 | $864.87 | $43,015.13 |
| 2 | $43,015.13 | $107.54 | $867.03 | $42,148.10 |
| ... | ... | ... | ... | ... |
| 48 | $974.57 | $2.44 | $972.13 | $0.00 |
Total interest paid = ($974.57 x 48) - $43,880 = $2,839.36
Based on these calculations, the credit union's promotional APR of 3% with a loan term of 48 months results in a lower total interest paid ($2,839.36) compared to the bank's loan with a 4% APR and a term of 36 months ($3,851.04).
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Which of the following satisfy the law of supply? Select the two correct answers.(1 point) Responses An increase in price is followed by an increase in supply. An increase in price is followed by an increase in supply. A increase in price is followed by a decrease in quantity supplied. A increase in price is followed by a decrease in quantity supplied. An increase in price is followed by an increase in quantity supplied. An increase in price is followed by an increase in quantity supplied. A decrease in price is followed by a decrease in supply. A decrease in price is followed by a decrease in supply. A decrease in price is followed by a decrease in quantity supplied.
The answer is option c. An increase in price is followed by an increase in quantity supplied and d. A decrease in price is followed by a decrease in quantity supplied.
These statements satisfy the law of supply.
What is the way to define supply?In economics, supply is as the entire quantity of a certain good or service that a provider makes available to customers at a specific time and price. Typically, market activity determines it.
What is an illustration of supply in economics?For instance, growers are prepared to provide 15 million pounds of coffee each month at a price of $4 per pound.
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Please read before just saying you need more information. Thank you
This is your opportunity to play detective and do some financial statement analysis. Please select any publically traded company. Using the company you select please find the annual report and the financial ratio information for the company for the following ratios:
Debt to Equity
Current Ratio
Return on Equity
Quick Ratio
Working Capital Ratio
Price Earnings Ratio
Earnings Per Share
and one additional ratio of your choosing
Once you have found this information and looked it over you will be able to write a paper (approx 4 to 6 pages) that tells us about how the company is doing with respect to the ratios, what the ratios are telling you about the company and how you predict they will do in the future.
For this financial analysis, I have chosen Amazon.com Inc., a multinational technology company that specializes in e-commerce, cloud computing, digital streaming, and artificial intelligence.
Amazon is one of the largest companies in the world, with a market capitalization of over $1.5 trillion as of March 2023.
Debt to Equity Ratio:
The debt to equity ratio measures the amount of debt that a company has relative to its equity. It is an indicator of a company's financial leverage. Amazon's debt to equity ratio as of December 31, 2021, was 0.60.Current Ratio:
The current ratio is a liquidity ratio that measures a company's ability to meet its short-term obligations using its current assets. A current ratio of 1.0 or higher is generally considered to be good. Amazon's current ratio as of December 31, 2021, was 1.16, which indicates that the company has enough current assets to cover its short-term liabilities.Return on Equity:
Return on equity (ROE) measures the amount of net income returned as a percentage of shareholders' equity. Amazon's ROE for the year ended December 31, 2021, was 26.7%. This indicates that Amazon is generating a high return on the investment made by shareholders. The higher the ROE, the more efficient the company is at generating profits.Quick Ratio:
The quick ratio, also known as the acid-test ratio, is a liquidity ratio that measures a company's ability to pay its short-term obligations using its most liquid assets. This ratio excludes inventory, as it is not always easy to sell quickly. A quick ratio of 1.0 or higher is generally considered to be good.Working Capital Ratio:
The working capital ratio is a liquidity ratio that measures a company's ability to meet its short-term obligations using its current assets. It is calculated by dividing current assets by current liabilities.Price Earnings Ratio:
The price-to-earnings (P/E) ratio is a valuation ratio that compares a company's stock price to its earnings per share (EPS). A high P/E ratio indicates that investors are willing to pay more for each dollar of earnings, while a low P/E ratio indicates that investors are not willing to pay as much.Earnings Per Share:
Earnings per share (EPS) is a measure of a company's profitability that shows how much profit it generates per share of common stock outstanding. Amazon's EPS for the year ended December 31, 2021, was $52.19. This indicates that Amazon is generating a significant amount of profit per share.Inventory Turnover Ratio:
The inventory turnover ratio measures how many times a company sells its inventory during a particular period. It is calculated by dividing the cost of goods sold by the average inventory during the period. Amazon's inventory turnover ratio for the year ended December 31, 2021, was 10Learn more about financial analysis https://brainly.com/question/1265337
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lber Company is considering eliminating its phone division. The company allocates fixed costs based on sales. If the phone division is dropped, $154,000 of the fixed costs allocated to that division could be eliminated. The impact on Valber’s operating income from eliminating the phone division would be: Desktops Laptops Tablets Phones Sales $ 368,000 $ 883,500 $ 706,000 $ 979,000 Variable costs 205,000 639,000 532,000 799,000 Contribution margin 163,000 244,500 174,000 180,000 Fixed costs 75,200 178,300 142,800 199,000 Net income (loss) 87,800 66,200 31,200 (19,000)
The impact on Valber's operating income from eliminating the phone division would be an increase of $135,000.
This is calculated by taking the contribution margin of the phone division ($180,000) and subtracting the fixed costs that could be eliminated ($154,000) and the net loss from the phone division ($19,000).
1. Calculate the contribution margin of the phone division:
Sales - Variable costs = Contribution margin
$979,000 - $799,000 = $180,000
2. Calculate the fixed costs that could be eliminated if the phone division is dropped:
$154,000
3. Calculate the net loss from the phone division:
Contribution margin - Fixed costs = Net income (loss)
$180,000 - $199,000 = ($19,000)
4. Calculate the impact on operating income from eliminating the phone division:
Contribution margin - Fixed costs that could be eliminated - Net loss from phone division = Impact on operating income
$180,000 - $154,000 - ($19,000) = $135,000
Therefore, from eliminating the phone division the impact on Valber's operating income would be an increase of $135,000.
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An all-equity corporation has an expected EBIT of $900,000, which it expects to earn in perpetuity. The corporate tax rate is 35%. The company’s unlevered cost of equity is 10% and the cost of debt is 8%. The company is planning on issuing $4 million of debt and using the proceeds to buy back its shares at the current market value. Assuming that there are no other market imperfections other than taxes, what will be the WACC after the restructuring is completed.
7.57%
8.03%
8.46%
9.15%
8.77%
The WACC after the restructuring will be 8.03%.
To calculate the WACC, we need to find the new cost of equity and the new weight of equity and debt.
First, we will calculate the new cost of equity using the following formula:
New cost of equity = Unlevered cost of equity + (Unlevered cost of equity - Cost of debt) * (Debt / Equity) * (1 - Tax rate)
= 10% + (10% - 8%) * ($4 million / $5.6 million) * (1 - 35%)
= 10.56%
Next, we will calculate the new weight of equity and debt:
New weight of equity = $5.6 million / ($5.6 million + $4 million) = 0.583
New weight of debt = $4 million / ($5.6 million + $4 million) = 0.417
Finally, we will calculate the WACC using the following formula:
WACC = (New weight of equity * New cost of equity) + (New weight of debt * Cost of debt * (1 - Tax rate))
= (0.583 * 10.56%) + (0.417 * 8% * (1 - 35%))
= 8.03%
Therefore, the WACC after the restructuring will be 8.03%.
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Name two provisions which ensure that the investment of shareholders is protected. Explain the purpose of each
Protection clauses are clauses that provide favored shareholders the power to veto or stop particular business acts.
Briefing:-In the event that different owners disagree on the best course of action for the company, protective provisions might aid in safeguarding the interests of minority shareholders.
What does anti-dilution protection serve?Anti-dilution clauses serve as a buffer to guard investors from having their stock holding interests reduced in value or diluted. This can occur when a decline in an owner's ownership interest results from a rise in the number of outstanding shares.
How can shareholders be safeguarded?By having checks and balances in place and ensuring there are no conflicts of interest between the board members and management of the company, the board structure of a corporation aids in protecting shareholders.
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Case:
After finishing your BBA at EU Business School, you are looking forward to find a job that suits with your interests, studies and capabilities, after attending several meetings you see an email from your brother.
You had not seen him for a long period, you are excited to hear from him. His email was explaining that he was thinking about investing in a new project and he wanted to receive your input and advice regarding the project.
He wants you to prepare projected financial statements to have an idea of the profitability of the project and how could the project be structured.
Following we have the data that your brother Peter has delivered to you:
Sales: The expected sales are 1.000.000 units for the first year, 2.000.000 in the second year, 2.750.000 in the third year, 3.250.000 in the fourth year and a 3% growth in units from the fourth year to the fifth year.
The sales price per unit is 10€ per unit on the first two years, but once the product has been introduced in the market, the sales price will increase to 11€ for the years 3, 4 and 5.
Cost of goods sold: The recipe of the product explains that COGS will have a cost of 6€ per unit, and no change is expected during the rest of the project.
Production labor: The first year the plant needs 6 technicians with a cost of 40000€ per person per year, 70 production workers with an annual cost of 30.000€ per employee per year, and 1 manager with a cost of 90.000€ per person per year. The next years the production labor will increase, due to the fact that the production of the plant will also be increasing. The year 2 the cost will be 50% higher than year 1, the year 3 the cost will be 60% higher than year 1, the year 4 the cost will be 75% higher than year 1 and in year 5 the cost will be 80% higher than year 1.
Investment: the required investment is 3.500.000€, of which 2.000.000 will be depreciated over a period of 10 years and the rest will be depreciated over a period of 4 years. No more investments will be required during the years 2 until 5.
Utilities expense: We expect a cost of 0.20€ per unit on the first year, as the energy seems to have price pressure in the future, we believe that the energy cost per unit will be increasing a 5% year over year until year 5.
Maintenance cost: it will be outsourced, and we expect a cost of 0.3€ per unit in average for the first year. As the machinery gets older, we expect the maintenance costs to increase, we believe that the average cost per unit will grow at a 5% rate year over year.
General and administration costs are expected to be 200.000€ for the first year, 210000 for the second year, and for the following years the cost should increase in line with the sales volume growth, so if the sales in units grow a 10%, then the G&A cost should also grow a 10% from the previous period.
The days to collect accounts receivable are 90, the days to pay suppliers are 30.
The company will need an inventory of 30 days.
After receiving all of this information, you realize that you have no idea about how your brother is going to finance this project, so you send an email requesting for this information. The answer from Peter is not concrete, he says "I have 2.000.000€ that I could invest, the rest you will have to convince the banks to give us a loan, as I am not willing to chare the property of the company with other investors."
You know that the tax rate is 25% and the interest rate is 5%.
So now is your turn to show everything you have learned and
prepare a Profit & loss account for the next 5 years and a balance sheet for the same period.
Calculate Return on Equity, return on sales and debt to assets ratio.
Explanation:
Financial projections for investment.

Case: After finishing your BBA at EU Business School, you are looking forward to find a job that suits with your interests, studies and capabilities, after attending several meetings you see an email from your brother. You had not seen him for a long period, you are excited to hear from him. His email was explaining that he was thinking about investing in a new project and he wanted to receive your input and advice regarding the project. He wants you to prepare projected financial statements to have an idea of the profitability of the project and how could the project be structured. Following we have the data that your brother Peter has delivered to you: Sales: The expected sales are 1.000.000 units for the first year, 2.000.000 in the second year, 2.750.000 in the third year, 3.250.000 in the fourth year and a 3% growth in units from the fourth year to the fifth year. The sales price per unit is 10€ per unit on the first two years, but once the product has been introduced in the market, the sales price will increase to 11€ for the years 3, 4 and 5. Cost of goods sold: The recipe of the product explains that COGS will have a cost of 6€ per unit, and no change is expected during the rest of the project. Production labor: The first year the plant needs 6 technicians with a cost of 40000€ per person per year, 70 production workers with an annual cost of 30.000€ per employee per year, and 1 manager with a cost of 90.000€ per person per year. The next years the production labor will increase, due to the fact that the production of the plant will also be increasing. The year 2 the cost will be 50% higher than year 1, the year 3 the cost will be 60% higher than year 1, the year 4 the cost will be 75% higher than year 1 and in year 5 the cost will be 80% higher than year 1. Investment: the required investment is 3.500.000€, of which 2.000.000 will be depreciated over a period of 10 years and the rest will be depreciated over a period of 4 years. No more investments will be required during the years 2 until 5. Utilities expense: We expect a cost of 0.20€ per unit on the first year, as the energy seems to have price pressure in the future, we believe that the energy cost per unit will be increasing a 5% year over year until year 5. Maintenance cost: it will be outsourced, and we expect a cost of 0.3€ per unit in average for the first year. As the machinery gets older, we expect the maintenance costs to increase, we believe that the average cost per unit will grow at a 5% rate year over year. General and administration costs are expected to be 200.000€ for the first year, 210000 for the second year, and for the following years the cost should increase in line with the sales volume growth, so if the sales in units grow a 10%, then the G&A cost should also grow a 10% from the previous period. The days to collect accounts receivable are 90, the days to pay suppliers are 30. The company will need an inventory of 30 days. After receiving all of this information, you realize that you have no idea about how your brother is going to finance this project, so you send an email requesting for this information. The answer from Peter is not concrete, he says "I have 2.000.000€ that I could invest, the rest you will have to convince the banks to give us a loan, as I am not willing to chare the property of the company with other investors." You know that the tax rate is 25% and the interest rate is 5%. So now is your turn to show everything you have learned and prepare a Profit & loss account for the next 5 years and a balance sheet for the same period. Calculate Return on Equity, return on sales and debt to assets ratio.
To prepare the financial statements, we need to analyze the information provided and make some assumptions to complete missing data.
Projected Income Statement for the Next 5 Years:
Year12345Sales10,000,00022,000,00030,125,00039,312,50040,462,500Cost of Goods Sold6,000,00013,200,00018,075,00023,587,50024,324,375Gross Profit4,000,0008,800,00012,050,00015,725,00016,138,125Production Labor2,558,0004,129,6006,606,40011,563,50011,930,680Utilities Expense200,000440,000634,375793,125841,282Maintenance Cost300,000660,000950,6251,190,7811,263,413General and Admin Expenses200,000210,000231,000254,100269,790EBITDA1,741,0003,560,4004,627,000
To prepare the projected financial statements and calculate the required ratios, we need to use the given information and apply the relevant formulas. Here are the steps to follow:
1. Calculate the projected sales revenue for each year by multiplying the expected sales units by the sales price per unit.
2. Calculate the projected cost of goods sold (COGS) for each year by multiplying the expected sales units by the COGS per unit.
3. Calculate the projected production labor cost for each year by adding up the cost of the technicians, production workers, and manager, and multiplying by the relevant percentage increase for each year.
4. Calculate the projected depreciation expense for each year by dividing the investment amount by the depreciation period (10 years for 2,000,000€ and 4 years for 1,500,000€).
5. Calculate the projected utilities expense for each year by multiplying the expected sales units by the utilities cost per unit, and multiplying by the relevant percentage increase for each year.
6. Calculate the projected maintenance cost for each year by multiplying the expected sales units by the maintenance cost per unit, and multiplying by the relevant percentage increase for each year.
7. Calculate the projected general and administration (G&A) cost for each year by using the given amounts for the first two years, and multiplying by the relevant percentage increase for the following years.
8. Calculate the projected earnings before interest and taxes (EBIT) for each year by subtracting the COGS, production labor cost, depreciation expense, utilities expense, maintenance cost, and G&A cost from the sales revenue.
9. Calculate the projected interest expense for each year by multiplying the loan amount (1,500,000€) by the interest rate (5%).
10. Calculate the projected earnings before taxes (EBT) for each year by subtracting the interest expense from the EBIT.
11. Calculate the projected income tax expense for each year by multiplying the EBT by the tax rate (25%).
12. Calculate the projected net income for each year by subtracting the income tax expense from the EBT.
13. Prepare the projected profit & loss account for the next 5 years by listing the sales revenue, COGS, production labor cost, depreciation expense, utilities expense, maintenance cost, G&A cost, EBIT, interest expense, EBT, income tax expense, and net income for each year.
14. Prepare the projected balance sheet for the next 5 years by listing the assets (accounts receivable, inventory, and fixed assets), liabilities (accounts payable and loan), and equity (owner's investment and retained earnings) for each year.
15. Calculate the return on equity (ROE) for each year by dividing the net income by the equity.
16. Calculate the return on sales (ROS) for each year by dividing the net income by the sales revenue.
17. Calculate the debt to assets ratio for each year by dividing the total liabilities by the total assets.
By following these steps, you can prepare the projected financial statements and calculate the required ratios for the next 5 years.
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At what rate of interest will a payment of 1 now and 2 in one
year accumulate to 4 in 2 years?
The interest rate cannot be negative, the answer is i ≈ 0.79, or approximately 79%.
To find the rate of interest at which a payment of 1 now and 2 in one year will accumulate to 4 in 2 years, we can use the formula for the future value of an annuity:
FV = PMT × [(1 + i)ⁿ - 1] / i
Where FV is the future value, PMT is the payment, i is the interest rate, and n is the number of periods.
In this case, we have:
FV = 4
PMT = 1 + 2 = 3
n = 2
Substituting these values into the formula, we get:
4 = 3 × [(1 + i)² - 1] / i
Simplifying and rearranging, we get:
4i = 3(1 + i)² - 3
Expanding and rearranging again, we get:
0 = 3i² - 4i - 3
Using the quadratic formula, we can solve for i:
i = (-b ± √(b² - 4ac)) / (2a)
Where a = 3, b = -4, and c = -3.
i = (-(-4) ± √((-4)² - 4(3)(-3))) / (2(3))
i = (4 ± √(16 + 36)) / 6
i = (4 ± √52) / 6
i ≈ 0.79 or i ≈ -1.13
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Suppose the interest rate is
6.9%
APR with monthly compounding. What is the present value of an
annuity that pays
$100
every
three
months for
seven
years? (Note: Be careful not to round any inte
The present value of an annuity is the sum of the present value of each payment. The present value of each payment is calculated by dividing the payment by the interest rate raised to the power of the number of payments.
In this case, the interest rate is 6.9% APR with monthly compounding, the payment is $100 every three months, and the number of payments is seven years.
To calculate the present value of the annuity, we first need to find the effective monthly interest rate. Since the interest rate is compounded monthly, we can divide the annual interest rate by 12 to get the monthly interest rate:
i = 6.9% / 12 = 0.00575
Next, we need to find the number of payments. Since the annuity pays $100 every three months for seven years, the number of payments is:
n = 7 * 4 = 28
Finally, we can use the formula for the present value of an annuity to find the present value:
PV = P * [(1 - (1 + i)^-n) / i]
Where P is the payment, i is the interest rate, and n is the number of payments. Plugging in the values we found earlier, we get:
PV = 100 * [(1 - (1 + 0.00575)^-28) / 0.00575]
PV = 100 * [(1 - 0.8367) / 0.00575]
PV = 100 * [0.1633 / 0.00575]
PV = 100 * 28.3748
PV = $2,837.48
Therefore, the present value of the annuity is $2,837.48.
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You pay $50,250 to buy a call option on the euro, with an
exercise price of $1.30/€. At expiration, the spot exchange rate is
at $1.25/€. What is the overall percentage loss on your
investment?
The overall percentage loss on your investment would be ($0.05/€) / ($1.30/€) x 100 = 3.84%.
To calculate the overall percentage loss on your investment in a call option on the euro, you need to determine the difference between the exercise price and the spot exchange rate at expiration.
In this case, the exercise price was $1.30/€ and the spot exchange rate was $1.25/€. Therefore, the difference between the two is $1.30/€ - $1.25/€ = $0.05/€.
To calculate the percentage loss on your investment, divide the difference by the exercise price and then multiply by 100. Therefore, your overall percentage loss on your investment would be ($0.05/€) / ($1.30/€) x 100 = 3.84%.
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