There are three numerical questions, you can answer them using either mathematical formula or financial calculator....

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Finance

There are three numerical questions, you can answer them usingeither mathematical formula or financial calculator. No matter whatmethod you use, you need to show the calculation steps (for mathformula) or function buttons that you click.
1.a.) In the year-end of 2018, Mike Foods Inc. just spent $19.5million to pay out the dividends and it disclosed the retainedearnings of $279.5 million. In the year-end of 2017 the company hadretained earnings of $221.8 million. Based on the giveninformation, what was the net income of 2018 for Mike FoodsInc.?
1.b) Suppose Kim has $800 due in the future and the nominal rateis 6%, please find out its present value under following twoconditions: (1) Semiannual compounding, discounted back 8 years (2)Quarterly compounding, discounted back 8 years. Why do thedifferences in the PVs occur?
1.c.)Jessica has just won a game organized by her community. Asa reward, she needs to choose among three options: (A) She canchoose to receive a lump-sum today of $55, (B) to receive 10end-of-year payments of $9, or (C) to receive 30 end-of-yearpayments of $5. If we assume that she can earn 6% annually, whichoption should she choose?

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3.9 Ratings (786 Votes)

1 a Let RE stand for retained earnings and NI stand for net income Hence RE2018 RE2017 NI2018 Dividend2018 Hence 2795 2218 NI2018 195 Hence NI2018 2795 2218 195 772 million 1 b FV 800 See Answer

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There are three numerical questions, you can answer them usingeither mathematical formula or financial calculator. No matter whatmethod you use, you need to show the calculation steps (for mathformula) or function buttons that you click.1.a.) In the year-end of 2018, Mike Foods Inc. just spent $19.5million to pay out the dividends and it disclosed the retainedearnings of $279.5 million. In the year-end of 2017 the company hadretained earnings of $221.8 million. Based on the giveninformation, what was the net income of 2018 for Mike FoodsInc.?1.b) Suppose Kim has $800 due in the future and the nominal rateis 6%, please find out its present value under following twoconditions: (1) Semiannual compounding, discounted back 8 years (2)Quarterly compounding, discounted back 8 years. Why do thedifferences in the PVs occur?1.c.)Jessica has just won a game organized by her community. Asa reward, she needs to choose among three options: (A) She canchoose to receive a lump-sum today of $55, (B) to receive 10end-of-year payments of $9, or (C) to receive 30 end-of-yearpayments of $5. If we assume that she can earn 6% annually, whichoption should she choose?