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    Multiple choice

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    Darlene wishes to accumulate $50,000 by the end of 10 years by making
    Equal annual end-of-the year deposits over the next 10 years. If Darlene
    Can earn 5 percent on her investments, how much must she deposit at the
    end of each year?
    a. $3,975
    b. $6,475
    c. $5,000
    d. $4,513

    A corporation is considering expanding operations to meet growing
    demand. With the capital expansion, the current accounts are expected to
    change. Management expects cash to increase by $20,000, accounts
    receivable by $40,000, and inventories by $60,000. At the same time
    accounts payable will increase by $50,000, accruals by $10,000, and
    long-term debt by $100.000. The change in networking capital is
    a. an increase of $120,000
    b. a decrease of $ 40,000
    c. a decrease of $120,000
    d. an increase of $ 60,000

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    Solution Preview

    1. The amount to deposit would be such that the future value is $50,000. The amount deposited is an annuity. We use the FVIFA table to get the FV factor. ...

    Solution Summary

    The solution explains two multiple choice questions relating to finance