You run a school in Florida. Fixed monthly cost is $5,689.00 for rent and utilities, $5,807.00 is spent in salaries and$1,772.00 in insurance. Also every student adds up to $93.00 per month in stationary, food etc. You charge $710.00 permonth from every student now.You are considering moving the school to another neighborhood where the rent and utilities will increase to $11,056.00,salaries to $6,925.00 and insurance to $2,056.00 per month. Variable cost per student will increase up to $177.00 permonth. However you can charge $1,053.00 per student. At what point will you be indifferent between your current modeof operation and the new option?Submit

The management uses indifferent points when the decision is to be taken regarding selecting between…

Answered: You gun a school in Florida. Fixed…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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You are a young personal financial adviser. Molly, one of your clients approached you for consultation about her plan to save aside $450,000 for her child’s higher education in United States 15 years from now. Molly has a saving of $120,000 and is considering different alternativeoptions:Investment 1: Investing that $120,000 in a saving account for 15 years. There are two banks for her choice. Bank A pays a rate of return of 8.5% annually, compounding semi-annually. Bank B pays a rate of return of 8.45 annually, compounding quarterly.Investment 2: Putting exactly an equal amount of money into ANZ Investment Fund at the end of each month for 15 years to get 330 000 she still shorts of now. The fund is offering a rate of return 7% per year, compounding monthly.Required: d) Calculate the monthly payment Molly needs to contribute to ANZ Investment Fund to get $330,000 after 15 years in Investment 2?
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1
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