Problem #10 (TVM - N): Tom's accountant guesstimates sales growth to be 5%. How long would...

Question

Question

Problem #10 (TVM - N): Toms accountant guesstimates sales growth to be 5%. How long would it take sales to double?

business accounting

Answer 1

Answer #1

We use the formula:
A=P(1+r/100)^n
where
A=future value($2x)
P=present value($x say)
r=rate of interest
n=time period.

2x=x*(1.05)^n

2=(1.05)^n

Taking log on both sides;

log 2=n*log (1.05)

n=log 2/log (1.05)

=14.21 years(Approx).

Add a comment

Answer 2

Similar Homework Help Questions

Problem #9 (TVM): Tom's accountant suggests that Tom will earn the following cash flow stream from...

Problem #9 (TVM): Tom's accountant suggests that Tom will earn the following cash flow stream from a mutual fund investment over the next 4 years. What is the present value of the following cash flow stream at a rate of 12.00% Years CFs: 0 $0 1 $75 2 $225 3 $0 4 $300 81 Page
Problem #8 (TVM): Tom's best friend, Joe, works for a company that was just acquired. He...

Problem #8 (TVM): Tom's best friend, Joe, works for a company that was just acquired. He lost hi job. Joe was given a severance payment of $365,000, which he invested at a 7.5% annual rate. He now plans to retire, and he wants to withdraw $35,000 at the end of each year, starting at the end of this year. How many years will it take to exhaust his funds, i.e., run the account down to zero?
Problem #7 (TVM): Tom's brother has $950,000 (today) and wants to retire. He expects to live...

Problem #7 (TVM): Tom's brother has $950,000 (today) and wants to retire. He expects to live for another 25 years and to cam 7.5% on his invested funds. How much could he withdraw at the end of cach of the next 25 years and end up with zero in the account?

If a company's sales are growing at a rate of 10% annually, how long will it...

If a company's sales are growing at a rate of 10% annually, how long will it take sales to double? Please draw the time line and list the inputs of your financial calculator. (3 points)
Solve the problem. In the formula N - let, N is the number of items in...

Solve the problem. In the formula N - let, N is the number of items in terms of an initial population I at a given time t and k is a growth constant equal to the percent of growth per unit time. How long will it take for the population of a certain country to double if its annual growth rate is 6.3%? Round to the nearest year. None Given Selected Answer: Answers 11 yr 5 yr 1 yr 32...
5. List the 3 categories of things that affect economic growth in the long run. 6....

5. List the 3 categories of things that affect economic growth in the long run. 6. Which of the above categories probably explains most of the difference between rich countries and poor countries? 7. In the long run, money is 8. A conveys ownership of a company while a entitles the owner to a fixed amount of money in the future. 9. A riskier bond will have a price and a rate of return. 10. If output grows at 10%...

How long will it take to double your money with a growth rate of 4.0 percent...

How long will it take to double your money with a growth rate of 4.0 percent and 5.00 percent respectively? (Round your answers to 1 decimal place.) Growth rate 4.0 percent ( )Years 5.00 percent ( )Years
I need help with this problem. Tom's Tax Services is a small accounting firm that offers...

I need help with this problem. Tom's Tax Services is a small accounting firm that offers tax services to small businesses and individuals. A local store owner has approached Tom about doing his taxes but is concerned about the fees Tom normally charges. The costs and revenues at Tom's Tax Services follow: TOM'S TAX SERVICES Annual Income Statement Sales revenue $ 722,000 Costa Labor 450,000 Equipment lease 49,700 Rent 41,800 Supplies 31,100 Tom's salary 74,300 Other costs 22,300 Total costa...
1. If something grows at 5% per year, how long will it take to double (approximately)?...

1. If something grows at 5% per year, how long will it take to double (approximately)? 2. Name three or four institutions that are important for economic growth.

At a growth (interest) rate of 7 percent annually, how long will it take for a...

At a growth (interest) rate of 7 percent annually, how long will it take for a sum to double? To triple? Use Appendix A for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answers to 2 decimal places.) Time needed to double years Time needed to triple years