Please complete the below 5 questions
1. Questions #1a and #1b .
1a: In 1996, the monthly cost of a certain cell phone plan was $45. In 2002, that same plan had a monthly cost of $36. If 1996 is the reference date, what is the price index for that cell phone plan in 2002?
1b: Using the price index for the cell phone plan from the previous question, assume that the cell phone company has a family plan that cost $68 in 1996. What should we expect that family plan to cost in 2003?
2. Mario just invested $12,000 into an interest-bearing account that yeilds 11.0%. Inflation is averaging 6.6% per year.
What is the actual dollar value of Mario’s investment be after 9 years?
What is the inflation-fee interest rate (rounded to the nearest 0.1 percent)?
What will the constant dollar value of Mario’s investment be after 9 years (using today’s dollars as the reference dollar)?
Show that the actiual dollar value and the constant dollar value of Mario’s investment 9 years from now represent the same amount of money.
Question 3a, 3b & 3c use the following situation: Two years later, XY Computers bought another even higher-powered array processor. This processor has an acquisition cost of $40,000, a 10-year useful life, and an expected salvage value of $2000. Use the format shown in table 14.2 to show depreciation year, depreciation amount, and book value. Note: Table 14.2 is at the bottom of this document
3a. Show straigh-line depreciation
3b. Show 150% declining-balance depreciation
3c. Show MACRS depreciation.
Question 4a, & 4b, are related to the below situation: Below is a simplified balance sheet (amounts in thousands) for Xenon Game Software, Inc. immediately before they buy new development hardware for an up-coming project.
Assests
Cash and cash equivalents $90
Accounts receivable $175
Plant and equipment$216
Total assests