Explain what is meant by the Rule of 72.How can it be used in finance applications?

Question:

Explain what is meant by the “Rule of 72.”How can it be used in finance applications?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For book-img-for-question

Contemporary Financial Management

ISBN: 9780324289114

10th Edition

Authors: James R Mcguigan, R Charles Moyer, William J Kretlow

See More Books

Question Posted: Jul 17, 2012 02:16 AM

See More Questions

Explain what is meant by the term a neutral atom. Explain what a negatively charged atom means.
Explain what is meant by the clientele effect.
Explain what is meant by the criteria for evaluating efficiency and effectiveness. Provide five possible specific criteria for evaluating effectiveness of an IT system for payroll.
For the charge configuration of Prob. 2.15, find the potential at the center, using infinity as your reference point.
If long-term credit exposes a borrower to less risk, why would people or firms ever borrow on a short-term basis?
3. ZR Corporation's stock has a beta coefficient equal to 0.8 and a required rate of return equal to 11 percent. If the expected rate of return on the market is 12.5 percent, what is the risk-free...
Develop the questionnaire in Internet Exercise 8-21 using an electronic questionnaire design package that is available for free (see the websites mentioned in this chapter in the subsection entitled...
Compute the overhead rate per service request for the Maintenance Department if estimated overhead costs are $18,290 and the number of estimated service request is 3,100.
A $1,000 bond with a coupon rate of 10% has a required return of 8% and 10 years to maturity. What is the current value of the bond?
On October 1, Year 1, Stokes Company paid Eastport Rentals $4,800 for a 12-month lease on warehouse space. Required a. Record the deferral and the related December 31, Year 1, adjustment for Stokes...
Why should each of the following be familiar with compounding and present value concepts? a. A marketing manager b. A personnel manager
What is the relationship between present value and future value?
A normal distribution is informally described as a probability distribution that is bell-shaped when graphed. Draw a rough sketch of a curve having the bell shape that is characteristic of a normal...
Describe the use of the break-even concept with respect to the management of cash.
In the CAPM, one of the assumptions is that investors have common (homogeneous) beliefs about the return distribution of assets. What is the common assumption about the asset return generating...
Why is managing the firms level of accounts receivable important?
What is credit scoring, and how is it used to manage accounts receivable?
What are the key decision variables at the firms disposal for managing the level of the firms accounts receivable balance?
This experiment has two mutually exclusive events, $A$ and $\bar{A}$, that form a partition of the sample space $S$. The number of elements in each set is shown in each region. Find the...
Using thermodynamic data from Appendix 4, calculate G at 258C for the process: 2SO 2 (g) + O 2 (g) 88n 2SO 3 (g) where all gases are at 1.00 atm pressure. Also calculate DG8 at 258C for this same...
Compute and sketch the vector assigned to the points P = (1, 2) and Q = (1, 1) by the vector field F = (x 2 , x).
Upton Computers makes bulk purchases of small computers, stocks them in conveniently located warehouses, and ships them to its chain of retail stores. Upton's balance sheet as of December 31, 2004,...
Stevens Textile's 2004 financial statements are shown below. Stevens Textile: Balance Sheet as of December 31, 2004 (Thousands of Dollars) Suppose 2005 sales are projected to increase by 15 percent...
Garlington Technologies Inc.'s 2004 financial statements are shown below. Garlington Technologies Inc.: Balance Sheet as of December 31, 2004 Suppose that in 2005 sales increase by 10 percent over...
Apple has purchased land for $500,000 for their new factory. They make a down payment of $100,000, and the remainder is financed at (AAA+10) percent compounded semi-annually with semi-annual payments...
Task: Sarah is a 32 year old accounting executive who recently married her partner of 6 years, Austin. Sarah and Austin have decided they would like to try for a baby. Sarah has concerns around her...
Suppose CORP generates $100M in revenue by selling products currently in the firm's inventory. The sales are paid in cash and have a COGS of $80M. What is the effect of these sales on CORP's NOPAT...

Explain what is meant by the Rule of 72.How can it be used in finance applications?

Question:

Step by Step Answer:

The Rule of 72 can be used to determine the approximate number of years it takes for an ...View the full answer

Contemporary Financial Management

Students also viewed these Corporate Finance questions