Johnstone Supply Company Has $100,000 to Invest

question 57

Essay

Johnstone Supply Company has $100,000 to invest.Determine the amount of money Johnstone will have at the end of 5 years in each of the following independent situations:
(
A)Johnstone invests the $100,000 to earn 7% interest compounded annually.
(b)Johnstone invests the $100,000 to earn 6% compounded semiannually.
(c)Johnstone invests the $100,000 to earn 4% compounded quarterly.

• A)Johnstone invests the $100,000 to earn 7% interest compounded annually.
• (b)Johnstone invests the $100,000 to earn 6% compounded semiannually.
• (c)Johnstone invests the $100,000 to earn 4% compounded quarterly.

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Definitions:

Perfectly Competitive

A market structure characterized by a large number of small firms, homogenous products, perfect information, and free entry and exit, leading to price taking behavior.

Five Forces Model

A framework developed by Michael Porter to analyze the level of competition within an industry and business strategy development, which includes the threat of new entrants, the threat of substitutes, the bargaining power of buyers, the bargaining power of suppliers, and competitive rivalry.

Product Differentiation

The process of distinguishing a product or service from others to make it more attractive to a particular target market.

Cartel

A group of firms that gets together and makes joint price and output decisions to maximize joint profits.