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Nina [5.8K]
3 years ago
12

Your parents have made you two offers. The first offer includes annual gifts of $4,000, $4,500, and $5,200 at the end of each of

the next three years, respectively. The other offer is the payment of one lump sum amount today. You are trying to decide which offer to accept given the fact that your discount rate is 9.7 percent. What is the minimum amount that you will accept today if you are to select the lump sum offer
Business
1 answer:
____ [38]3 years ago
5 0

The minimum amount that you will accept today if you are to select the lump sum offer is $11,324.66.

<h3>What is the present value of the cash flows?</h3>

The minimum amount that you will accept today if you are to select the lump sum offer is known as the present value of the cash flows. Present value is the sum of discounted cash flows.

Present value = ($4000 / 1.097) +  ($4500 / 1.097²) +  ($5200 / 1.097³) = $11,324.66

To learn more about present value, please check: brainly.com/question/26537392

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3 years ago
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C) Chester’s long-term debt will rise by $10,000,000

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Explanation:

A) As the company will do a cash dibursement will be considered cash use and because is investing on it to increase future cash flow

B) A period cost is a cost which cannot be capitalized into an asset. As cost which occur as the time passes over the years Which is the case for depreciation expense

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3 years ago
The Boston Consulting Group’s Growth-Share Matrix classifies a firm’s products into four categories based on growth rates of the
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Scott was denied the loan because he was not old enough to qualify.

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Payday loan is a type of unsecured loan in which high rate of the interest is given to the borrower. It is a kind of the short term loan basically for the two weeks.

According to the above situation, Scott is cannot get the payback loan because he is  minor to sanction a loan. He must have the age of 18 years or above.

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