Answer:
$22750
Explanation:
Calculation for What is Hofnim's net income for the month of September
Hofnim's NET INCOME
Fees Earned 64,000
Less Miscellaneous Expense (19,700)
Less Rent Expense (5,100)
Less Wages Expense (16,450)
NET INCOME $22,750
Therefore the NET INCOME will be $22,750
Answer:
- <u><em>Option B. $1,025 a month for 10 years.</em></u>
Explanation:
Calculate the present value of each option:

Formula:
![PV=C\times \bigg[\dfrac{1}{r}-\dfrac{1}{r(1+r)^t}\bigg]](https://tex.z-dn.net/?f=PV%3DC%5Ctimes%20%5Cbigg%5B%5Cdfrac%7B1%7D%7Br%7D-%5Cdfrac%7B1%7D%7Br%281%2Br%29%5Et%7D%5Cbigg%5D)
Where:
- PV is the present value of the constant monthly payments
- r is the monthly rate
- t is the number of moths
<u>1. Option A will provide $1,500 a month for 6 years. </u>
![PV=$\ 1,500\times \bigg[\dfrac{1}{(0.005\overline 6}-\dfrac{1}{0.005\overline 6(1+0.005\overline 6)^{(6\times12)}}\bigg]](https://tex.z-dn.net/?f=PV%3D%24%5C%201%2C500%5Ctimes%20%5Cbigg%5B%5Cdfrac%7B1%7D%7B%280.005%5Coverline%206%7D-%5Cdfrac%7B1%7D%7B0.005%5Coverline%206%281%2B0.005%5Coverline%206%29%5E%7B%286%5Ctimes12%29%7D%7D%5Cbigg%5D)

<u>2. Option B will pay $1,025 a month for 10 years. </u>
![PV=$\ 1,025\times \bigg[\dfrac{1}{(0.005\overline 6}-\dfrac{1}{0.005\overline 6(1+0.005\overline 6)^{(10\times12)}}\bigg]](https://tex.z-dn.net/?f=PV%3D%24%5C%201%2C025%5Ctimes%20%5Cbigg%5B%5Cdfrac%7B1%7D%7B%280.005%5Coverline%206%7D-%5Cdfrac%7B1%7D%7B0.005%5Coverline%206%281%2B0.005%5Coverline%206%29%5E%7B%2810%5Ctimes12%29%7D%7D%5Cbigg%5D)

<u>3. Option C offers $85,000 as a lump sum payment today. </u>
<u></u>
<h2 /><h2> Conclusion:</h2>
The present value of the<em> option B, $1,025 a month for 10 years</em>, has a the greatest present value, thus since he is only concerned with the <em>financial aspects of the offier</em>, this is the one he should select.