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2 years ago

When Marilyn Monroe died, ex-husband Joe DiMaggio vowed to place fresh flowers on her grave every

1 answer:

4 0

Based on the cost of the flowers and the number of years Joe DiMaggio was expected to live, the present value of the commitment was $2,389.26.

<h3>How much is the present value of the commitment?</h3>

First convert the interest and period to weekly figures:

Period:

= 52 x 30

= 1,560 weeks

Interest:

= 10.4% / 52

= 0.2% weekly

The present value will be that of an annuity because the amount is constant every week:

= Amount x (1 - (1 + rate) ^ -number of periods) / rate

= 5 x (1 - ( 1 + 0.2%) ⁻¹⁵⁶⁰) / 0.2%

= $2,389.26

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Pribuss Engineering prepares its financial statements according to International Financial Reporting Standards. During 2018, the company incurred the following costs related to a new product design:

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The Research expenses of $2.4M that are written as expense in the Income statement and the Development costs of $1.3M and patent legal fees of $53k are capitalized.

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Results are below.

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