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Black_prince [1.1K]
2 years ago
13

In the year 2000, McDonald's was running a game called Monopoly. For every item you purchased at the restaurant, you earned a ti

cket to enter into the game. The highest prize offered two options: (a) $1,000,000 in one installment; or (b) $100,000 to be paid annually during 15 years, starting with one installment at the year 2000. Suppose that the interest rate is 10%. Which option would a savvy financial investor prefer
Business
1 answer:
mamaluj [8]2 years ago
5 0

Option a - $ 1000000 in one instalment

Option b - $100000 to be paid annually during 15 years, starting with one instalment at the year 2000

Interest rate = 10%

Which option would a savvy financial investor prefer

PV of Option a = 1000000 * 1 = $ 1000000

PV of option b = 100000 * PVIFA(10%,15)

PV of option b = 100000 * 7.6060795 = $ 760608

The PV of option a is higher, hence prefer the option a

Learn more about financial investor here brainly.com/question/25572872

#SPJ4

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The owner of Marshall Restaurant is disappointed because the restaurant has been averaging 7,500 pizza sales per month, but the
Troyanec [42]

Answer:

No of units                6,000            7,500       10,000  

Total fixed cost              $12,000.00   $12,000.00   $12,000.00  

Total variable cost         $9,000.00     $11,250.00   $15,000.00  

Total cost                 $21,000.00   $23,250.00   $27,000.00  

Fixed cost per pizza  $2.00                $1.60   $1.20  

Variable cost per pizza  $1.50                 $1.50   $1.50  

Average cost per pizza  $3.50                $3.10   $2.70  

3 0
3 years ago
An investor wants to save money over a long period of time. This investor does not need to have easy access to the money and is
Mariana [72]

If an investor wants to save money over a long period without easy access to the money and knowing the interest rate will not change, they need <u>A. Bonds</u>.

<h3>What are bonds?</h3>

Bonds are securities that guarantee the return of capital and periodic interests on a long-term basis.

Types of Bonds include:

  • U.S. Treasury Bonds
  • Corporate Bonds
  • Municipal Bonds.

Thus, if an investor wants to save money over a long period without easy access to the money and knowing the interest rate will not change, they need <u>A. Bonds</u>.

Learn more about long-term investments at brainly.com/question/17050326

#SPJ1

6 0
2 years ago
A market situation where a small number of sellers compose the entire industry is called
Nadusha1986 [10]

Answer:

The correct answer is: oligopoly.

Explanation:

A market structure where there are only a few firms is called an oligopoly market. These firms can be producing either identical products or differentiated products.  

Because of few firms, there is a high degree of competition in the market. The firms are price makers and face a downward sloping curve.  

There is interdependence in the market such that the economic decisions of a firm affects the price, profits and output level of its rivals. So the firms have to consider the reaction of its rivals before making an economic decision.

4 0
3 years ago
The CAPM is a multi-period model that takes account of differences in securities' maturities, and it can be used to determine th
stich3 [128]

Answer:

B. False

Explanation:

Capital Asset Pricing Model (CAPM) is an indicator that shows the relationship between the expected return and the risk of investing in a particular security.

This model is used to examine securities and their given prices, haven stated the expected rate of return and cost of capital involved.

CAPM is used by investors to make wise decision before investing their funds in a particular security.

3 0
3 years ago
MFG Company experiences the following cost behavior patterns each week: Fixed costs: supervisor’s salary $3,000; factory rent $6
s2008m [1.1K]

Answer:

Total cost= $204,750

Explanation:

Giving the following information:

Fixed costs: supervisor’s salary $3,000; factory rent $6,500

Mixed costs: utilities $3,500 + $10.25 per unit

Variable costs per unit:

manufacturing labor wages $30.00

supplies used in production $13.50

packaging cost $7.25

warranty cost $4

Required: Compute total costs to be incurred for a week with 2,950 units of activity.

Fixed costs= 3,000 + 6,500 + 3,500= $13,000

Variable costs= (10.25 + 30 + 13.5 + 7.25 + 4)*2,950= $191,750

Total cost= $204,750

4 0
3 years ago
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