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user100 [1]
3 years ago
13

9. Assume that you just won $35 million in the Florida lottery, and hence the state will pay you 20 annual payments of $1.75 mil

lion each beginning immediately. If the rate of return on securities of similar risk to the lottery earning (e.g, the rate on 20 year US Treasury bonds) is 6 percent, what is the present value of your winning
Business
1 answer:
Morgarella [4.7K]3 years ago
8 0

Answer:

$11.47 million

Explanation:

The present value of an annuity is determined by:

PV = P*[\frac{1-(1+r)^{-n}}{r}]

With annual payments (P) of $1.75 million, for a period (n) of 20 years at a discount rate (r) of 6 percent, the present value is:

<u />PV = 1.75*[\frac{1-(1+0.06)^{-20}}{0.06}]\\PV=\$11.47\ million<u />

The present value of your winning is $11.47 million

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Other things the same, if the interest rate falls, then a. firms will want to borrow more, which increases the quantity of loana
Svet_ta [14]

Answer: (a).

Annexure: <u>Since a part of the information was found missing in the question, a similar question has been provided as an attachment for reference. </u>

If the interest rate falls with other things remaining constant, a firm would like to raise more money via debt instruments.

This will lead to an increase in the quantity of loanable funds demanded.

This would further lead to increase in the level of invested funds by the public as it would get cheaper for the corporates to avail loans.

7 0
3 years ago
Flounder Corporation reported net income of $331,840 in 2020 and had 186,000 shares of common stock outstanding throughout the y
m_a_m_a [10]

Answer:

Diluted earnings per share is $1.7 per share

Explanation:

The number of diluted  shares from the options is calculated thus

Total number of shares from options                                     34,500      

Actual number of shares that can be purchased

(options shares*option price/share market price)

(34,500*$11/$15)                                                                        (25,300)

Diluted shares                                                                           9,200

Diluted earnings per share=net income/(outstanding common stock + diluted common stock)

net income is $331,840

outstanding common stock is 186,000

diluted common stock is 9200

diluted earnings per share=$331,840/(186,000+9200)

                                            =$1.7 per share

3 0
3 years ago
Johnston Company wants to double production of Product X from 1,000 units to 2,000 units. The variable manufacturing cost per un
ratelena [41]

Answer: C - $30,000

Explanation: Johnston Company wants to double production of Product X from 1,000 units to 2,000 units.

The variable manufacturing cost per unit is $10. The variable non manufacturing cost per unit is $20.

The selling price per unit is $50

To increase production by 1000 units

Total cost is $10 + $20 = $30

Total incremental cost = 1,000 * $30= $30,000

7 0
3 years ago
Multiple choice!
kodGreya [7K]

Answer:

Spillover cost.

Explanation:

Spillover cost refers to those costs or changes in the value of a certain good that are caused by issues external to the intrinsic characteristics of said good. Thus, for example, external influences such as limitations on oil extraction or the development of electric cars can generate a massive drop in the prices of conventional gasoline cars. Another clear example of this situation is the one described in the question, where a negative change in a certain neighborhood can lower the prices of the houses found there.

7 0
2 years ago
Specific development, pricing, promotion, and distribution of products that do less harm to the environment are known as:______
stellarik [79]

Answer:

C). green marketing.

Explanation:

Green marketing can be regarded as the marketing of products/services which are presumed as an environmentally safe products. It involves range if activities such as modifications of products, change in process of production, modifications of advertisement as well as sustainability packaging of products. It should be noted that Specific development, pricing, promotion, and distribution of products that do less harm to the environment are known as green marketing

8 0
2 years ago
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