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Iteru [2.4K]
4 years ago
12

Compute the present value of an ordinary annuity that pays $13,000 per year for 15 years at 10%.

Business
1 answer:
Georgia [21]4 years ago
8 0

Answer:

option (a) $98,878

Explanation:

Given:

Annuity = $13,000

Time = 15 years

Rate = 10%

now,

Present value = Annuity × ( Annuity factor for 15 year and rate 10% )

from the table the annuity factor can be found out by using the table provided in the question

pointing to the value common in the row of 15 and column of 10% i.e (7.606)

thus,

or

Present value = $13,000 × ( 7.606 )

or

Present value = $98,878

hence the correct answer is option (a) $98,878

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An investor owns $3,000 of Adobe Systems stock, $6,000 of Dow Chemical, and $7,000 of Office Depot. What are the portfolio weigh
Drupady [299]

Answer:

0.1875; 0.375; 0.4375

Explanation:

Given that,

Adobe Systems stock = $3,000

Dow Chemical = $6,000

Office Depot = $7,000

Total Value of stock:

= Adobe Systems stock + Dow Chemical + Office Depot

= $3,000 + $6,000 + $7,000

= $16,000

Portfolio weights of Adobe Systems stock:

= Value of Adobe Systems stock ÷ Total Value of stock

= $3,000 ÷ $16,000

= 0.1875

Portfolio weights of Dow Chemical stock:

= Value of Dow Chemical stock ÷ Total Value of stock

= $6,000 ÷ $16,000

= 0.375

Portfolio weights of Office Depot stock:

= Value of Dow Chemical stock ÷ Total Value of stock

= $7,000 ÷ $16,000

= 0.4375

3 0
3 years ago
As the price of samosas (a kind of food in india) was raised from 2 to 3 rupees (indian currency), their quantity demanded fell
Scorpion4ik [409]

Answer: Elasticity of demand of samosas is 0.6

Explanation:

Price elasticity of demand measures the responsiveness of quantity demanded to a change in the price of the good. It can be measured using the mid-point method,

e=\frac{Q2 -Q1}{\frac{Q 1 + Q2}{2} } * \frac{\frac{P1+P2}{2} }{P2 - P1}

e=\frac{12,000 - 15,000}{\frac{15,000 + 12,000}{2} } * \frac{\frac{2+3}{2} }{3 - 2}

e=\frac{- 3,000}{13,500} * \frac{2.5}{1}

e= 0.22*2.5 = 0.5555

Therefore, elasticity of demand is 0.6

5 0
4 years ago
Suppose the price of X is​ $5 and the price of Y is​ $10 and a hypothetical household has​ $500 to spend per month on good
Neporo4naja [7]

Answer:

Please see attachment

Explanation:

Please see attachment

7 0
4 years ago
a. If Canace Company, with a break-even point at $960,000 of sales, has actual sales of $1,200,000, what is the margin of safety
Gnoma [55]

Answer:

(A)

240,000 margin of safety in dollars

20% as percent of sales

(B)

actual sales= 11,250,000

Explanation:

current \:sales - BEP_{USD} = margin \: of \: safety

1,200,000 - 960,000 = 240,000 margin of safety in dollars

\frac{current \:sales - BEP_{USD}}{current \:sales} \times 100 = margin \: of \: safety

\frac{1,200,000 - 960,000}{1,200,000} \times 100 = margin \: of \: safety

240,000/1,200,000 = 0.2 x 100 = 20%

For B we will determinate the BEP in dollars and then add the 20% margin of safety.

\frac{Fixed\:Cost}{Contribution \:Margin \:Ratio} = Break\: Even\: Point_{dollars}

\frac{1,875,000}{0.2} = Break\: Even\: Point_{dollars}

BEP = 9,375,000

BEP x ( 1+margin of safety) = actual sales

BEP x (1 + 20%) = 11,250,000

7 0
3 years ago
Which sentence identifies the concept of perishability? Tourism is a service-oriented field in the goods-service continuum. Four
allochka39001 [22]

Thirdly, storage of services is not possible, as services are consumed when offered to a customer.

Answer: Option 3.

<u>Explanation:</u>

Perishable is a feature where a good or service can not be stored for long. They might get hampered and do not remain like their original self if they are stored.

Services have a perishable nature in the sense that they can not be stored like some of the goods which can be stored. The services are to be consumed then and there at the moment when they are offered to the customers. They can not be kept reserved.

3 0
3 years ago
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