1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Temka [501]
3 years ago
13

An investor purchasing a British consol is entitled to receive annual payments from the British government forever. What is the

price of a consol that pays $190 annually if the next payment occurs one year from today? The market interest rate is 4.2 percent. (Round your answer to 2 decimal places. (e.g., 32.16)) Present value $
Business
1 answer:
Dima020 [189]3 years ago
7 0

Answer:

               \large\boxed{\large\boxed{\$ 4,523.81}}

Explanation:

The <em>price of a consol</em> (a type of debt issued by the goverment) is the present value of all the future payments.

A constant <em>payment forever</em> is known as a constant annuity to perpetuity.

The price of a constant perpetuity is calculated with the formula:

      Price=C/r

Where C is the constant payment, equal to $190 (annually forever), and r is the opportunity cost, which you assume to be equal to the market interest rate: r = 4.2%.

Substituting:

        Price=\$ 190/(4.2\%) =\$ 190/0.042=\$ 4,523.81

You might be interested in
If more capital is produced in a given year, what can be expected to happen?
anzhelika [568]

Answer:

A

Explanation:

More money, more demand

people wouldn’t want to work long hours short pay

and with more money the Money has less value

4 0
3 years ago
The total demand for wheat in the U.S. is given by Qd = 1750 - 130 P. Domestic supply is given by, Qs = 1000 + 170 P. Price is m
yaroslaw [1]

Answer:

Equilibrium price is $2.50

Quantity of wheat is 1,425 tons

Explanation:

Please refer to the attached file.

7 0
3 years ago
Si hacemos una compra en cuenta corriente ¿ obtenemos un "descuento" en el precio de un objeto o un recargo en el mismo ?
baherus [9]

Answer:

Un recargo, pequeño, en el mismo.

Explanation:

Una cuenta corriente es una cuenta bancaria destinada a depósitos y retiros corrientes, y la utilización de cheques a tales fines. Dado que el uso de cheques como medio de pago ha disminuido a niveles muy bajos, la emisión de cheques ha disminuido y, en ocasiones, se ha abolido por completo. Sin embargo, la cuenta corriente a nombre sobrevive en algunos casos en el habla cotidiana.

El propósito de una cuenta de transacciones es usarse para una gran cantidad de depósitos y retiros. Los términos y condiciones de la cuenta normalmente incluyen el derecho a realizar un número ilimitado de transacciones con los fondos de la cuenta sin ningún tipo de bloqueo u otras medidas de limitación de liquidez. Por otro lado, el banco normalmente ofrece tasas de interés muy bajas o nulas sobre los fondos en circulación.

Hoy en día, la cuenta de transacciones a menudo está vinculada a varias formas de soluciones de banca por Internet para permitir pagos y otras transacciones a través de la computadora del cliente del banco. El banco también suele proporcionar tarjetas de cajero automático o tarjetas de débito a particulares con cuentas de transacciones.

6 0
2 years ago
Business analytics tools are used with data in the ________________ to gain insight and support decision making.
kenny6666 [7]

Answer:

Business

Explanation:

The extensive use of data and quantitative analysis to support fact-based decision making within organizations.

8 0
2 years ago
A new project would require an immediate increase in raw materials in the amount of $17,000. The firm expects that accounts paya
RUDIKE [14]

Answer:

C.) $10,000

Explanation:

Working capital is the net of current asset and current liabilities. it is a financial measure that gives insight into how liquid a company is.

Raw materials also known as Inventory and accounts payable are both current assets and current liabilities respectively hence, Incremental investment in working capital if the project is accepted

= $17,000 - $7,000

= $10,000

5 0
3 years ago
Read 2 more answers
Other questions:
  • Ronnie operates a lawn-care service. On each day, the cost of mowing the first lawn is $15, the cost of mowing the second lawn i
    11·2 answers
  • The following information is taken from the production budget for the first quarter: Beginning inventory in units 600 Sales budg
    6·1 answer
  • The greater the number of persons affected by a negative outcome, the more likely it is that marketers will recognize a problem
    11·1 answer
  • If the cross-price elasticity of demand between two goods is 1.75, then the two goods are:A) complements.B) substitutes.C) luxur
    14·1 answer
  • The market price of one package of raspberries sold in a perfectly competitive market is $7. Based on this information, what is
    8·1 answer
  • LIBOR is A. a resource used in production. B. an interest rate paid on Eurodollar loans in the London market. C. an interest rat
    8·1 answer
  • Cosmo contributed land with a fair market value of $332,500 and a tax basis of $138,000 to the Y Mountain partnership in exchang
    13·1 answer
  • Neoclassical economics and behavioral economics are similar in the assumption that people are capable of making accurate, someti
    12·1 answer
  • If the direct materials price variance is $500 favorable, and the direct materials quantity variance is $250 unfavorable, the jo
    15·1 answer
  • If the united states government lowers the income taxes on the wealthiest americans, while decreasing welfare payments to the po
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!