Answer:
$5,765.35
Explanation:
Preparation of the present value of your windfall if the appropriate discount rate is 8%
To find the present value we are going to use this formula
PV = FV / (1 + r)^t
Where,
FV=$2,000,000
r=8%
t=76
Let plug in the formula
PV = 2,000,000 / (1 + .08)^⁷⁶
PV = $2,000,000 / (1.98)^⁷⁶
PV=$2,000,000/346.90
PV=$5,765.35
Therefore the present value will be $5,765.35
Answer:
An increase of $9,833
Explanation:
The accounting equation defines the relationship between the elements of the balance sheet. These are the asset , liabilities and equity. It is given as
Assets = Liabilities + Equity
Given that total liabilities decreased by $24,119 during a period of time and stockholders' equity increased by $33,952 during the same period,
Effect on asset
= - $24,119 + $33,952
= + 9833
The amount and direction (increase) of the periods change in total assets is an increase of $9833.
Answer: A Contract was formed on February 5th
Explanation:
The contract was formed the very day that Bob mailed Ann his acceptance which was on the 5th of February.
Ann attempted to revoke the acceptance too late as she did it a day after he had emailed his acceptance even though she only received it on the 7th.
The date she received the acceptance is of no consequence because this falls under the Posting Rule. This rule in Common Law countries essentially states an agreement is made as soon as the letter is posted even if it never gets to it's destination.
Answer:
a. The probability of default is zero.
Explanation:
A bond is a fixed income security that investors can buy. It can either be a zero-coupon bond which does not pay fixed coupons or a coupon-paying bond which pays coupons . When a bond is held to maturity by the bondholder, YTM(Yield to Maturity) will be the rate of return on an assumption that the probability of defaulting in payments is zero
Given:
<span>5-year CD for $6800 with an APR of 2.8%, compounded quarterly,
Pretermination - 9 months early.
Pretermination fees - The early redemption fee for the CD is 3 months' interest on the original principal.
To get the periodic rate, APR must be divided by the number of days either 360 or 365 then multiplied by 30 for monthly rate.
2.8% / 360 = 0.0078%
0.0078% x 30 = 0.2333%
0.2333% x 3 = 0.70% PERIODIC RATE (QUARTERLY RATE)
5 years * 4 quarters = 20 quarters
9 months * 1 qtr/ 3mos = 3 quarters
20 quarters - 3 quarters = 17 quarters that Laurie kept her CD.
A = P(1+r/n)^nt
A = 6,800 (1+0.007)^17
A = 6,800 (1.1259)
A = 7,656.1408 - Value of Laurie's money before pretermination
Interest earned: 7,656.1408 - 6,800 = 856.1408
Early redemption fee: 6,800 x 0.7% = 47.60
Net interest earned: 856.1408 - 47.60 = 808.5408 or 808.54
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