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Murrr4er [49]
3 years ago
7

Sydney wins a prize. She has a choice of receiving a payment of $160,000 immediately or of receiving a deferred perpetuity with

$10,000 annual payments, the first payment occurring in exactly four years. Which has a greater present value if the calculation is based on an annual effective interest rate of 5%? How about if the annual effective rate used is 6%? What real life considerations should enter into Sydney’s choice besides maximizing her present value?
Business
1 answer:
Mamont248 [21]3 years ago
5 0

Answer:

Instructions are listed below

Explanation:

Giving the following information:

She has a choice of receiving a payment of $160,000 immediately or of receiving deferred perpetuity with $10,000 annual payments, the first payment occurring in exactly four years.

A) i= 5%

First, we need to determine the value of the perpetuity four years from now.

Perpetuity= 10,000/0.05= 200,000

Now, we can calculate the present value:

PV= 200,000/(1.05^4)= $164,540.50

B) i= 6%

Perpetuity= 10,000/0.06= $166,666.67

PV= $166,666.67/1.06^4= $132,015.61

C) She should consider her necessities of cash and the value of the products she can purchase now.

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Process redesign: a. is the fundamental rethinking of business processes. b. is sometimes called process reengineering. c. tries
notsponge [240]

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e. All of these is the correct answer.

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4 0
3 years ago
Macee Department Store has three departments, and it conducts advertising campaigns that benefit all departments. Advertising co
DerKrebs [107]

Answer:

Results are below.

Explanation:

Giving the following information:

Estimated overhead costs= $130,000

Total sales= 201,000 + 314,900 + 154,100= $670,000

<u>First, we need to calculate the predetermined overhead rate:</u>

<u></u>

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Predetermined manufacturing overhead rate= 130,000 / 670,000

Predetermined manufacturing overhead rate= $0.194 per sales dollar

<u>Now, we can allocate overhead:</u>

<u></u>

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

1= 201,000*0.194= 38,994

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8 0
3 years ago
A company wants to set up operations in a country with the following corporate tax rate structure: Taxable Income Tax Rate &lt;$
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Answer:The company should pay $3,000 in taxes

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$50,000 - $75,000 ----25%

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Our calculate taxable income is less than <50,000, ie $20,000 from our Gross revenue

The  gross tax liability, will now be  15% of $20,000=0.15 x 20,000= $3000

The company should pay $3,000 in taxes

6 0
3 years ago
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