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vova2212 [387]
3 years ago
13

Slick Sam has a special relationship with his banker. The nature of the relationship is as follows: The bank owes Sam $100 per y

ear forever. The 1st payment is due in 1 year. The bank will borrow or lend money to Sam at a constant effective rate of i per year. Today, Sam calculated the present value of the payments that are due to him as X. Sam can receive his first 16 payments at the end of year 16 in a lump sum. If he does that, then the total value of the lump sum and future payments at the end of the sixteenth year is X + 2,000. Calculate X.
Business
1 answer:
joja [24]3 years ago
7 0

Answer:

X=97.24

Explanation:

PV = Present Value = X+2000 by the 16th years

PMT = Payments = $100

FV = Future Value = 2000 at the end of 16 years

n= number of years

Applying the equation of future value for annuity

FV = pmt* ​((1+r)ⁿ - 1   )/r

Inputting the values;

2000=100*((1+r)¹⁶-1)/r

Solving for r, gives r = 2.9%

Therefore using the formula for PV for annuity;

PV=PMT*(1-(1/1+r)/r)

X=100*(1-(1/1.029)/0.029

X=100*((1-0.9718)/0.029)

X=100*(0.0282/0.029)

X=97.24

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sertanlavr [38]

Answer:

C) management believes earnings growth will be strong going forward.

Explanation:

Dividend is the percentage of income that the corporation aims to allocate to the company's shareholders. When there is an rise in dividend it means that the company will have good results for the future. The rise in the dividend is a prediction of future profitability for the firm.

Plus it would be distributed to the preferred shareholders and the equity shareholders and the preference is given first to preferred shareholders

6 0
3 years ago
Miller’s Dairy produces 960 gallons of milk per day. Each milker at the dairy works 8 hours per day and produces the same number
IrinaK [193]

Answer:

The correct answer is option b.

Explanation:

A dairy is producing 960 gallons of milk per day.

Each milker works 8 hours and produces the same amount of milk.

For per hour of labor the diary produces 12 gallons of milk.

Quantity of milk produced by a labor in 8 hours

= Production\ in\ one\ hour\times No.\ of\ hours

= 12\times 8

= 96 gallons

The number of workers required to produce 960 gallons per day

= \frac{Total\ daily\ Production}{Daily\ production\ by\ each\ labor}

= \frac{960}{96}

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6 0
3 years ago
Percy Corporation was formed on January 1. The corporate charter authorized 100,000 shares of $10 par value common stock. During
dimulka [17.4K]

Answer:

paid in capital in excess of par value = $2000

and There will be a debit to Organisation expenses for $4,700

Explanation:

given data

charter authorized = 100,000 shares

common stock = $10 par value

issued  = 270 shares      

payment = $4,700        

solution

we know here that

Paid up value of the stock = $10 per share

and here shares issue to the attorney satisfying the organisation expenses is 270 shares

so common stock = 270 shares × $10

common stock =  $2700

so paid in capital in excess of par value = $2000

and There will be a debit to Organisation expenses for $4,700

8 0
3 years ago
During the month of June, Indigo Boutique recorded cash sales of $274,990 and credit sales of $165,636, both of which include th
julsineya [31]

Answer and Explanation:

The journal entry is shown below

Sales tax (($257,000 + $154,800) ×7%) $28,826

      To sales tax payable $28,826

(Being the sales tax expense is recorded)

Here the sales tax is debited as it increased the expense and credited the sales tax payable as it also increased the liability

The calculation is as follows;

= $27,4990 ×100 ÷ 107

= $257,000

And,

= $165,636 × 100 ÷ 107

= $154,800

4 0
3 years ago
For the purchase of a smartphone, an independent rating agency indicates that many consumers use price, display, camera quality,
Juliette [100K]

Quality is used to assesses the dimension of the products for reaching its fame among customers.

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3 0
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