Answer:
I would pay up to 81.52 dollars for the share that way I will get a 12% return at least
Explanation:
We need to calcualte the present value of the cash flow of each year using the formula for present value of a lump sum:
Dividends Present Value
1st year 3.00 2.678571429 *1
2nd year 4.25 3.38807398 *2
3rd year 106.00* 75.44870627 *3
<em>Value of the share at 12% discount rate 81.51535168</em>
*100 dollars from the sale plus 6 dollars of dividends
*1
Div: 3.00
time: 1
rate: 0.12
PV 2.678571429
*2
Dividends 4.25
time 2.00
rate 0.12000
PV 3.3881
*3
Maturity 106.00
time 3.00
rate 0.12000
PV 75.4487
Answer:
4. Martha's average utilities
Explanation:
As in the question, it is given that Martha has signed a listing agreement with the Broker Patrick.
The listing agreement refers to a contract between the real estate broker and the real estate owner that allows the broker the authority to act as a property sales agent.
The terms and conditions which are mentioned the listing contract are presented below:
a. Starting and expiration date of the contract
b. Patrick's commission
c. Martha's priced. Other terms and conditions
Answer:
$1000
Explanation:
The cash received from the equipment sale is equals to the initial cost of the equipment which is $10,000 minus total accumulated depreciation on the equipment charged till date.
Total accumulated depreciation on the equipment=Opening balance of accumulated depreciation+depreciation charge for the year-closing balance of accumulated depreciation
Total accumulated depreciation on the equipment=$22,000+$4,000-$17,000
=$9,000
cash proceeds=$10,000-$9,000=$1000
Answer:
The deal to receive $30000 is better.
Explanation:
To find the better deal we need to calculate the present value of $30000 and then compare it with the amount $25000. If the amount is greater than the $25000, then the amount should be received after the 2 years.
The given time period (n )= 2
Interest rate (r ) = 8%
The amount received after 2 years = $30000
Since the amount is more than $25000 so the deal to receive the money after 2 years will be better.
