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
dem82 [27]
3 years ago
10

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:
kodGreya [7K]3 years ago
4 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

You might be interested in
Describe the life cycle of a product and explain profitability and sales volume at each stage
Helga [31]

Answer:

Product Life Cycle: Overview

The product life cycle (PLC) describes a product's life in the market with respect to business/commercial costs and sales measures. It proceeds through multiple phases, involves many professional disciplines and requires many skills, tools and processes.

This is not to say that product lives cannot be extended – there are many good examples of this – but rather, each product has a ‘natural’ life through which it is expected to pass.

The stages of the product life cycle are:

Introduction

Growth

Maturity

Decline

PLC management makes these three assumptions:

Products have a limited life and, thus, every product has a life cycle.

Product sales pass through distinct stages, each of which poses different challenges, problems and opportunities to its parent company.

Products will have different marketing, financing, manufacturing, purchasing and human resource requirements at the various stages of its life cycle.

The product life cycle begins with the introduction stage (see ). Just because a product successfully completes the launch stage and starts its life cycle, the company cannot take its success for granted.

image

Product Development and Product Life Cycle: The Product Life Cycle follows directly after new product development.

A company must succeed at both developing new products and managing them in the face of changing tastes, technologies and competition. A good product manager should find new products to replace those that are in the declining stage of their life cycles; learning how to manage products optimally as they move from one stage to the next.

Product Lifecycle Management Stage 1: Market Introduction

This stage is characterized by a low growth rate of sales as the product is newly launched and consumers may not know much about it. Traditionally, a company usually incurs losses rather than profits during this phase. Especially if the product is new on the market, users may not be aware of its true potential, necessitating widespread information and advertising campaigns through various media.

However, this stage also offers its share of opportunities. For example, there may be less competition. In some instances, a monopoly may be created if the product proves very effective and is in great demand.

Characteristics of the introduction stage are:

High costs due to initial marketing, advertising, distribution and so on.

Sales volumes are low, increasing slowly

There may be little to no competition

Demand must be created through promotion and awareness campaigns

Customers must be prompted to try the product.

Little or no profit is made owing to high costs and low sales volumes

Growth

During the growth stage, the public becomes more aware of the product; as sales and revenues start to increase, profits begin to accrue.

Explanation:

4 0
2 years ago
FIRST PERSON TO ANSWER PROPERLY GETS BRAINLIEST!!!
TiliK225 [7]
School district administrators
4 0
3 years ago
Read 2 more answers
What is an essential government role in market economies select one of the options below as your answer:
slavikrds [6]
The correct answer to this question is letter "b. to prevent monopolies and collusion." An essential government role in market economies is <span>to prevent monopolies and collusion. If it happens that there is monopoly and collision, then it will be a big problem to consumer.</span>
3 0
2 years ago
Read 2 more answers
If a 20 percent increase in the price of red bull energy drinks results in a decrease in the quantity demanded of 25 percent, th
yanalaym [24]

The correct answer is that the price elasticity of demand is elastic.

Price elasticity occurs when a change in price results in a change in demand. In this example, a 20 percent increase in the price of the drinks resulted in a 25 percent decrease in the demand for the product. Because the price increase resulted in a demand decrease the price is elastic.

4 0
3 years ago
OK YALL IM AT STARBUCKS WHAT YALL WANT ;D
zlopas [31]
Frappuccino please i crave caffeine
5 0
3 years ago
Read 2 more answers
Other questions:
  • Hank earns per hour with timeandahalf for hours in excess of per week. He worked hours at his job during the first week of March
    12·1 answer
  • Lance Lawn Services reports warranty expense by estimating the amount that eventually will be paid to satisfy warranties on its
    13·1 answer
  • Some reasons that counselors may not be interested in working with older adults are ________.
    8·1 answer
  • Luis is going to receive $20,000 six years from now. Soo Lee is going to receive $20,000 nine years from now. Which one of the f
    14·1 answer
  • Suppose a stock had an initial price of $92 per share, paid a dividend of $2.30 per share during the year, and had an ending sha
    10·1 answer
  • The fifth step of the interview process is:
    8·1 answer
  • Mest Company has 9 employees. FICA Social Security taxes are 6.2% of the first $118,500 paid to each employee, and FICA Medicare
    13·1 answer
  • Fran, a spokesperson for her company, gives a speech harshly criticizing the mayor and his business policies. Fran's boss, howev
    14·1 answer
  • What is true of people who are motivated by the need for achievement?
    15·1 answer
  • A firm has a marginal cost of $20 and charges a price of $40. the lerner index for this firm is? 0.33. 0.20. 0.50. 0.75.
    13·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!