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MakcuM [25]
2 years ago
9

You are thinking of building a new machine that will save you $ 2 comma 000 in the first year. The machine will then begin to we

ar out so that the savings decline at a rate of 4 % per year forever. What is the present value of the savings if the interest rate is 7 % per​ year?
Business
1 answer:
Serga [27]2 years ago
4 0

Answer:

Present Value= $18,181.82

Explanation:

Giving the following information:

Savings= $2,000

The machine will then begin to wear out so that the savings decline at a rate of 4 % per year forever.

Interest rate= 7%

To determine the present value of the savings, we need to use the perpetual annuity formula with the decline rate.

PV= Cf/ (i + g)

Cf= cash flow

PV= 2,000/ (0.07 + 0.04)

PV= $18,181.82

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According to the semistrong form of the efficient markets hypothesis, ____________.A. stock prices do not rapidly adjust to new
solmaris [256]

Answer:

The correct answer is option B.

Explanation:

According to the efficient market hypothesis, when the market is in semi-strong form the future changes in the stock prices cannot be predicted by the publicly available information.  

The stock prices quickly adjust to all the publicly available information. In this situation, an investor can earn above-average returns if he possesses private information which is not available to all.

3 0
3 years ago
PAW Industries has 5 million shares of common stock outstanding with a market price of $8.00 per share. The company also has out
AlladinOne [14]

Answer:

A. 10.14%

Explanation:

1.Market value of PAW common stock:5,000,000*8=$40,000,000

2.Market value of PAW outstanding preferred stock=$10,000,000

3.Market value of PAW bonds outstanding=96,000,000(100,000*1000*96%)

Total Market value(1+2+3)=146,000,000

4.Cost of equity amount on common stock(19%*40,000,000)=7,600,000

5.Cost of preferred stock amount (15%*10,000,000)=$1,500,000

6.After tax cost of Debt amount(9%*66%*96,000,000)=$5,702,400

Total cost amount(4+5+6)=14,802,400

The WACC can be calcualted as: Total cost amount/Total market value

                                                        14,802,400/146,000,000=10.14%

The answer should be A. 10.14%

3 0
3 years ago
The board of governors of the federal reserve system can increase commercial bank reserves by
Marina CMI [18]
<span>The board of governors of the federal reserve system can increase commercial bank reserves by increasing the size of its term auction facility.</span>
3 0
2 years ago
Wilma is one of five equal members of Polar, LLC. This year, Polar generates $5 million in profits. The company reinvests $4 mil
bogdanovich [222]

Answer:

c. Wilma (and each of the members) pays taxes on their $1 million share ($5 million divided by 5) of profits.

Explanation:

Data provided in the questions

Generated profits = $5 million

Reinvested amount into the company = $4 million

Out of which $1 million is to be divided equally

based on the above information, the federal income tax should be paid by 5 members of $1 million each

Hence, the option c is correct  

And all other options are wrong

3 0
3 years ago
A metal sphere of radius 15 cm has a net charge of 3.0 $ 10#8 C. (a) What is the electric field at the sphere’s surface? (b) If
denis-greek [22]

Answer:

E = 1.20 × 10^{4} N/C

V = 1800 V

x = 0.058 m

Explanation:

given data

radius = 15 cm

net charge = 3 × 10^{-8} C

electric potential decreased = 500 V

solution

we get here electric field at the sphere’s surface that is

electric field at the sphere’s surface E  =  \frac{q}{4\pi \epsilon _o R^2}   ............1

put here value

electric field at the sphere’s surface E  = \frac{3\times 10^{-8}\times 8.99\times 10^9}{ 0.15^2}    

E = 1.20 × 10^{4} N/C

and

potential on surface of sphere is

V =  \frac{q}{4\pi \epsilon _o R} ................2

V = \frac{3\times 10^{-8}\times 8.99\times 10^9}{ 0.15}  

V = 1800 V

and

now we get distance that is x

and we know here

ΔV = V(x) - V   ..............3

substitute here value

-500V = \frac{q}{4\pi \epsilon _o } \times (\frac{1}{R+x} - \frac{1}{R})

-500 V = {3\times 10^{-8}\times 8.99\times 10^9} \times (\frac{1}{0.15+x} - \frac{1}{0.15})

solve it we get x

x = 0.058 m

3 0
2 years ago
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