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MakcuM [25]
3 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]3 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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It's an example of, Factors such as domestic demand and domestic rivalry explaining nations' dominance in production.

Domestic demand forecast. Final domestic demand is the total of ultimate consumption, investment associate degreed stock building expenditures by the personal and general government sectors in real terms. Total Domestic Demand (TDD) is the Final Domestic Demand and the worth of physical changes in stocks. TDD contains several of the weather accustomed calculate Gross Domestic Product (GDP) by the Expenditure Method, and then it's an indicator of what proportion the economy as an entire is growing.

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3 0
1 year ago
An invoice is an example of which of the following?
Scilla [17]

A source document

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8 0
3 years ago
A buyer is concerned about making changes to a historic property he wants to purchase. Who should the buyer consult?
Andreas93 [3]

Answer:

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4 0
3 years ago
Dehner Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hou
Butoxors [25]

Answer:

$5625.60

Explanation:

number of units produced =50 units

direct labour hours 100

direct materials $ 680

Direct labor cost $ 7,000

The unit product cost for Job P951 is;

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Direct labor cost $ 7,000

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total fixed manufacturing overheads= $ 273,000

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unit product cost=$28,1280/50

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5 0
3 years ago
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2,500 x 3 months = 7,500

Journal Entry, Dec 31:
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The new Unearned Rent Revenue Account balance will be:
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3 years ago
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