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san4es73 [151]
3 years ago
8

ABC Company sold the rights to use one of their patented processes that will result in them receiving cash payments of $10,000 a

t the end of every six months for each of the next five years and a lump sum payment of $20,000 at the end of the sixth year. Calculate the total present value of these payments assuming the interest rate is 10% compounded semi-annually.
Business
1 answer:
BigorU [14]3 years ago
6 0

Answer:

$77,217

$11,289

Explanation:

Fist we will calculate the present value of $10,000 payment

A fix Payment for a specified period of time is called annuity. The discounting of these payment on a specified rate is known as present value of annuity. The value of the annuity is also determined by the present value of annuity payment.

Formula for Present value of annuity is as follow

PV of annuity = P x [ ( 1- ( 1+ r )^-n ) / r ]

Where

P = Annual payment = $10,000

r = rate of return = 10% / 2  = 5%

n = number of period = 5 years x 2 semiannual payments per year = 10 payments

PV of annuity = $10,000 x [ ( 1- ( 1+ 0.05 )^-10 ) / 0.05 ]

PV of Annuity = $77,217

Now we will use the discounting method to calculate the present value of lump sum payment of $20,000

Present value = Future value x Present value factor

PV = FV x ( 1 + r )^-n

PV = $20,000 x ( 1 + 0.1 )^-6

PV = $11,289

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Answer:

The correct answer is letter "A": functional.

Explanation:

Functional changes are implemented in products to improve the benefits of an existing good or service or to fix a recurrent problem the same product used to have. In the case of Sony's design for the new plasma television, it would allow the television's remote control to be easier to use, improving the consumer experience with the good.

5 0
3 years ago
ALTOID CO. Balance Sheet At December 31, 2021 Assets: Cash $ 220 Short-term investments 550 Accounts receivable (net) 650 Invent
kumpel [21]

Answer:

3.4

Explanation:

Current assets = Cash + Short-term investments + Accounts receivable (net) + Inventory

= $220 + $550 + $800 + $1,150

= $2,720

Current ratio = Current assets / Current liabilities

Current ratio = $2,720 / $800

Current ratio = 3.4

3 0
3 years ago
Lopez Plastics Co. (LPC) issued callable bonds on January 1, 2021. LPC's accountant has projected the following amortization sch
Kobotan [32]

Answer:

c. 7%

Explanation:

According to the given scenario, the computation of the annual stated interest rate on the bonds is shown below:-

Sated interest Rate = Cash interest ÷ Face Value of the bond × 2

= $7,000÷ $200,000 × 2

= 7%

Therefore for computing the annual stated interest rate on the bonds we simply applied the above formula. hence the correct option is c

6 0
3 years ago
BG, Inc. reported the following information related to their manufacturing costs: Direct Labor $200,000; Direct Materials $ 150,
bagirrra123 [75]

Answer:

$450,000

Explanation:

Given that,

Direct Labor = $200,000;

Direct Materials = $150,000;

Manufacturing Overhead Costs = $250,000

Therefore, the total amount of conversion cost is the sum total of direct labor cost and manufacturing overhead cost.

Total amount of BG, Inc's conversion costs:

= Direct Labor cost + Manufacturing Overhead Costs

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8 0
3 years ago
In ______ feedback, the receiver provides nonevaluative information to the communicator.
umka21 [38]

In informational feedback, the receiver provides non-valuative information to the communicator.

Feedback in the context of communication refers to a reaction from the recipient that informs the communicator of the message's effectiveness and whether it needs to be amended.

Alternatively said, feedback is the message's reception by the recipient

Corrective feedback is when the receiver challenges the initial communication in response to informational feedback, which is when the receiver provides non-evaluative information to the communicator.

Reinforcing feedback occurs when the recipient expresses explicitly that she has understood the message and its goals.

Hence, in informational feedback, the receiver provides non-valuative information to the communicator.

Learn more about communication:

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