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
barxatty [35]
3 years ago
15

A lottery claims its grand prize is ​$15 ​million, payable over 5 years at ​$3000000 per year. If the first payment is made​ imm

ediately, what is the grand prize really​ worth? Use an interest rate of 8​%.
Business
1 answer:
xz_007 [3.2K]3 years ago
3 0

Answer:

$ 11, 978,133.75

Explanation:

The grand prize of 15,000,000 is worth the present value of the prize at an 8% interest. The prize is paid every year, meaning its an annuity case.

The present value of an annuity is calculated using the formula

PV = P × <u> 1 − (1+r)−n </u>

  r

Where

P $3,000,000

r is 8% 0r 0.08

n is 5

PV = $3,000,000 x <u>1-(1+0.08) - 5</u>

    0.08

PV =$3,000,000 x<u> 1 - 0. 6805831</u>

    0.08

PV = $ 3,000, 000  x 3.99271

PV = 11, 978,133.75

You might be interested in
The fiscal 2016 financial statements for Walgreens Boots Alliance, Inc., report net sales of $117,351 million, net operating pro
sertanlavr [38]

Answer:

D. 2.97

Explanation:

The net operating asset turnover ratio is used to measure the efficiency of operating assets and to determine how well these assets are used to generate sales. The assets that are tested here are operating assets that are those assets which are required to run the day-to-day operations of the business. For instance, Property, plant, and equipment, inventory, and cash etc. Investments and unutilized assets do not fall under this category.

Here are are required to calculate the net operating asset turnover ratio, which is calculated as follows:

        Net operating asset turnover = Net sales / Net operating assets

⇒ Net operating asset turnover for 2016 = 117,351 m / 39,502 m = 2.97.

It means that for each dollar invested in the operating assets generates $2.97 of revenue.  

3 0
3 years ago
Read 2 more answers
On December 31, 2021, Interlink Communications issued 5% stated rate bonds with a face amount of $113 million. The bonds mature
Kazeer [188]

Answer:

Bond Price = $97.4457408 million rounded off to $97.45 million

Explanation:

To calculate the price of the bond today, we will use the formula for the price of the bond. We assume that the interest rate provided is stated in annual terms. As the bond is an annual bond, the coupon payment, number of periods and annual YTM will be,

Coupon Payment (C) = 113 million * 0.05 = 5.65 million

Total periods (n) = 30

r or YTM = 0.06 or 6%

The formula to calculate the price of the bonds today is attached.

Bond Price =5.65 * [( 1 - (1+0.06)^-30) / 0.06]  +  113 / (1+0.06)^30

Bond Price = $97.4457408 million rounded off to $97.45 million

4 0
2 years ago
Tentacle Television Antenna Company provided the following manufacturing costs for the month of June. Direct labor cost Direct m
Temka [501]

Answer:

C. $65,800

Explanation:

Fixed csot: those which do not change for a relevant range with the production output. They aer constant.

Factory insurance                  21,000        

Factory insurance                  13,000

Factory manager's salary     10,800

Janitor's salary                        5,000

Property taxes:                 <u>      16,000  </u>

    Total Fixed Cost:             65,800

The direct materials and direct labor are variable cost as they drop to zero if no unit is produced.

Same goes with packaging cost, if no unit is produced then, no packagin is needed.

6 0
3 years ago
To determine the production level, the monopolist sets marginal cost equal to price.
Vlad1618 [11]
Your answer is false.
6 0
3 years ago
Now that you have studied monopolistic competition, let's see how well you can distinguish a firm in a monopolistically competit
vlabodo [156]

Answer:

<u>Monopolistic Competition:</u>

4. a firm that faces a downward sloping demand curve.

<u>Perfect Competition:</u>

1. a firm that produces with excess capacity in

3. a firm that may earn in an economy profit or loss in the short run

5. a firm that that maximizes profits profit in the long by producing where MR = MC

<u>Both:</u>

2. a firm that has a firm that sets price greater than marginal cost.

Explanation:

7 0
3 years ago
Other questions:
  • A television commercial for a new car carefully analyzes the car's features and price, relative to other available models. The a
    14·1 answer
  • A manager engaged in the management function of ____ is determining organizational goals and the means for achieving them.a. pla
    8·1 answer
  • Information collected from online databases is an example of ________ data. A) observationalB) experimentalC) primaryD) secondar
    7·1 answer
  • Dehner Corporation uses a job-order costing system with a single plantwide predetermined overhead rate based on direct labor-hou
    9·1 answer
  • Ashley bought a desktop computer and a laptop computer. Before finance charges, the laptop cost $350 more than the desktop. She
    13·1 answer
  • An asset is acquired by signing a note payable. The note does not indicate an interest rate, and the fair value of the asset can
    8·1 answer
  • The CFO of the company believes that an appropriate annual interest rate on this investment is 4%. What is the present value of
    5·1 answer
  • Think through the SWOT analysis and think about your personal product offering. Focus on the specific value you would bring to t
    9·1 answer
  • what is the present value of $7500 per year, at a discounted rate of 7.1%, of the first payment is received 6 years from now and
    14·1 answer
  • https://dojopdf.s3-external-1.amazonaws.com/648188929767d193da308cab1b01c024/pdf_api/2019_parent_invitation-5fd2577f548e493f3e59
    12·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!