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Crank
3 years ago
10

Richard is collecting estimates for a house that he will have the funding to build in 12 months. Which of the following factors

does Richard need to consider in regard to the quality of these estimates?A. Padding estimates
B. Planning horizon
C. Project structure
D. People
E. Project duration
Business
1 answer:
cestrela7 [59]3 years ago
3 0

Answer:

B. Planning Horizon

Explanation:

Planning horizon is the period estimated for a project to be completed. It is the time covered or taken by a particular plan or project in a planning cycle. It is the given period for the amount of work that can reasonably be scheduled on the basis of degree of project and resource availability. For Richard, in trying to determine quality of estimates involving time and funding, planning horizon needs to be considered.

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Answer:

What is the present value of the payments if they are in the form of an ordinary annuity?

Discount all cash flows

12,000/1.09=11,009

12,000/1.09^2=10,100

12,000/1.09^3=9,266

12,000/1.09^4=8,501

12,000/1.09^5=7,799

Add all these discounted cash flows= $46,675 is the present value of ordinary annuity

a-2. What is the present value of the payments if the payments are an annuity due?

In an annuity due payment is made at the beginning of the year so we subtract one from each compounding period so,

12,000/1.09^0=12,000

12,000/1.09=11,009

12,000/1.09^2=10,100

12,000/1.09^3=9,266

12,000/1.09^4=8,501

add all these discounted cash flows = $50,876= PV of annuity due

FV of ordinary annuity

PV= 0

PMT=12,000

I= 9

N= 5

FV=? Put these in financial calculator= $71,816

Fv of annuity due=

12,000+

PV=0

PMT=12,000

I=9

N=4

FV=?=66,877

Pv  of annuity due is higher and FV or ordinary annuity is higher.

Explanation:

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Answer:

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Answer:

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