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
mote1985 [20]
3 years ago
15

Which one of the following statements related to annuities and perpetuities is correct? Multiple Choice An ordinary annuity is w

orth more than an annuity due given equal annual cash flows for 10 years at 7 percent interest, compounded annually. A perpetuity comprised of $100 monthly payments is worth more than an annuity of $100 monthly payments provided the discount rates are equal. Most loans are a form of a perpetuity. The present value of a perpetuity cannot be computed but the future value can. Perpetuities are finite but annuities are not.
Business
1 answer:
Tatiana [17]3 years ago
6 0

Answer:

A perpetuity comprised of $100 monthly payments is worth more than an annuity of $100 monthly payments provided the discount rates are equal.

Explanation:

There is the basic difference of time duration in the payments. Under perpetuity the payments are for an unlimited period, and under annuity the period is defined.

As the payments are indefinite in perpetuity the amount will be higher in comparison to a limited period payments under annuity, also provided the interest rate is same for both.

Thus, the chosen statement is correct.

You might be interested in
financial calculator Bruno's Lunch Counter is expanding and expects operating cash flows of $23,900 a year for 5 years as a resu
Ann [662]

Answer:

NPV = 138,347.55

Explanation:

<em>Net Present Value (NPV) : This is one of the techniques available to evaluate the feasibility of an investment project. The NPV of a project is the difference between the present value of the cash inflows and the cash outflows of the project.</em>

We sahall compute theNPV of this project by discounting the appropriate cash flows as follows:

<em>Prevent Value of  operating cash flow</em>

PV =A× (1- (1+r)^(-n))/r

A- 23,900, r - 12%, n- 5

PV = $23,900 × (1- (1.12)^(-5))/0.05

=206,769.963

<em>PV of Working Capital recouped</em>

PV = 5600× 1.12^(-5)

    = 3,177.59

NPV = initial cost + working capital + Present Value of working capital recouped + PV of operating cash inflow

NPV = (66,000) + (5600) + 3,177.59 + 206,769.96

NPV = 138,347.55

5 0
3 years ago
2.what are some of the reasons people don’t manage their money well for the future?
Flura [38]
1) They are young and not so smart o( just a saying), 2) They think they will be rich forever and forever be on top of the world, 3) Ignorance or following the wrong financial advice, 4) Instead of them wisely taking care of their finances, they put it in other people's hands, who of course abuse it as well or take advantage. :)
5 0
3 years ago
Meade Nuptial Bakery makes very elaborate wedding cakes to order. The company has an activity-based costing system with three ac
poizon [28]

Answer:

$86.87

Explanation:

Calculation for what would be the overall margin on the order

Price of cake $500.54

Less Costs:Size related ($183.06)

($1.13 per guest × 162 guests)

Less Complexity-related ($130.56)

($43.52 per tier × 3 tiers)

Less Order-related ($61.44)

($61.44 per order × 1 order)

Less Cost of purchased decorations for cake ($38.61)

Customer margin $86.87

Therefore would be the overall margin on the order is $86.87

3 0
3 years ago
Concept check 1. 54/32 converted to a mixed number is ________. 22/32 1.6875 1/38 1 22/32 2. The product of one and four thirty-
Ipatiy [6.2K]

Questions

Concept check

1. 54/32 converted to a mixed number is ________.a) 22/32 b)1.6875 c) 1/38 d)1 22/32

2. The product of one and four thirty-seconds and twenty thirty-seconds is ________. a)1 24/32 b)45/64 c)56/32 d)720

3. One and eight thirty-seconds divided by twelve thirty-seconds is ________. a)480/1024 20/1024 3 1/3 3 40/32

4. A u.S. Treasury bond is trading at 98 and 6/32. Convert this price to its decimal form. a)98.19 b)96.63 c)9/86 d)98.06

5. What is the percentage increase if the s&p 500 index is currently trading at 1,100 and rises 55 points? a)4.5% b)5% c)55% d)5.5%

Answer:

1.d)1 22/32

2. b)45/64

3. c)3 1/3

4. a)98.19

5. b)5%

Explanation:

1. 54/32 converted to a mixed number is ________.a) 22/32 b)1.6875 c) 1/38 d)1 22/32

Mixed number is another way of writing improper fraction

54/32= 1 (54 - 32)/32

= 1 22/32

Therefore, option d) 1 22/32 is the correct option

2. The product of one and four thirty-seconds and twenty thirty-seconds is ________. a)1 24/32 b)45/64 c)56/32

d)720

One and four thirty-seconds = 1 4/32

Twenty thirty-seconds = 20/32

= 1 4/32 × 20/32

= 36/32 × 20/32

= 9/8 × 5/8

= 45/64

Therefore, option b)45/64 is the correct option

3. One and eight thirty-seconds divided by twelve thirty-seconds is ________. a)480/1024 b)20/1024 c)3 1/3 d)3 40/32

One and eight thirty-seconds = 1 8/32

Twelve thirty-seconds = 12/32

= 1 8/32 ÷ 12/32

= 40/32 ÷ 12/32

= 40/32 × 32/12

= 40/12

= 3 4/12

= 3 1/3

Therefore, option c) 3 1/3 is the correct option

4. A u.S. Treasury bond is trading at 98 and 6/32. Convert this price to its decimal form. a)98.19 b)96.63 c)9/86 d)98.06

98 and 6/32 = 98 + 6/32

We convert 6/32 to decimal

= 98 + 0.1875

= 98.1875

≈ 98.19

Therefore, Option a is the correct option

5. What is the percentage increase if the s&p 500 index is currently trading at 1,100 and rises 55 points? a)4.5% b)5% c)55% d)5.5%

Percentage increase = Increase/ Orginal amount × 100

Increase = 55 points

Original amount = 1,100

Percentage Increase = 55/1100 × 100

= 0.05 × 100

= 5%

Therefore, option b)5% is the correct option

8 0
2 years ago
Dave is a handsome and famous celebrity. he has been dating gabriela, a beautiful and popular actress, for the past two months,
Leto [7]
According to the investment model there should be a degree of satisfaction in the relationship to have stability. But Dave doesn't have that commitment which means he is not satisfied with his relationship. This led him to be attracted with other women he worked with. He felt that these women showed interest to him and he thought of this can be the opportunity to find someone else. This is his alternative to find satisfaction that he is looking for.
4 0
3 years ago
Other questions:
  • At January 1, 2016, Sheffield Corp. has beginning inventory of 3000 surfboards. Sheffield estimates it will sell 11000 units dur
    12·1 answer
  • Tiffany purchased a $10,000, 13-week Treasury bill that is paying 2.25%. What is the effective rate on this T-bill?
    7·1 answer
  • Assume the probability of a pessimistic, most likely and optimistic state of nature is .25, .45 and .30, and the returns associa
    14·1 answer
  • Which of the following would be included in a properly prepared comprehensive annual financial report (CAFR), but not in the min
    6·1 answer
  • Western Wear Clothing issues 2,700 shares of its $0.01 par value common stock to provide funds for further expansion. Assuming t
    9·1 answer
  • Dry cleaning companies often charge more for women's blouses than men's shirts. They claim that this is because women's blouses
    10·1 answer
  • Creating a favorable impression and building trust with prospective customers is a critical part of the __________ step of perso
    15·1 answer
  • Harley signs a check payable to Pro Accountants, P.C., and gives it to Pro, leaving the amount blank but authorizing the firm to
    7·1 answer
  • Federal Semiconductors issued 12% bonds, dated January 1, with a face amount of $100 million on January 1, 2018. The 20-year bon
    8·1 answer
  • The plaintiff and the defendant entered into a three-year contract in which the defendant would be the sole supplier of steel pa
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!