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Jlenok [28]
3 years ago
9

Cameron is going to receive an annuity for 44 years of $27,833, and Kennedy is going to receive a perpetuity of that same amount

. If the appropriate discount rate is 6%, how much more are Kennedy's cash flows worth today than Cameron's cash flows? (Do not include the dollar sign ($). Enter rounded answer as directed, but do not use the rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).)
Business
1 answer:
Svet_ta [14]3 years ago
8 0

Answer: $36,173.622

Explanation:

Cameron:

Annual Payment  = $27,833

Time Period(n) = 44 years

Discount Rate(r) = 6%

Present\ Worth=Annual\ Payment\times[\frac{(1-(\frac{1}{1+r})^{n} }{r}]

Present\ Worth=27,833\times[\frac{(1-(\frac{1}{1.06})^{44} }{0.06}]

= 27,833\times\frac{1-0.078}{0.06}

=27,833\times15.367

= $427,709.711

Kennedy:

Annual Payment = $27,833

Discount Rate = 6%

Present Worth = \frac{27,833}{0.06}

Present Worth = $463,883.333

So, Present Worth of Kennedy is $36,173.622 more than that of Cameron.

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Assuming the marginal propensity to consume (MPC) for a nation is 0.67. The tax multiplier for this nation is: 2.03.

<h3>Tax multiplier</h3>

Using this formula

Tax multiplier=-MPC/1-MPC

Where:

Marginal propensity to consume (MPC)=0.67

Let plug in the formula

Tax multiplier=0.67/1-0.67

Tax multiplier=0.67/0.33

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Inconclusion the tax multiplier for this nation is: 2.03.

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How many days will it take for $1500 to earn $16 interest if it is deposited in a bank paying simple interest at the rate of 4%/
JulsSmile [24]

Answer:

97 days

Explanation:

In simple interest method, the interest is calculated by the following formula

I= P x R x T

I= interest

P = principal amount

R =interest rate

T= Time

In this case

I=$16

P=$1500$

R= 4% or 0.04%

T= time

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A company is formulating its marketing expense budget for the last quarter of the year. Sales in units for the third quarter amo
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a. $29,496

b. $21,996

Explanation:

a. The Computation of budgeted marketing expense for the fourth quarter is shown below:-

Sales units                                                            2,640

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Variable marketing expenses per unit sold $0.15

Total Variable marketing expenses                 $396

Fixed Marketing expenses                                    $18,000

Salaries ($6,000 × 3)

Depreciation ($2,500 × 3)                                      $7,500

Insurance ($1,200 × 3)                                            $3,600

Total Fixed marketing expenses                            $29,100

Budgeted marketing expense

for the fourth quarter                                           $29,496

b. Estimated cash payment for marketing expenses for the fourth quarter = Budgeted marketing expense for the fourth quarter - Depreciation

= $29,496 - $$7500

= $21,996

7 0
3 years ago
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