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
White raven [17]
3 years ago
6

Domebo Corporation has entered into a 7 year lease for a piece of equipment. The annual payment under the lease will be $3,000,

with payments being made at the beginning of each year. If the discount rate is 12%, the present value of the lease payments is closest to (Ignore income taxes:__________. a) $21,000 b) $8692 c) $13,692 d) $18,049 e) $15.333
Business
1 answer:
Leviafan [203]3 years ago
5 0

Answer:

The correct answer is:

$18,049 (d)

Explanation:

First, let us lay out the information given clearly:

Period of lease = 7 years

annual payments = $3,000

discount rate = 12% = 12/100 = 0.12

Note the the present value of lease payments is the same thing as total value of the lease payment, before any payments have been made.

Next, without the interest, the total value of the lease payment is calculated as:

Total amount to be paid = annual payments × period of lease (time)

= 3,000 × 7 = $21,000

Next, we are told that there is a discount rate of 12%, this will reduce the total amount to be paid by 12%, and this is calculated as:

discount on lease payment = 12% of total amount  

= 0.12 × 21,000 = $2,520

Finally the new amount to be paid is calculated by subtracting the discount from the total value, and this is calculated thus:

present value of lease payments = Total payments - discount

= 21,000 - 2,520 = $18,480 ( closest to $18,049)

You might be interested in
What is the purpose of cost allocation? why is it so important to allocate cost properly in a business?
RoseWind [281]
My answer was C try that
3 0
3 years ago
Ang Electronics, Inc., has developed a new DVDR. If the DVDR is successful, the present value of the payoff (when the product is
omeli [17]

Answer:

The NPV of going directly to market and the NPV of test marketing before going to market is $22.5 million and  $24.97 million respectively

Explanation:

The computation of the NPV of going directly to market is shown below:

=  Present value of the payoff i.e market × success percentage + Present value of the payoff × failure percentage

= $33.5 million × 50% + $11.5 million × 50%

= $16.75 million + $5.75  billion

= $22.5 million

And, The computation of the NPV of going directly to market is shown below:

=  (Present value of the payoff i.e market × success percentage + Present value of the payoff × failure percentage) ÷ ( 1 + discount rate) - spending amount

= ($33.5 million × 80% + $11.5 million × 20%) ÷ ( 1 + 0.11) - $1.25 million

= ($26.80 million + $2.30  million) ÷ (1.11) -  $1.25 million

= ($29.10 million) ÷ (1.11) -  $1.25 million

= $24.97 million

4 0
3 years ago
Geneva Company manufactures dolls that are sold to various distributors. The company produces at full capacity for six months ea
schepotkina [342]
I think the answer is c because u make 500 thousand a year
4 0
3 years ago
Necesito saber si es cierto o falso
Zanzabum

La respuesta correcta es Falso

Explicación:

El excedente de producción se refiere a la cantidad de dinero que obtiene un productor al producir y vender un producto. En este contexto, el excedente de producción puede ser calculado si al precio o valor de compra se resta el costo de oportunidad de producirlo (costo por producir un bien específico en vez de sus alternativas), así como otros costos de producción. De acuerdo a lo anterior la premisa es falsa porque el costo de oportunidad debe ser restado y no sumado al precio para saber cual fue la ganancia o excedente de producción.

6 0
3 years ago
Explain id there is excess supply or demand of goods at the equilibrium price and why? In sentences
enot [183]

Answer by YourHope:


Hi! :)


Question: Explain if there is excess supply or demand of goods at the equilibrium price and why?


Answer: Equilibrium is at the point where supply and demand meet and the prices are set. Since the price is set as a equilibrium, there won't be an excess to either, but if you set the price above equilibrium, you move away from equilibrium and have disequilibrium create excess supply or excess demand!


Have a BEAUTIFUL day~

8 0
3 years ago
Other questions:
  • _________________ means that each individual involved in incident operations will be assigned to only one supervisor.
    7·1 answer
  • Casey earns $150 a week and consumes only fish and shrimp. The price of fish is $3 a pound and the price of shrimp is $5 a pound
    15·1 answer
  • Trade agreements can cause jobs to go to countries that provide those jobs
    13·1 answer
  • Sandhill Company purchases an oil tanker depot on January 1, 2020, at a cost of $639,700. Sandhill expects to operate the depot
    13·1 answer
  • A branding strategy in which a firm markets some products under its own name and other products under the name of a reseller bec
    9·1 answer
  • FAW Group is an automobile manufacturer known for producing efficient, durable, and low-priced cars. Recently, the company launc
    5·1 answer
  • Crane Company required production for June is 112000 units. To make one unit of finished product, three pounds of direct materia
    8·1 answer
  • suppose the transfers of pillars to the lantern would reduce sales to outside customers by 15000. whats the lowest transfer pric
    7·1 answer
  • Westside Manufacturing Co.'s budget at 6,000 units of production includes $36,000 for direct labor and $3,000 for electric power
    15·1 answer
  • Rodney (a fictional person) was self-employed, running a successful business, seemingly healthy, and never thought he would have
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!