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olga2289 [7]
3 years ago
6

You are considering investment that is going to pay $1,500 a month starting 20 years from today for 15 years. If you can earn 8

percent return on any investment, compounded monthly, how much at most are you willing to pay for this investment opportunity
Business
1 answer:
Margarita [4]3 years ago
5 0

Answer:

  • <u><em>$31,858.57</em></u>

Explanation:

1. First calculate the value of a constant annuity of $1,500 for 15 years at the 8% return.

The formula is:

            PV=C[\dfrac{1}{r}-\dfrac{1}{r(1+r)^t}]

Where:

  • PV is the present value of the annuity
  • C is the constant pay,emt: $1,500
  • r is the rate of return: 8%/12 = 0.08/12 =
  • t is the number of periods: 15 years × 12 moths/year = 180

Substitute and compute:

            PV=\$ 1,500[\dfrac{1}{(0.08/12)}-\dfrac{1}{(0.08/12)(1+0.08/12)^{180}}]

            PV=\$ 156,960.89

<u>2. Discount to the present year.</u>

You calculate the value of the annuity 20 years from now.

Then, you must discount that value at the same 8% rate to have the price today.

           Price=(Value\text{ }in\text{ }20\text{ }years)/(1+r)^t

Here, the value in 20 years is $156,960.89, r = 0.08/12, and t = 240 (20 × 12).

           Price=\$ 156,960.89/(1+0.08/12)^{240}=\$ 31,858.57

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Answer: Honesty , relationship building skill and social media savvy

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This above mention skills and requirements are important in considering a candidate for a public relationship and social media officer for Pizza Hut working under Chris Fuller.

4 0
3 years ago
The specific collection of values, norms, beliefs, and attitudes shared by people and groups in a company is commonly referred t
vlada-n [284]

Answer:

C. organizational culture

Explanation:

Organizational culture refers to the values, philosophy, and aspirations of an organization that guides the behavior of its members.  Culture is expressed through the members' internal interactions and communications with the outside world. Organizational culture is based on beliefs, shared attitudes, customs, written and unwritten rules in the company that has been developed over time.

Organizational culture manifests itself in diverse ways, including communication methods, internally distributed messages, leadership behaviors, and corporate celebrations. In other words, organizational culture is the way of doing things in an organization.

8 0
3 years ago
Purchasing Power Parity (PPP) theory states that A. the exchange rate between currencies of two countries should be equal to the
natulia [17]

Answer:

The correct answer is A and B

Explanation:

PPP stands for Purchasing Power Parity, which is a theory that states or define as the exchange rate among the currencies of 2 countries, which should be equal to the ratio of the price levels of the countries.

It is grounded on The Law of One Price, which states all the identical goods  have the same price.

As the purchasing power of the currency which sharply decrease because of hyperinflation, that currency will be depreciated against the stable currencies.

8 0
3 years ago
Carson Company purchased a depreciable asset for $280,000. The estimated salvage value is $14,000, and the estimated useful life
sergij07 [2.7K]

Answer:

The correct answer is B.

Explanation:

Giving the following information:

Carson Company purchased a depreciable asset for $280,000. The estimated salvage value is $14,000, and the estimated useful life is 10,000 hours. Carson used the asset for 1,500 hours in the current year. The activity method will be used for depreciation.

Annual depreciation= [(original cost - salvage value)/useful life of production in units]*units produced

Annual depreciation= [(280,000 - 14,000)/10,000]*1,500= $39,900

3 0
3 years ago
Kiddie World uses a periodic inventory system and the retail inventory method to estimate ending inventory and cost of goods sol
Levart [38]

Answer:

Ending inventory is $424,045

Cost of goods sold is $889,955

Explanation:

Retail Inventory method is used to estimate the value of inventory using retail price of the unit of inventory.

As per given data

                                                   Cost           Retail

Beginning inventory               $370,000   $515,000

Net purchases                        $890,000   $ 1,280,000

Freight-in                                $54,000

Net markups                                                $55,000

Net markdowns                                           $25,000

Net sales                                                      $1,235,000

Cost of Purchase = 890,000 + 54,000 = $944,000

Retail Price of Purchases = Net Purchases Retail + ( Net Markup ) = $1280,000 + ( 55,000 - 25,000 ) = 1,310,000

Cost to retail Percentage = ( $944,000 / $1,310,000 ) x 100 = 72.06%

Closing Inventory = Purchases + Net Markup - Sales = $1,280,000 + ( $944,000 / $1,310,000 ) - $1,235,000 = $75,000

                                      Retail           Cost

Beginning inventory  $515,000   $370,000

Net purchases           <u>$75,000</u>     <u> $54,045</u>  ( $75,000 x 72.06% )

Ending Inventory       <u>$590,000</u>   <u>$424,045</u>

Closing Inventory = Opening + Purchases - Closing = $370,000 + ( 890,000 + 54,000 ) - 424,045 = $889,955

7 0
3 years ago
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