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
meriva
3 years ago
15

Suppose that an income producing property is expected to yield cash flows for the owner of $150,000 in each of the next five yea

rs, with cash flows being received at the end of each period. If the opportunity cost of investment is 8% annually and the property can be sold for $1,250,000 at the end of the fifth year, determine the value of the property today. A. $304,704.00
Business
1 answer:
vivado [14]3 years ago
7 0

Answer:

$1,449,635.50  

Explanation:

The computation of the value of the property today is shown below:

First the present value for 5 years is

Year Cash flows    Discount factor      Present value

1 $150,000  0.925925926 $138,888.89  

2 $150,000  0.85733882         $128,600.82  

3 $150,000  0.793832241         $119,074.84  

4 $150,000  0.735029853         $110,254.48  

5 $150,000  0.680583197          $102,087.48  

Total present value            $598,906.51  

The discount factor is

= 1 ÷ (1 + rate)^years  

And, the formula of future value is

Future value = Present value × (1 + rate)^number of years

$1,250,000 = Present value × (1 + 0.08)^5

$1,250,000 = Present value × 1.469328077

So, the present value is $850,729

Now the today value of the property is

= $598,906.51 + $850,729

= $1,449,635.50  

You might be interested in
Thirty-five members of the Ortiz extended family were spread across three states—Illinois, New York and Florida—and they rarely
Stells [14]
The answer will be 2,500 because u have to calculate which I did.
8 0
3 years ago
As utility companies tend to serve a whole market exclusively, they are known as ______ because the governments involved believe
kykrilka [37]

Natural monopoly  tends to serve a whole market exclusively.

<h2>What is Natural Monopoly?</h2>

A natural monopoly is a sort of monopoly that frequently arises as a result of the high start-up costs or considerable economies of scale of operating a business in a particular industry, which can result in significant barriers to entry for potential competitors. In a certain sector or region, a corporation with a natural monopoly might be the exclusive supplier of a given good or service. In industries that need specialized technology, raw materials, or other elements to function, natural monopolies may develop.

<h3>Key Features of Natural Monopoly</h3>
  • A natural monopoly is a special kind of monopoly that develops when there is only one company that can effectively provide the service in a particular area due to high start-up costs and considerable economies of scale.
  • A business with a natural monopoly may be the exclusive supplier of a good or service in a given sector or region.
  • Natural monopolies are permitted when one firm can provide a good or service for less money than any potential rival, but they are frequently very tightly controlled to safeguard consumers.

Learn more about Natural monopoly here:

brainly.com/question/2182872

#SPJ4

7 0
1 year ago
In May, Pasta Disasta, Inc. paid its suppliers $500 that it owed for the pizza pans purchased and received in April. Which accou
vladimir2022 [97]

Based on the information given the account that are affected is:

  • $500 decrease in liabilities
  • $500 decrease in assets.

<h3>Accounts that are affected</h3>

Assuming the company paid its suppliers the amount of  $500 that it owed for the pizza pans they purchased and received in the month of April. Hence, liabilities account will decrease by $500 while the assets account will decrease by $500.

Thus:

  • $500 decrease in liabilities
  • $500 decrease in assets

Inconclusion the account that are affected is:$500 decrease in liabilities, $500 decrease in assets.

Learn more about account affected here: brainly.com/question/14279491

8 0
2 years ago
Which of the following is an argument against increasing social responsibility?
Novosadov [1.4K]

Answer:

What are the answers?

Explanation:

There is no picture. Maybe remake this question with a picture with the answers shown.

4 0
3 years ago
I need a sentence with the word carbon offset in it
Digiron [165]
After having consumed electricity and producing carbon dioxide, I made up for it by buying Carbon Offsets.
3 0
3 years ago
Read 2 more answers
Other questions:
  • Is your boss​ right? A. ​Yes, you can tell by the way the income shares for each factor move in opposite directions over time. B
    10·1 answer
  • Egbert, age sixteen, purchases a $500 video-game system and a $50 computer chair from CompuStore. Egbert changes his mind and wa
    5·1 answer
  • A firm in monopolistic competition tends to have more control over price when it is Group of answer choices more successful at d
    5·1 answer
  • Which of the following, if true, would illustrate why price indexes such as the CSPI might overstate inflation in the cost of go
    6·1 answer
  • Which of the following tasks would most likely be the responsibility of middle management?
    9·1 answer
  • Mark is a resident sound designer in a new theater and needs to purchase equipment. What piece of sound equipment will help him
    15·2 answers
  • You work for a company that makes high-volume photocopiers for use in business settings. Your team is going to test the usabilit
    5·1 answer
  • 1. For financial accounting purposes, what is the total amount of product costs incurred to make 21,750 units
    5·1 answer
  • Line Corporation's balance sheet showed the following amounts for their liability and stockholders' equity accounts: Current Lia
    7·1 answer
  • Suppose a firm produces two products, X and Y. The firm earns revenues from X equal to $70,000 and revenues from Y equal to $60,
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!