→Answer:
a. $188,533.82
b. $219,296.09
Explanation:
These problems can be solved using the present value of annuity formula which is:
PV= C x (1-(1+r)^-n)/r
Where:
PV = the present value of annuity (the amount we are solving for)
C= The annual amount receivable from the insurance company ($20,700)
r= The interest rate (7%)
n= Number of years (15 and 20 years respectively)
- To solve the first question (a) plug the variables into the formula and you will have → 20,700 × (1-(1.07)^-15)/.07= $188,533.82
- to solve the second question (b) plug the variables into the formula and you will have → 20,700×(1-(1.07)^-20)/.07 = $219,296.09
An independent consumer education website that has no motive to try to sell you something such as Consumer Reports.
Answer:
(b). <u>Increase</u> ;<u> Decrease</u>
Explanation:
When the price of a substitute good rises, then it becomes more profitable for suppliers to shift to the other good. Therefore the supply of given good decreases, and the supply curve shifts leftward.
For example, if you're a textile manufacturer who produces cotton and silk clothes if the price of silk rises you'll reduce cotton production to divert resources towards silk. Therefore the demand for cotton clothes reduces.
Due to the leftward shift of the supply curve, the equilibrium price increases and equilibrium quantity decreases.
So we can conclude that an increase in the price of a substitute good will cause the equilibrium price of its substitute to <u>increase</u> and the equilibrium quantity to <u>decrease.</u>
Hence, the option (b) is the correct option.
Answer:
d. $25,000
b. ($5,000) loss
Explanation:
In the first case, the gain or loss on this transaction is
Gain or loss on this transaction is
= Sale value of the land - adjusted basis of the land
= $110,000 - $85,000
= $25,000
We ignored the fair market value of the land for computing the gain or loss of the transaction
In the second case, the gain or loss on this transaction is
Gain or loss on this transaction is
= Sale value of the land - fair market value
= $80,000 - $85,000
= -$5,000 loss
Cynthia is a hospitality worker in the lodging industry who prefers to cater to small groups of people. She might want to open a bed and breakfast. If Cynthia enjoys working with others in the lodging industry, but on a smaller scale, a bed and breakfast is the perfect place for Cynthia to open that stays with her love for lodging but without the large hotel chain group of people. A bed a breakfast is usually a smaller place with roughly 10 rooms to rent out as if you were staying in a hotel.
