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butalik [34]
3 years ago
6

Your grandparents would like to establish a trust fund that will pay you and your heirs $225,000 per year forever with the first

payment one year from today. If the trust fund earns an annual return of 4.4 percent, how much must your grandparents deposit today?
Business
1 answer:
xz_007 [3.2K]3 years ago
3 0

Answer:

They must deposit $5,113,636.36.

Explanation:

Giving the following information:

Cash flow= $225,000

Interest rate= 4.4 percent

To determine the amount to be deposited today, we need to use the perpetual annuity formula:

PV= Cf/i

Cf= cash flow

PV= 225,000/0.044

PV= $5,113,636.36

They must deposit $5,113,636.36.

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At the beginning of 2021, Terra Lumber Company purchased a timber tract from Boise Cantor for $3,510,000. After the timber is cl
V125BC [204]

Answer:

A. $279,000

B. $27,900

Explanation:

A. Calculation for 2021 depletion of the timber tract

2021 Depletion=[($3,510,000 - $720,000) / 6.2 million] *$620,000

2021 Depletion=0.45x 620,000

2021 Depletion= $279,000

Therefore 2021 depletion of the timber tract is $279,000

B. Calculation to determine the depreciation of the logging roads

Depreciation=($279,000 / 6.2 million)*$620,000 Depreciation= 0.073*$620,000

Depreciation= $27,900

Therefore the depreciation of the logging roads is $27,900

5 0
2 years ago
Jacoby Company received an offer from an exporter for 25,400 units of product at $18 per unit. The acceptance of the offer will
OlgaM077 [116]

Answer:

Differential income from the special order= $127,000

Explanation:

A company should accept a special order where the order generates additional contribution. i.e where the special order sales exceeds all relevant cost.

The relevant cost for decision to accept the special order are  

I Incremental Revenue from the special order  

2. incremental variable cost

Contribution per unit = 18-13=5

Total contribution from special order = contribution per unit × units

                                                      = 5× 25,400=$127,000

Differential income from the special order= $127,000

Note that whether or not the special order is accepted the fixed manufacturing and fixed operating expenses of would be incurred either way. Therefore , they are not relevant for the decision

6 0
3 years ago
Consider a hypothetical economy where there are no taxes and no international trade. households spend $0.80 of each additional d
KengaRu [80]
The formula for the multiplier is 1 / (1 - MPC), whereby MPC represents the marginal propensity to consume. Applying the formula to our case, we get: M (multiplier) = 1/(1-0.8) = 1/0.2 = 5. The multiplier in this economy is therefore 5.
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2 years ago
As a gardener, Joey earns $19.20 per hour. He earns double time for work on Saturdays. Last week, he worked 25 regular hours plu
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3 years ago
What types of government policies might help to improve the unemployment situation for these would be job seekers?
nikklg [1K]

Answer:

Following are the suggestions to solve unemployment problem:

(i) Change in industrial technique:

(ii) Policy regarding seasonal unemployment:

(iii) Change in education system:

(iv) Expansion of Employment exchanges:

(v) More assistance to self employed people:

(vi) Full and more productive employment

Explanation:

3 0
2 years ago
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