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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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anyanavicka [17]
Hey there,

Your question states: <span>Andy has a remaining balance of $845 on his credit card. His credit card company has an APR of 18 percent. How much will Andy pay in interest for one month?

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5 0
3 years ago
Multinational corporations are also referred to as ______.
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7 0
3 years ago
A liquor warehouse expects to sell 10,000 bottles of scotch whiskey in a year. Each bottle costs $12, plus a fixed charge of $12
Maksim231197 [3]

Answer:

500 bottles should be ordered at a time.

20 orders should the warehouse place in a year to minimize inventory costs.

Explanation:

The number of bottles which minimizes the warehouse cost is known as the economic order quantity.

Economic Order quantity minimizes both the holding or carrying cost of inventory as well as the ordering cost.

<em>Economic Order quantity = √((2 × Annual demand × cost per order) / Holding cost per unit)</em>

                                          = √((2 × 10,000 × $125) / $10)

                                          = 500 bottles

<em>Number of Order = Total Demand / Economic Order Quantity</em>

                             =  10,000 / 500

                             =  20 orders

Conclusion :

500 bottles should be ordered at a time.

20 orders should the warehouse place in a year to minimize inventory costs.

4 0
3 years ago
Based on this model, households earn income when firms __________ purchase goods and services ___________in markets for factors
allochka39001 [22]

Answer and Explanation:

Market for Factors of Production:

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Market for Goods and Services:

Caroline spends $10 to get her car washed.

Antonio spends $150 to purchase a necklace from Classy's Jewelry Store.

Which of the elements of this scenario represent a flow from a household to a firm?

The $150 Antonio spends to purchase a necklace from Classy's Jewelry Store

The actual economy is more complicated than the one illustrated in the previous circular-flow diagram of a simple economy - false

The circular flow of income represents the flow of economic exchanges between economic agents in the economy. If a household provides the labor factor of production, it is paid and uses the same money to purchase from the same firms that produce goods and services. This is a cycle and actually doesn't get more complex than this in real life, only involves alot more firms or economic agents.

7 0
3 years ago
The spotlight on small business box "earning while learning" features students who
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5 0
4 years ago
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