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Ivenika [448]
3 years ago
14

An annuity that goes on indefinitely is called a perpetuity. The payments of a perpetuity constitute a/an series. The equation i

s: A stock with no maturity is an example of a perpetuity. Quantitative Problem: You own a security that provides an annual dividend of $115 forever. The security’s annual return is 5%. What is the present value of this security? Round your answer to the nearest cent. $
Business
1 answer:
stepladder [879]3 years ago
6 0

Answer:

The present value of security is $2300

Explanation:

The value or price of the perpetuity today is calculated by dividing the constant cash flow it provides per period by the interest rate or the rate of return (r). Thus the price of this perpetuity according to the formula will be,

Value of perpetuity = Cash flow / r

Value of perpetuity = 115 / 0.05

Value of perpetuity = $2300

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7 0
4 years ago
Read 2 more answers
The dollars available from each unit of sales to cover fixe
lbvjy [14]

Answer:

False

Explanation:

Variable costs are part of direct expenses incurred in the production of goods meant for sales. Variable costs have a direct and proportionate relationship with the output level. An increase in output level increases variable costs. Examples of variable costs are packaging and raw materials.

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5 0
4 years ago
A payday loan company charges 6.00 percent interest for a two-week period. What is the annual interest rate? (Do not round inter
Mashcka [7]

Answer:

The annual interest rate is 156  percent

Explanation:

If   6.00 percent interest for a two-week period then annual interest rate =

rate for a two-week period * (52 weeks/ 2 weeks)  = 0,06 * 26 = 1,56

1,56 * 100 =  156  percent for a year period

<u>Note</u>: One year have 52 weeks

8 0
3 years ago
Which of the following is not a characteristic of intangible assets?(a)They lack physical existence.(b)They are not financial in
AysviL [449]

Answer: Option C

Explanation:

A. Assets with physical existence are called tangible assets.

B. There are several financial instruments that lacks physical substance but are not considered as intangible assets.

C. Intangible assets can be either long term or short term.

D. Only those intangible assets that have definite lives are amortized, others with indefinite life are not.

4 0
4 years ago
During fiscal 2016, Plastics and Synthetic Resins Company recorded cash of $87,800 from customers for accounts receivable collec
mr Goodwill [35]

Answer:

Correct option is B

Explanation:

When cash is received from accounts receivables, it only impacts on balance sheet that too, only on cash assets and non cash assets.

Cash will be increased and non cash asset accounts receivables will be decreased, everything else will remain constant.

Thus correct option is B

Where Cash Assets = + $87,800

Non Cash Assets = - $87,800

4 0
4 years ago
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