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Zina [86]
3 years ago
5

You would like to establish a trust fund that would pay annual payments to your heirs of $100,000 a year forever. You expect the

trust fund to earn an average return of 6.5 percent. How much do you need to deposit into this trust fund today to achieve your goal? Group of answer choices
Business
1 answer:
Andrej [43]3 years ago
5 0

Answer:

The amount to deposited = $1,538,461.54

Explanation:

<em>A fund that pays a fixed amount for forever is an example of a perpetuity. Hence, the amount to be deposited today is the present value of the perpetuity.</em>

This given below as follows:

PV = A ×   1/r

PV - present value of perpetuity

r- Interest rate = 6.5%. A- annual cash flow - 100,000

PV = 100,000 ×  1/0.065=  1,538,461.54  

The amount to deposited = $1,538,461.54  

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The Federal Reserve comes to the conclusion that more money must be pumped into the economy in an effort to stimulate economic g
wolverine [178]

The answer is: B) Buying securities (Bonds)

Money supply refers to the amount of money that circulated in the country. When government buy securities from the private sector, the money would be exchanged from the government's purse to the private sector's. If this occurs, the amount of money that circulated would be increased.

4 0
3 years ago
Read 2 more answers
A sales manager at Guilden Corporation, a manufacturer of consumer durable goods, instructed his new salesperson, Rita, to sell
Sidana [21]

Answer:

c. quotas

Explanation:

Quotas refer to minimum criteria to be fulfilled to meet the requirement.

Accordingly in the given instance Rita is given certain quotas to fulfill to meet the job. For this she has to sell at least 5 television sets, which shall be flat screen.

Also she must identify at least 10 potential customers who shall buy flat screen sets in near future.

These are basic conditions which are called quotas.

7 0
3 years ago
The owner of a bicycle repair shop forecasts revenues of $240,000 a year. Variable costs will be $70,000, and rental costs for t
Sergeu [11.5K]

Answer:

1. Adjusted Accounting Profits

- This method gives cashflow by adjusting revenue for expenses.

Earnings before tax

= Revenue - variable cost - rent cost - depreciation

= 240,000 - 70,000 - 50,000 - 30,000

= $90,000

Earnings After tax

= 90,000 ( 1 - tax rate)

= 90,000 ( 1 - 30%)

= $63,000

Add back depreciation as it is a non-cash expense

Operating cashflow = 63,000 + 30,000

= $93,000

2. Cash inflow/cash outflow analysis

Cash outflow is removed from inflow.

= Cash inflow - outflow

= 240,000 - variable cost - rent cost - tax

= 240,000 - 70,000 - 50,000 - 27,000

= $93,000

Tax = Earnings before tax * 30%

= 90,000 * 30%

= $27,000

3. The depreciation tax shield approach.

The tax shield that depreciation affords is added to the earnings after tax.

= Revenue - variable cost - rent cost

= 240,000 - 70,000 - 50,000

= $120,000

After tax = 120,000 * ( 1 - 30%)

= $84,000

Depreciation tax shield = depreciation * tax

= 30,000 * 30%

= $9,000

Cashflow = 84,000 + 9,000

= $93,000

4. Are the above answers equal?

Yes they are. All give an operating cash-flow of $93,000.

4 0
3 years ago
Ethical dilemmas usually have clear right or wrong answers.<br><br> True<br> False
borishaifa [10]

The correct answer should be false.

8 0
3 years ago
When we express the value of a cash flow or series of cash flows in terms of dollars today, we call it the ________ of the inves
vekshin1

Answer:

Present value

Future value

Explanation:

Present value is the value of cashflows discounted at interest rate at arrive at its value today.

Future value is the value of cashflows discounted at interest rate at arrive at its value at some given time in the future.

I hope my answer helps you

8 0
3 years ago
Read 2 more answers
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