The question is missing the requirement. The complete question is,
A famous quarterback just signed a $15 million contract providing $3 million a year for 5 years. A less famous receiver signed a $14 million 5-year contract providing $4 million now and $2 million a year for 5 years. Who is better paid? The interest rate is 10%.
Answer:
The less famous receiver is better paid.
Explanation:
To calculate who is better paid, we need to calculate the present value of the amount the famous quarterback and less famous receiver will receive.
The present value is the sum of future cash flows discounted back to today's terms using the discount rate or interest rate.
<u>PV of $15m for famous quarterback:</u>
The famous quarter back will receive the 15 million in equal payments for five years. We consider the payments are received at the end of period. We calculate the 5 year discount factor for such annuity at 10%.
- Discount factor = (1 - (1 + 10%)^-5) / 10% = 3.79079
- The discount factor is calculated using the simple formula for Present value of ordinary annuity
- The PV = $3 million * 3.79079 = $11.37237 million
<u>PV of $14 million for less famous receiver:</u>
The less famous receiver is receiving $4 million today which are worth exactly the same that is $4 million. Apart from that, the remaining payments of $10 million is received in ordinary annuity of $2 million a year. We calculate the PV of $4 million today and $2 million annuity for five years to calculate the value of $14 million today
- The annuity discount factor is same as the interest rate and time period is same.
- The PV = $4 million + $2 million * 3.79079 = $11.58158 million
Answer:
Correct option is D.
<u>End of the month after the quarter.</u>
Explanation:
FUTA taxes must be paid quarterly by the last day of the month following the end of the calendar quarter.
- April 30th
- July 31st
- October 31st
- January 31st
Answer:
$73,600
Explanation:
Cash flow from Operating Activity
Cash sales $26,000
Collections on accounts receivable $99,000
Payments to suppliers ($47,000)
Cash generated from operations $78,000
Income taxes paid ($4,400)
Net cash provided by operating activities $73,600
therefore,
the amount of net cash provided by operating activities indicated by these transactions is $73,600
<span>The demand for wheat would increase by 0.2 percent. Income elasticity indicates how much demand for something increases or decreases when income goes up or down. It is the calculated as the ratio of the percentage change in quantity demanded to the percentage change in income.</span>
