You are thinking about a project that is anticipated to bring in $138,066.75 annually.
<h3>How do you calculate the cash flow from an annuity?</h3>
The periodic cost of capital When the cost of capital is constant across all maturities, an AFs is the sum of the DFs for each cash flow in the annuity.
<h3>A stream of cash flows is what?</h3>
A sequence of equal-amount cash flows that occur at predictable, periodic times. When determining the comparable future value of a present amount of liquidity, the effect of time on value or the rate at which time affects value is taken into account a series of regular financial flows that never ends an infinite annuity.
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Answer:
a. 13.33%
b. 10%
c. 8%
d. 5.71%
Explanation:
The computation of nominal rate of return is given below:-
Rate of return = Dividend ÷ Current market price
For the first case
= $8 ÷ $60
= 13.33%
For the second case
= $8 ÷ $80
= 10%
For the third case
= $8 ÷ $100
= 8%
For the fourth case
= $8 ÷ $140
= 5.71%
Note :- To get $8 you need to multiply by $100 by the 8%
Answer:
The "diamond-water" paradox.
Explanation:
Adam Smith in his book <em>The wealth of nations</em> posted a question consisting the comparison between the price of diamond and water.
His idea was that why the price of diamond is so high as it has no importance in human life, and why the price of water is so low when it is highly significant for human life. One cannot die, if he doesn't have a diamond under his pillow although he will die if water is not given to him for days.
I think the answer would either be a or b. Most likely the answer would be a.
Answer:
D.
Explanation:
Conspicuous consumption is when a person pays an extremely high price for a product for its prestige value leading to a much higher demand than a simple price/demand relationship would justify.
Characteristics:
-Buying expensive items to display wealth and income rather than to cover the real needs of the consumer.
-Gain higher social status.
-Behavior not only limited to the rich/upper class but among the poorer social classes and emerging economies.
-Clear positioning.
-Time relation is the present.
-Able to take risks.
-Try new products.
-Love symbols of status.
-Wants status appreciation.
