All categories

3 years ago

The present value of an ordinary annuity is:

Business

1 answer:

Colt1911 [192]3 years ago

3 0

Answer:

B) The amount that would be paid today in order to receive a series of equal payments in the future

Explanation:

Present value of a cashflow by itself is its dollar value today. An Ordinary annuity is a series of recurring equal cashflows ; they occur at the end of each period like at the end of the year, end of the month, end of each quarter etc. This is unlike an Annuity due whose recurring payments occur at the beginning of each period like beginning of the year, beginning of the month, beginning of each quarter etc.

You might be interested in

On july 1 of the current calendar year, plum co. paid $7,500 cash for management services to be performed over a two-year period

morpeh [17]

Dec 31 Management Services ....................................$1875

To Prepaid Expenses.....................................................$1875

(Being prepaid expenses recognised for the year)

6 0

3 years ago

Read 2 more answers

Explain why electronic file organization is a key skill for todays workplace

QveST [7]

It allows workers to transfer, update, or share files within seconds.

7 0

3 years ago

Which of the following statements is true? a. The production budget is not converted into dollars. b. The sales budget includes

Svetllana [295]

Answer:

e. All of these choices are correct.

Explanation:

Note:

Statement a. about production budget is correct as the production budget only estimates number of units to be produced, in quantity and not in dollars and therefore is not converted into dollars.

Statement b. about sales budget is also correct as it shows the quantity in units and also in value.

Statement c. about overhead budget is also correct as the budget segregates variable and fixed overheads properly.

Statement d. about labor budget is correct, as in this budget an average rate is used for calculating the expenses.

Therefore all of the above is correct.

8 0

3 years ago

A U.S. business sells milk to consumers in France. Which situation would most likely cause demand for milk to rise in France?

lys-0071 [83]

A situation that would most likely cause demand for milk to rise in France is French consumers expect the price of milk to increase in the future.

<h3>What causes an increase in the demand for a product?</h3>

The demand for a product is affected by:

future expectations
change in the price of other goods
Change in the income of consumers

When it is expected that the price of a product would increase in the future. Consumers would want to buy the product now when it is cheaper so as to save money.

For more information about the change in demand, please check: brainly.com/question/25871620

6 0

2 years ago

You are planning your retirement in 10 years. You currently have $169,000 in a bond account and $609,000 in a stock account. You

Over [174]

Answer:

$187,584.20

Explanation:

Firstly, we need to calculate the total future value (FV) of the bond account and stock account after 10 year from now (when you come to retirement age):

FV_bond at retirement = 169,000 x (1 + 7.25%)^10 + 7,100 x (1 + 7.25%)^9 + 7,100 x (1 + 7.25%)^8 + … 7,100 x (1 + 7.25%)^0 = 426,230.93

FV_stock at retirement = 609,000 x (1 + 10.75%)^10 = 1,690,653.63

Total FV of your investment portfolio = 2,116,884.57

Because you plan to use up all the funds in your account after 21 equal amount withdrawals after retirement, total present value <em>(at the time you retire not now)</em> of these withdrawals <em>(discounted at 6.5%)</em> have to be equal to the value of your invesment 10 years from now, or:

2,116,884.57 = C/(1+6.5%) + C/(1+6.5%)^2 + … + C/(1+6.5%)^21, with C is the amount you plan to withdraw each year.

Solve the equation we get C = 187,584.20

<em>Note: The equation can be solved easily using Excel or BAII Plus.</em><em> </em>

5 0

3 years ago