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Paha777 [63]
3 years ago
12

Which of the following statements is CORRECT? a. The present value of a 3-year, $150 annuity due will exceed the present value o

f a 3-year, $150 ordinary annuity. b. If a loan has a nominal annual rate of 8%, then the effective rate can never be greater than 8%. c. If a loan or investment has annual payments, then the effective, periodic, and nominal rates of interest will all be different. d. An investment that has a nominal rate of 6% with semiannual payments will have an effective rate that is smaller than 6%.
Business
1 answer:
lorasvet [3.4K]3 years ago
5 0

Answer:

Statement a. is correct.

Explanation:

The effective annual rate is always higher than the nominal interest rate, as the formula is clear for any number of periods, for any interest rate:

Effective Annual Rate of return = (1 + \frac{i}{n})^n - 1

Further if we calculate the present value of annuity due and ordinary annuity assuming 6 % interest rate, then:

Present value of annuity due =

(1 + 0.06) \times 150 \times (\frac{1 - \frac{1}{(1 + 0.06)^3} }{0.06} )

= 1.06 \times $400.95

= $425.0089

Present value of ordinary annuity = 150 \times (\frac{1 - \frac{1}{(1 + 0.06)^3} }{0.06} )

= $150 \times 2.6730

= $400.95

Therefore, value of annuity due is more than value of ordinary annuity.

Statement a. is correct.

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Answer:

The correct answer is letter "D": bonuses are deferred salary rather than extra pay for extra sales performance.

Explanation:

In the corporate world, entitlement culture refers to the workers' beliefs that they deserve a series of privileges. This tends to happen during growth periods. Employees assume that the optimal situation of the firm has to do with their performances then, the organization owes them.

An idea that is commonly spread under such a scenario is that bonuses and commissions are deferred salaries and not extra payment for outstanding performance.

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B

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Theory X can be linked to the theory of supply and demand, which simply translates to individuals buying more of a particular good if their income rises. This theory led to the concept of "normal goods", this are simply the goods people buy more once their income increases.

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Rank the nine career characteristics in order of their importance to you, with the first being the most important. A 3-column ch
erastova [34]

Answer:

1. Work Environment.

2. Salary and Benefits.

3. Aptitudes and Abilities.

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5. Tasks and Responsibilities.

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Explanation:

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6 0
3 years ago
Oil Wells offers 6.5 percent coupon bonds with semiannual payments and a yield to maturity of 6.94 percent. The bonds mature in
kozerog [31]

Answer:

$ 975.93  

Explanation:

The market value of the bond can be computed using the pv formula in excel as follows:

=-pv(rate,nper,pmt,fv)

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nper is the number of semiannual coupon payments the bondholders would receive ,which is 7*2=14

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3 years ago
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