1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
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.

You might be interested in
In 2014, General Mills acquired Annie's Home-grown, an organic food company, to meet a growing demand by consumers to have acces
Sedbober [7]

Answer:

A. Generating, refining, and evaluating potential marketing actions.

Explanation:

Marketing research are the processes that are used to connect consumers and manufacturers to marketers. Infornation is used to generate, refine, and evaluate potential marketing actions. It is used to evaluate marketing mix and how changes affects the consumer's behaviour.

General Mills used marketing research to identify ways to grow the brand, promote it, and evaluated plans to market it. Due to increased demand for organic and natural foods.

This is use of generating, refining, and evaluating potential marketing actions.

8 0
3 years ago
Which of the following statements is true of the behavior of total variable​ costs, within the relevant​ range? A. They will inc
grandymaker [24]

Answer:

They will decrease as production decreases

Explanation:

Total Variable cost is sum of all the cost incurred in production of total units of goods produced. It is directly proportional to the number of units of goods produced. It helps to analyze cost structure of goods and then decide on pricing strategy of the goods. Some of the examples of variable cost can be packaging cost, raw material’s cost.

Mathematically it can be defined as  

Total variable cost = Total units of goods produced *  variable cost for one unit of good produced  

Hence from the given option  They will decrease as production decreases as the number of units of goods produced will decrease and hence lesser raw material and packaging will be required to produce the goods.

7 0
3 years ago
The objective of financial reporting is to provide useful financial information to capital providers.
Amiraneli [1.4K]

i think it is B

Explanation:

6 0
3 years ago
Compared to a command and control government approach to reducing​ pollution, a​ market-based system of tradable pollution allow
Alex17521 [72]

a. more efficient because polluters that can only reduce pollution at high cost do not and instead buy allowances.

6 0
3 years ago
What are the uses of shares in raising capital for an entreprise
Alja [10]

Firms can raise the financial capital they need to pay for such projects in four main ways: (1) from early-stage investors; (2) by reinvesting profits; (3) by borrowing through banks or bonds; and (4) by selling stock. When owners of a business choose sources of financial capital, they also choose how to pay for them.

ummmm I ain't sure if this is the answer you need please read properly before you write

8 0
3 years ago
Other questions:
  • Lako Systems studied the performance of 15 line workers who attended a training program and compared their performance with a co
    15·1 answer
  • A parking lot charges $2 per hour for the first 4 hours, then $3 per hour after that. Which equation(s) describes the total cost
    5·1 answer
  • Bethlehem Steel Corp. provides steel for a variety of uses to its various customers. Customers have different needs for the stee
    13·1 answer
  • The subject has $8,000 pool and a $2,000 chimney but no porch. a comparable that sold for $199,000 has a $3,000 porch but no poo
    6·1 answer
  • During the industrial revolution, high population growth in great britain, combined with intensive use of raw materials from the
    6·1 answer
  • Kingbird Inc. owns equipment that cost $672,000 and has accumulated depreciation of $174,000. The expected future net cash flows
    5·1 answer
  • If 30,000 after-tax dollars are invested at 7% in a single-premium tax-deffered annuity, how many after-tax dollars will be accu
    6·1 answer
  • Gina Production Company uses a standard costing system. The following information pertains to the current year: ​
    11·1 answer
  • "mary and bob are trying to decide how much auto insurance to buy". they share the same expectations of an accident, with the sa
    8·1 answer
  • What are tresholds in auditing?​
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!