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Reika [66]
3 years ago
9

3)You have won a contest and are allowed to choose between two prizes. One option is to receive$200 today and another $200 one y

ear from now. The second option is $100 today and anadditional $325 one year from now. At what interest rate (if any) is the present value of the twoprizes identical?3)A)0 percentB)5 percentC)25 percentD)10 percentE)none of the above
Business
1 answer:
vekshin13 years ago
8 0

Answer:

C)25 percent

Explanation:

Present value is the sum of discounted cash flows.

The interest rate where the present value of the two two prizes would be identical can be found using a financial calculator and trial and error method.

Option A :

Cash flow for year zero = $200

Cash flow for year one = $200

Present value when I is 0 = $400

Present value when I is 5 = $390.48

Present value when I is 10 = $381.82

Present value when I is 25 = $360

Option B

Cash flow in year 0 =$100

Cash flow in year 1 = $325

Present value when I is 0 = $425

Present value when I is 5 = $409.52

Present value when I is 25 = $360

Present value when I is 10 = $395.45

It can be seen that it's at 25% that both cash flows would be equal.

To find the PV using a financial calacutor:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. After inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

I hope my answer helps you

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Answer and Explanation:

Risk and return are equal companions if we invest in a market with a higher risk that's mean this type of market provides a higher return.

If Investors invest their whole money in the high-risk market for there high return, may they get a huge loss.

So, The exposure must be balanced by investments in diversified markets with different risk weights.

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Making payments on time is an important part of managing which of the following?
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Loan account i believe
hope this helps :)
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You make $10.25 per hour. You have 7.5% of your total pay taken out of your check for your 401K retirement plan. How much will b
Lera25 [3.4K]

The amount that will be taken off the pay check for the 401k retirements plan given all the criteria indicated above is $38.82 (Option D)

<h3>What is the computation justifying the above?</h3>

Given:

Pay Per Hour: $10.25

Bonus: $15.375‬ for every hour worked over forty hours.

Total Hour worked: 47 Hours

Percentage deductible: 7.5%

Total Pay thus =

(40 *10.25) + (7 *15.375)

= $517.625

Total 401 K deduction thus, =

7.5% * 517.625

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Learn more about 401k retirements plan:
brainly.com/question/2908111
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Full Question:

You make $10.25 per hour. You have 71/2% of your total pay taken out of your check for your 401K retirement plan. How much will be taken out for your 401K if you work 47 hours this week? You get paid time-and-a-half for all hours over 40.

Select one:

A. $36.13

B. $69.02

C. $54.20

D. $38.82

E. $14.35

3 0
2 years ago
When a company acquires a 20% - 50% interest in another company, this generally results in Group of answer choices a controlling
Softa [21]

Answer:

A significant level of influence.

Explanation:

Whenever the shares of nay company are being purchased by more than 50%, that gives the purchaser the controlling level of influence on that particular company.

Here in this question the level is between 20% - 50%, which is high and can be termed as significant but not any other term that is present in the options to the question.

Hope this helps you out buddy.

Good luck and Thank You.

6 0
3 years ago
A clearinghouse scam involves a victim receiving: a. a letter that claims he or she has inherited a significant amount of money.
Vitek1552 [10]

Answer:

c. a letter that falsely claims the writer represents a foreign bank.

Explanation:

A clearing house is a financial institution that should be created for exchanging the payments, securities, or transactions related to derivates. It stands between the two clearing firms. Its motive is to decrease the member risk that failed to honor the trade settlement liabilities

So the clearing house scam includes the victim that collect the letter in which there is false claims where the writer shows the foreign bank

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