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
VLD [36.1K]
3 years ago
10

You have successfully started and operated a company for the past 10 years. You have decided that it is time to sell your compan

y and spend time on the beaches of Hawaii. A potential buyer is interested in your company, but he does not have the necessary capital to pay you a lump sum. Instead, he has offered $800,000 today and annuity payments for the balance. The first payment will be for $250,000 in three months. The payments will increase at 1.6 percent per quarter and a total of 20 quarterly payments will be made. If you require an EAR of 11 percent, how much are you being offered for your company? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
Business
1 answer:
VikaD [51]3 years ago
5 0

Answer:

$5,225,417

Explanation:

first payment 800000

1 quarter         250000

2 quarters 254000

3 quarters 258064

4 quarters 262193

5 quarters 266388

6 quarters 270650

7 quarters 274981

8 quarters 279380

9 quarters 283851

10 quarters 288392

11 quarters 293006

12 quarters 297694

13 quarters 302458

14 quarters 307297

15 quarters 312214

16 quarters 317209

17 quarters 322284

18 quarters 327441

19 quarters 332680

20 quarters 338003

11% = (1 + i/4)⁴

i = 0.106

quarterly interest = 2.65%

Now we need to determine the present value of this  annuity and our discount rate is 2.65%. I will use an excel spreadsheet to determine the present value of the 20 quarterly payments and then add the initial payment.

$4,425,417 + $800,000 = $5,225,417

You might be interested in
Wang co. manufactures and sells a single product that sells for $420 per unit; variable costs are $231 per unit. annual fixed co
Anon25 [30]

The contribution margin per unit is 4809.52.

<h3>What is the contribution margin?</h3>

Contribution margin is the level of output at which revenue would equal zero.

Contribution margin = fixed cost / (price - variable cost)  

909,000 / (420 - 231)

909,000 / 189 = 4809.52

To learn more about contribution margin, please check: brainly.com/question/14902120

#SPJ1

4 0
2 years ago
Randy Rouser completes landscaping work on Nina Tothill’s yard, and Nina writes a $1,750 check from her account at Small Bank. T
Arte-miy333 [17]

Answer: Christina can hold Randy liable for the check

Explanation:

In this scenario it is important to note 2 things.

1. Nina PAID Randy.

2. Randy PAID Christina.

The point is that Randy is the one who had a contract with Nina. Even though Nina is the one who's check was not honored, Christina has NO CONTRACT with Nina. This means she cannot hold her liable.

As far as Christina is concerned, the check came from Randy and so she should hold him liable.

Randy on his part can then go back to Nina and hold her liable because he is the one who had a contract with her.

If you need any clarification do comment.

4 0
3 years ago
What are the consequences of not notifying your reference of their inclusion in your job
lawyer [7]

Answer:

they probably wouldn't take you as seriously

Explanation:

I mean if you have references they know for sure that you are good.

4 0
2 years ago
With the holiday season approaching, Denelle reviews holiday sales from the last five years to determine how much inventory to p
Westkost [7]

The information given shows that Denelle is conducting a trend analysis.

<h3>What is a trend analysis?</h3>

It should be noted that attend analysis simply means a technique that's used t predict future investment.

In this case, Denelle reviews holiday sales from the last five years to determine how much inventory to purchase and how many employees to schedule during peak sales times.

Learn more about trend analysis on:

brainly.com/question/25819900

#SPJ1

7 0
2 years ago
Blythe Corp. is a defendant in a lawsuit. Blythe's attorneys believe it is reasonably possible that the suit will require Blythe
8090 [49]

Answer:

The entry is not required because the outcome is reasonably possible, not certain or probable. So IAS 37 says that the liability must not be recognized as the outcome is not reasonably certain or probable.

Explanation:

The liability must be included in the financial statement only if the outcome is certain or probable. In this scenario, the outcome is reasonably possible but neither certain nor probable in this situation. So the entry in the financial statement is not required. If the liability is of a huge amount then IAS 37 says that their must be a disclosure in the financial statement notes about the lawsuit.

7 0
3 years ago
Read 2 more answers
Other questions:
  • Delta diamonds uses a periodic inventory system. the company had five one-carat diamonds available for sale this year: one was p
    15·1 answer
  • Refer to the figure above. if the economy is operating at full employment when its aggregate demand curve is ad2, then a further
    8·1 answer
  • On the first day of the fiscal year, a company issues a $5,000,000, 7%, five-year bond that pays semiannual interest of $175,000
    10·1 answer
  • During July, Laesch Company, which uses a perpetual inventory system, sold 1,430 units from its LIFO-based inventory, which had
    10·1 answer
  • Suppose the real interest rate is 4% and expected inflation is 1% . What is the nominal interest rate? nominal interest rate: %
    10·1 answer
  • Loree manages the service desk and makes routine decisions related to customer refunds and merchandise returns. Loree also overs
    5·1 answer
  • When representing the seller, which duties does a real estate licensee owe to an unrepresented buyer? Honest dealing and disclos
    7·1 answer
  • Assume that you manage a risky portfolio with an expected rate of return of 16% and a standard deviation of 45%. The T-bill rate
    6·1 answer
  • Your friend Marco loves being on his phone and interacting on social media. He knows that you are studying different careers and
    12·1 answer
  • What happens to a monopolistically competitive firm that begins to charge an excessive price for its product?.
    10·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!