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mixer [17]
3 years ago
7

You are comparing three investments, all of which pay $100 a month and have an interest rate of 8 percent. One is ordinary annui

ty, one is an annuity due, and the third investment is a perpetuity. Which one of the following statements is correct given these three investment options?A) To be the perpetuity, the payments must occur on the first day of each monthly periodB) The ordinary annuity would be more valuable than the annuity due if both had a life of 10 yearsC) The present value of the perpetuity has to be higher than the present value of either the ordinary annuity or the annuity dueD) The future value of all three investments must be equalE) The present value of all three investments must be equal
Business
1 answer:
Ivan3 years ago
6 0

Answer:

c. The present value of the perpetuity has to be higher than the present value of either the ordinary annuity or the annuity due

Explanation:

Considering the following statements:

  • the ordinary perpetuity, the payments must occur on the first day of each monthly period. Hence this statement is incorrect.
  • The ordinary annuity would be more valuable than the annuity due if both had a life of 10 years. Incorrect.
  • In case of perpetuity the times is not limited, hence would get the higher return.
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2 years ago
Pepper Company is using the annual rate of return to evaluate a potential investment. The original investment required is $120,0
Naily [24]

Answer:

B : $70,000

Explanation:

The formula and the computation of the  annual rate of return is shown below:

= Annual net income ÷ average investment

where,  

Annual net income is XXXXX

And, the average investment would be

= (Original investment required + salvage value) ÷ 2

= (120,000 + $20,000) ÷ 2

= $140,000 ÷ 2

= $70,000

By placing these values we can easily compute the annual rate of return

3 0
3 years ago
Suppose the country of Lilliput exported $205 billion worth of goods and imported $449 billion worth of goods in the last calend
mart [117]

Lilliput's net exports are ($244 billion).  Therefore, Lilliput is running a trade deficit of $244 billion.

A trade surplus implies that Lilliput's exports are greater in value than its imports. A situation of <em>"neither a trade deficit nor a trade surplus"</em> exists when the exports are equal in value to the country's imports.

Data and Calculations:

Lilliput's exports = $205 billion

Lilliput's imports = $449 billion

Net exports for Lilliput = ($244 billion)

Thus, Lilliput is running a trade deficit of $244 billion because its imports <em>are worth more than its </em><em>exports.</em>

Learn more: brainly.com/question/25520478

4 0
2 years ago
If redbox is successful at attracting customers to a location, then mcdonald's could possibly realize
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5 0
3 years ago
Wilson Enterprises applies overhead based on direct labor cost. The company estimates that their overhead for the year will be $
Tcecarenko [31]

Answer:

Applied Overhead is higher than actual overhead. Hence, manufacturing overhead is $ 4,000

Explanation:

Given data:

estimated overhead = $2,40,000

Labor cost =$2,80,000

Direct labor cost = $3,00,000

Overhead\  rate = \frac{Estimated\  Overhead}{Estimated\ direct\ labor\ cost}

                        = \frac{2,40,000}{3,00,000}      

                         = $ 0.80 per direct labor cost      

Applied\ Overhead = Actual\  Labor\ cost\times Overhead\ rate      

                             = $ 2,80,000\times $ 0.80 Per direct labor cost  

                             =$ 2,24,000        

Actual Overhead cost = $ 2,20,000        

Applied Overhead is more than actual overhead. Hence, manufacturing overhead is $ 4,000.

6 0
3 years ago
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