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wariber [46]
3 years ago
12

Mary will receive $12,000 per year for the next 10 years as royalty for her work on a finance book. What is the present value of

her royalty income if the opportunity cost is 12 percent

Business
1 answer:
butalik [34]3 years ago
5 0

Answer:

$67,800

Explanation:

We can use annuity formula to find the present value of the royalties received for the upcoming ten years.

The annuity formula used here is attached with the answer.

The first step would be finding annuity factor at 12%.

So

Annuity Factor = (1-(1+r)^-n) / r

By putting values, we have:

Annuity Factor = (1 - (0.322)) / 0.12 = 5.65

Present Value = Annual Cash flow * Annuity Factor

PV = $12,000 * 5.65 = $67,800

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2 years ago
In a SWOT analysis, increasing gasoline prices would represent a potential __________ for manufacturers of electric cars.
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3 years ago
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nata0808 [166]
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6 0
2 years ago
Gugenheim, Inc., has a bond outstanding with a coupon rate of 7.7 percent and annual payments. The yield to maturity is 8.9 perc
Anna [14]

Answer:

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Explanation:

Giving the following information:

Face value= $2,000

Number of periods= 17

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3 years ago
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