Answer:
4.76%
Explanation:
The requirement in this question is determining the discount rate which gives the same present value in both cases since discount rates discount future cash flows to present value terms.
PV of a pertuity=annual cash flow/discount rate
PV of a pertuity=$17,000/r
PV of ordinary annuity=annual cash flow*(1-(1+r)^-n/r
PV of ordinary annuity=$30,000*(1-(1+r)^-18/r
$17,000/r=$30,000*(1-(1+r)^-18/r
multiply boths side by r
17000=30,000*(1-(1+r)^-18
divide both sides by 30000
17000/30000=1-(1+r)^-18
0.566666667=1-(1+r)^-18
by rearraging the equation we have the below
(1+r)^-18=1-0.566666667
(1+r)^-18=0.433333333
divide indices on both sides by -18
1+r=(0.433333333)^(1/-18)
1+r=1.047554315
r=1.047554315-1
r=4.76%
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Answer:
Sell the put option. The put option is better and advantageous .
Explanation:
The call option is trading far below the strike price and poses risk. The price may not go up to $1.25 and hence not advisable. The put option is better as we stand to make a profit margin ($1.15 / Euro) if it sells the put at he strike price immediately. Given that the difference is high, it is unlikely that the price will move against us and we shall exercise the option as soon as the margin starts reducing.
An informal type of organizational structure is one best suited for achieving a cost-leadership strategy especially when the managers is promoting innovation.
<h3>What is a
cost leadership strategy?</h3>
This is a cost strategy that relies on a firm's ability in using a lower costs of production to offer quality products at low prices.
These type of strategy is best achieved with an informal type of organizational structure & culture.
Read more about cost leadership strategy
<em>brainly.com/question/26891629</em>
Answer:
Disability
Explanation:
Disability insurance offers protection against the loss of income due to disability or sickness. This insurance policy provides income to the insured if they are unable to work as a result of a disability or serious illness. Disability insurance coverage is available from private insurance companies and government-backed programs.
