A determination of whether consideration exists depends on a comparison of the values of the things exchanged.

Elle's Elephant Shop sells giant stuffed elephants for $55 each. Elle incurs $10 of variable costs for each elephant and a total

Gennadij [26K]

Answer:

875 45x55-700 =875.....

8 0

4 years ago

Congratulation! You just won $10 million in the lottery. But instead of squandering your newfound wealth on luxury goods and a l

Fudgin [204]

Answer:

Distinguish among different types of financial institutions.

Explanation:

7 0

3 years ago

A company is considering buying a new piece of machinery. A 10% interest rate will be used in the computations. Two models of th

JulsSmile [24]

Answer:

Machine I

capitalized cost: 230,271.28

EAC: $ 27,047.58

Machine II

EAC: $ 27,377.930

As Machine I cost per year is lower it is better to purchase that one.

Annual deposits to purchase Machine I in 20 years: $ 1,396.770

return of machine I with savings of 28,000 per year: 10.51%

Explanation:

WE calculate the present worth of each machine and then calculate the equivalent annual cost:

MACHINE 1

Operating cost:

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 18,000

time 20

rate 0.1

$18000 \times \frac{1-(1+0.1)^{-20} }{0.1} = PV\\$

PV $153,244.1470

Salvage value:

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity $20,000.0000

time 20.00

rate 0.1

$\frac{20000}{(1 + 0.1)^{20} } = PV$

PV 2,972.87

Total: -80,000 cost - 153,244.15 annual cost + 2,972.87 salvage value:

Total: 230,271.28

$PV \div \frac{1-(1+r)^{-time} }{rate} = C\\$

Present worth $(230,271.28)

time 20

rate 0.1

$-230271.28 \div \frac{1-(1+0.1)^{-20} }{0.1} = C\\$

C -$ 27,047.578

Fund to purchase in 20 years:

$FV \div \frac{(1+r)^{time} -1}{rate} = C\\$

FV $80,000.00

time 20

rate 0.1

$80000 \div \frac{(1+0.1)^{20} -1}{0.1} = C\\$

C $ 1,396.770

IF produce a 28,000 savings:

we must solve using a financial calcualtor for the rate at which the capitalized cost equals 28,000

$PV \div \frac{1-(1+r)^{-time} }{rate} = C\\$

PV $230,271.28

time 20

rate 0.105126197

$230271.28 \div \frac{1-(1+0.105126197287798)^{-20} }{0.105126197287798} = C\\$

C $ 28,000.000

rate of 0.105126197 = 10.51%

<u>Machine II</u>

100,000 cost

25,000 useful life

15,000 operating cost during 10 years

20,000 for the next 15 years

Present value of the operating cost:

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 15,000

time 10

rate 0.1

$15000 \times \frac{1-(1+0.1)^{-10} }{0.1} = PV\\$

PV $92,168.5066

$C \times \frac{1-(1+r)^{-time} }{rate} = PV\\$

C 20,000

time 15

rate 0.1

$20000 \times \frac{1-(1+0.1)^{-15} }{0.1} = PV\\$

PV $152,121.5901

in the timeline this is at the end of the 10th year we must discount as lump sum for the other ten years:

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity $152,121.5901

time 10.00

rate 0.1

$\frac{152121.590126167}{(1 + 0.1)^{10} } = PV$

PV 58,649.46

salvage value

$\frac{Maturity}{(1 + rate)^{time} } = PV$

Maturity $25,000.0000

time 25.00

rate 0.1

$\frac{25000}{(1 + 0.1)^{25} } = PV$

PV 2,307.40

Total cost: 100,000 + 92,168.51 + 58,649.46 - 2,307.40 = $248,510.57

$PV \div \frac{1-(1+r)^{-time} }{rate} = C\\$

PV $248,510.57

time 25

rate 0.1

$248510.57 \div \frac{1-(1+0.1)^{-25} }{0.1} = C\\$

C $ 27,377.930

4 0

4 years ago

This morning you purchased a stock that just paid an annual dividend of $2.20 per share. You require a return of 9.3 percent and

Irina18 [472]

Answer:

The capital gain is $3.30

Explanation:

Capital gain = Ending price - Initial price

Initial price = [$2.20(1 + .031)]/(.093 − .031) = $36.58

Ending price = [$2.20(1 + (.031*4))]/(.093 − .031) = $39.88

Capital gains = $39.88 − 36.58 = $3.30

4 0

4 years ago

Describe a real or made up but realistic example of a time when you might apply for a loan.

kicyunya [14]

Well people apply for loans when they need money for a certain goal. Like in the movie fantastic beasts and where to find them in the first part they are at a bank. The guy in their tries to get a loan so he can start a company as an entrepreneur. He wants to be able to own his own bakery so he could make cookies cakes and several other designs. Another reason people get loans is when their business is failing. Like the macys owner in the Florida Oviedo town mall took a few loans to help start up the company and pay to own the store their. But it recently closed. Those are two examples of when people took a loan to either start or continue a buisness when money was short.

3 0

3 years ago