Answer:
Instructions are listed below.
Explanation:
Giving the following information:
A friend of Mr. Richards recently won a law suit for $30 million. They can either take the payments over 10 years or settle today for cash of $25 million. Mr. Richard is optimistic that he can earn a 6% return on the money and that they should settle for $25 million today and he will invest it for them.
First, we need to find the present value of the 30 million.
To do that we need to calculate the final value.
FV= {A*[(1+i)^n-1]}/i
A= annual deposit
FV= {3,000,000*[(1.06^10)-1]}/0.06= 39,542,385
PV= FV/(1+i)^n= 39,542,385/1.06^10= 22,080,261
B) Now we know that the present value of option B is higher. One dollar today is better than one dollar tomorrow. It is better to receive the money now to invest it.
Answer:
D) $40,000
Explanation:
The Joneses qualify for a Section 121 exemption since they lived at their house for 20 years. They are exempted from paying capital gains taxes on the first $500,000 ($250,000 if single) in realized gains from selling their home.
Joneses taxable gain = $750,000 (sales price) - $210,000 (basis) - $500,000 (section 121) = $40,000
They will have to recognize only $40,000 in gains.
I'm going to guess, but i would say the best answer would be B. They could file for Chapter 7 bankruptcy and discharge most of their debt.
Answer:
Explanation:
The primary market is the market in which the new securities like bonds, stocks, etc are offered to the general public for the first time or we can say Initial public offer.
The initial public offer is an example of the primary market
.
On the other hand, the secondary market is that market in which the securities are purchased or sold through the investors after offering to the general public.
Example - New York Stock Exchange (NYSE), etc.
