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Sloan [31]
3 years ago
14

Jeff has the opportunity to receive​ lump-sum payments either now or in the future. Which of the following opportunities is the​

best, given that the interest rate is ​4% per​ year?
a. one that pays $ 900 now
b. one that pays $ 1080 in two years
c. one that pays $ 1350 in five years
d. one that pays $ 1620 in ten years
Business
1 answer:
Brrunno [24]3 years ago
7 0

Answer:

c. one that pays $ 1350 in five years

Explanation:

we have to calculate the present value of each option:

  • option a, $900 (that is the present value)
  • option b, $1,080 in 2 years. PV = $1,080 / (1 + 4%)² = $998.52
  • option c, $1,350 in 5 years. PV = $1,350 / (1 + 4%)⁵ = $1,109.60
  • option d, $1,620 in 10 years. PV = $1,620 / (1 + 4%)¹⁰ = $1,094.41

Option c yields the highest present value = $1,109.60

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Terp Bank obtains a relatively large portion of its funds from conventional demand deposits as it creates many branches with many employees to attract demand deposits. Its interest expenses should be relatively low while its noninterest; expenses should be relatively high.

Option B

<u>Explanation:</u>

A withdrawal deposit is a banking or any other financial institution balance whereby the depositor may, without any notice or notification, remove the deposited funds from those in the account within seven days.

An example of demand deposits is checking accounts. We require the depositor to withdraw money at any moment. The volume of transactions a creditor is allowed on these transactions is infinite (even though each transaction might be paid by a bank).

For buyers, deposits of demand are essential because sometimes they house funds for daily expenses. Under no scenario, depositors could not purchase items on-demand without informing the bank first.

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3 years ago
Maxine wishes to purchase a pair of running shoes made by her favorite brand. Her budget is limited, and she notices shoes made
ANTONII [103]

Answer:

The correct answer is The price of the alternative was too high.

Explanation:

The market price is the price at which a good or service can be purchased in a free market. It is an economic concept of application both in historical aspects of the discipline and in its concrete use and in daily life.

The concept has given rise to both technical and theoretical discussions in the development of economic sciences. These discussions range from the definition of what a market is to what is understood by price, difficulties that acquire a particular importance in the microeconomics, an area in which one of the most important functions of an economist is the determination of prices that maximize profit of a company. However, the problem also extends to the macroeconomic sphere, in which price calculations play a central role in determining the hypothetical economic balance.

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3 years ago
Disk City, Inc. is a retailer for digital video disks. The projected net income for the current year is $2,300,000 based on a sa
Marat540 [252]

Answer:

big dog

Explanation:

5 0
3 years ago
Of the world's population of 7.5 billion people, _________ are scraping by on incomes that average less than $2 per day.
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1.1 billion? According to unicef 3 billion earn less than $2.50 so this seems like the appropriate answer.
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3 years ago
Kier Company issued $660,000 in bonds on January 1, Year 1. The bonds were issued at face value and carried a 5-year term to mat
yuradex [85]

Answer:

Interest Expense $39,600

Cash Flow from Operating Activities $39,600

Explanation:

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Interest on the Bond = $660,000 x 6% = $39,600

At the time of payment Journal Entry will be as follow

Dr. Interest Expense   $39,600

Cr. Cash                       $39,600

As the cash is paid against the operating activities.

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