Answer:
a.
PV = $25000
b.
PV one year from today = $27000
Explanation:
a.
A perpetuity is a series of cash flows that are constant in nature, occur after equal interval of time and are for an infinite period of time. A growing perpetuity is a perpetuity that grows at a proportionate rate for an infinite period of time. The formula to calculate the present value of a growing perpetuity is,
PV = CF1 / r - g
Where,
- CF1 is the cash flow in the coming period or period 1
- r is the required rate of return or interest rate
- g is the growth rate of perpetuity
PV = 1000 / (0.12 - 0.08)
PV = $25000
b.
After the first payment is made, the value of the growing perpetuity can be calculated using CF2. The value that will come will be the value of perpetuity 1 year from today.
PV one year from today = CF2 / (r - g)
PV one year from today = 1000 * (1+0.08) / (0.12 - 0.08)
PV one year from today = $27000
Answer:
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The statement which does not accurately describe the lower of cost or net realizable value valuation method for inventory is:
- <u>C. The journal entry to write down inventory does not affect pretax income</u>
Inventory has to do with the accurate listings of the goods which a business has in stock for purposes of selling. This is important because it helps to prevent theft and also to properly calculate profit and loss.
As a result of this, we can see that the lower of cost method for making inventory is a type of inventory which states that a business must have records of goods which cost lower than their current market pricing and this is used when there is a reduction in market prices
Therefore, the correct answer is option C because the journal entry does not show the pretax earnings.
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Sales promotion mix element stimulates purchase directly through an incentive to buy, such as a coupon or rebate.
<h3>
How does sales promotion work?</h3>
- Sales promotion is one of the components of the promotional mix.
- Sales promotion is a marketing strategy where a company would utilize brief-term campaigns to generate interest and demand for a product, service, or other offerings.
- Advertising, personal selling, direct marketing, and publicity/public relations make up the bulk of the promotional mix.
- Types of Sales Promotion - 4 Important Types: Consumer Sales Promotion, Dealer Promotion, Business Promotion, and Public Relations
To learn more about promotion, refer to the following link:
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Answer:
The answer is C.
Explanation:
Complementary goods are goods that are consumed together as a pair. They are mostly not consumed alone. If you buy one, you must buy the other. Example, bread and butter.
The answer to the question is C. a decrease in the price of one will increase the demand for the other.
For example, bread and butter are complements. If there is an increase in price of butter, other things remaining equal, there will be a decrease in the quantity demanded of bread. And since the demand of bread has reduced, the demand for its complement, butter too will decrease and vice-versa