1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
Serjik [45]
3 years ago
12

Your grandfather wants to establish a scholarship in his father’s name at a local university and has stipulated that you will ad

minister it. As you’ve committed to fund a $10,000 scholarship every year beginning one year from tomorrow, you’ll want to set aside the money for the scholarship immediately. At tomorrow’s meeting with your grandfather and the bank’s representative, you will need to deposit____________ (rounded to the nearest whole dollar) so that you can fund the scholarship forever—assuming that the account will earn 6.00% per annum every year.
a. $111,111
b. $88,889
c. $100,000
d. $133,333

The bank representative just reported that he misquoted the available interest rate on the scholarship’s account. Your account should earn 4.75%. The amount of your required deposit should be revised to______ .

a. $60,715
b. $53,572
c. $71,429
d. $67,858

This suggests there is________ relationship between the interest rate earned on the account and the present value of the perpetuity.

a. A direct
b. An inverse
Business
1 answer:
Paul [167]3 years ago
3 0

Answer:

the answer for the first question is $166667.

the answer for the second question is $210526

the answer for the third question is An inverse.

Explanation:

given information that i will invest in a $10000 scholarship that will pay forever.

the interest rate charged is 6.00% per annum therefore this is a perpetuity present value problem where there is streams of income forever therefore we use the formula :

Pv of perpetuity= Cf/r

where Cr is the cash flows payed by the single investment forever in this case $10000 then r is the interest rate of the investment amount which is 6% in this case.

Pv of Perpetuity= $10000/6%

                           =$166667 therefore i must invest this amount to get the scholarship running with streams of $10000 forever.

in the second problem if now the interest rate is changed from 6% to 4.75% then the amount to be invested would be :

Pv of perpetuity = $10000/4.75%

                              =$210526 therefore this is the amount to be invested for a forever $10000 stream of incomes for a scholarship.

the relationship is indirect cause as the interest rate decreases the present value of the perpetuity that must be invested increases.

You might be interested in
Specialization in a particular small job allows workers to focus on the parts of the production process where they have a(n) ___
11111nata11111 [884]

Specialization in a particular small job allows workers to focus on the parts of the production process where they have an <u>advantage</u>.

<h3>What does specialization entail?</h3>

When workers specialize in a small job, they would be focusing on the parts of production where they have an advantage thanks to their skill or experience.

For instance, when a worker specializes in welding parts of a vehicle because they are good at it, they are specializing.

Find out more on specialization at brainly.com/question/24448534

#SPJ1

4 0
2 years ago
A​ lump-sum purchase or basket purchase involves paying a single price for several assets as a group.
il63 [147K]

Answer:

TRUE

Explanation:

A basket purchase is the acquisition of a number of assets as a group, in a single purchase transaction. This is common when the basket purchase is lower than the price charged for individual assets.

7 0
3 years ago
Suppose the government passes a law eliminating holidays and, as a result the production of goods and services increases because
dedylja [7]

Answer:

The correct answer is GDP would definitely increase because GDP excludes leisure.

Explanation:

The GDP does not measure the level of development of a country, nor does it measure the quality or level of its educational system or its health. Come on, that the quality of life in general is not measurable by GDP, although it is true that countries with a higher GDP per capita can afford better health or education services, as well as better infrastructure and services in general.

It does not measure the state of the environment or the damage caused to it or natural resources by the economic activity carried out. In other words, GDP does not report externalities, that is, it does not reflect the total social benefits and costs derived from economic activity.

GDP does not measure the quality of the goods and services produced. The GDP figures are only numbers that do not take into account exactly what is being produced or what is the quality of what is produced. This prevents, for example, comparing production between different eras. Does a computer add up to GDP now than in the 80s? The answer is no. Does a country of services add up to an oil exporter? The answer is also no.

It ignores the value of elements that contribute to maintaining the level of well-being of the population, such as leisure or freedom. In freer countries or in which its inhabitants have more leisure time and better options in which to invest it, well-being is much greater.

6 0
2 years ago
Branford has one share of stock and one bond. The total value of the two securities is $1,200. The bond has a YTM of 10.2%, a co
riadik2000 [5.3K]

Answer:

The price of the stock is expected to be $188.16 in 1 year.

Explanation:

This can be determined as follows:

Current price of the stock = Expected next dividend / Expected return = $24.87 / 15.2% = $163.62

Expected stock price in 1 year = Current price of the stock * (100% + Expected return)^Number of year = $163.62 * (100% + 15.2%)^1 = $188.16

Therefore, the price of the stock is expected to be $188.16 in 1 year.

8 0
3 years ago
McKinney Corporation had beginning retained earnings of $2,242,000 and ending retained earnings of $2,499,000. During the year t
miv72 [106K]

Answer:

Net income for the year = $257,000

Explanation:

Retained earnings for the year= Net income - dividends paid.

Since no dividends were paid, retained earnings for the year = net income for the year. At the end of each accounting period, retained earnings are reported on the balance sheet, and the retained profits for the year are added to the beginning balance of retained earnings, to give a cumulative ending balance of  $2,499,000.

therefore retained earnings for the year = ending retained earnings balance  - beginning retained earnings balance = $2,499,000.-$2,242,000= $257,000.

Net income for the year is  thus =  $257,000 since no dividends were paid.

6 0
3 years ago
Other questions:
  • Assume a U.S.-based MNC is borrowing Romanian leu (ROL) at an interest rate of 8% for one year. Also assume that the spot rate o
    13·1 answer
  • If Sheridan Company issues 7500 shares of $10 par value common stock for $375000, the account Paid-in Capital in Excess of Par V
    13·1 answer
  • When Jiffy-Pop packaged its popcorn in an aluminum skillet, complete with attachable handle, it designed the package to become t
    10·1 answer
  • What service does the acfe provide to allow individuals to anonymously report allegations of ethical violations, fraud, waste, a
    13·1 answer
  • Mike Samson is a college football coach making a base salary of $646,800 a year ($53,900 per month). Employers are required to w
    12·1 answer
  • Blossom Company incurs these expenditures in purchasing a truck: cash price $26,470, accident insurance (during use) $2,080, sal
    12·1 answer
  • Sunland Company reports the following operating results for the month of August: sales $382,500 (units 5,100), variable costs $2
    12·1 answer
  • A report that details prevention, appraisal, internal failure, and external failure costs is called a ________.
    13·1 answer
  • Trina sells dolls and accessories, and doesn't have much time to update her Search campaigns with her ever-changing inventory. H
    11·1 answer
  • emily purchased a building to store inventory for her business. the purchase price was $760,000. emily also paid legal fees of $
    15·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!