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3 years ago

15

Your friend is looking for investors in a risky business venture. To convince you to participate, she is offering you a 17% rate

of return in your investment. How much should you be willing to invest your friend s company, if she believes that she will be able to pay you the following amounts: $1000 at the end of the first year, $4000 at the end of the second year, and $5000 at the end of years 3, 4, and 5.

2 answers:

telo118 [61]3 years ago

4 0

Answer:

B - $13,556.82

Explanation:

Amount to be invested is equal to the present value of future inflows

Present value = future value/(1+Interest rate)^Number of years

The actual amount at the end of the first year should be $3000 if there is an answer in the options

The amount at the end of the second year is $4000

The amount at the end of the third, fourth and fifth year is $5000

Hence, amount to be invested = 3000/(1.17) + 4000/(1.17)^2 + 5000/(1.17)^3 + 5000/(1.17)^4 + 5000/(1.17)^5

= $13,556.82

Hence, the answer is $13,556.82

lozanna [386]3 years ago

4 0

Answer:

The answer is $11,847

Explanation:

Amount to be invested is equal to the present value of future inflows

Present value = future value/(1+Interest rate)^Number of years

Hence, amount to be invested = 1000/(1.17) + 4000/(1.17)^2 + 5000/(1.17)^3 + 5000/(1.17)^4 + 5000/(1.17)^5

= $11,847.

Hence, the answer is $11,847..

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Hope receives an $18,500 scholarship from State University. The university specifies books, supplies, and equipment, while $10,0

irga5000 [103]

Answer:

Hope's gross income = $5000 + $10,000 = $15,000

Explanation:

First, we need to highlight what are qualified education expenses especially for tax-free fellowships and scholarships.

Specifically, the qualified expenses that will be tax exempt will be

The tuition and fees which are requirements to go to an eligible school or institution

Other course related expenses required for courses in such institutions such as books equipment and supplies are also tax exempt.

<u>However, room and board, research travel and other expenses that are not required for courses in the institution are not tax free</u>

Based on this analysis:

Hope's initial earning on campus = $5000

However, $10,000 spent on room and board are not required for enrolment in the school, hence, it will be added to the earnings to make the gross income

Hope's gross income = $5000 + $10,000 = $15,000

5 0

3 years ago

On the basis of this information, which of the following statements is CORRECT? a. Prestopino's cash on the balance sheet at the

mylen [45]

Answer:

b. Prestopino had negative net income in the current year

Explanation:

Retained earnings at the end of previous year were $700,000, but retained earnings at the end of current year had declined to $320,000.

• The company does not pay dividends.

• The company's depreciation expense is its only non-cash expense; it has no amortization charges.

• The company has no non-cash revenues.

• The company's net cash flow (NCF) for current year was $150,000.

On the basis of this information, which of the following statements is CORRECT? Prestopino had negative net income in the current year

Prestopino DECPRECIATION expense in the current year was less than $150,000 and Prestopino had postive net income in the currnet year however, this income was less than it was in the previous year income.

Prestopino NCF in the current year must be higher than its NCF in the previous year and it cash on the balance at the end of the year must be lower than the cash it had on the balance sheet at the end of previous year

8 0

3 years ago

On August 1, 1958, first-class postage for a 1-ounce envelope was 4 cents. On August 1, 2007, a first-class stamp for the same e

Andrej [43]

Answer:

4.86%

Explanation:

Given that,

First-class postage for a 1-ounce envelope = 4 cents

On August 1, 2007

A first-class stamp for the same envelope cost = 41 cents

Period, n = 49 years

$F=P(1+i)^{n}$

$41=P(1+i)^{49}$

$\frac{41}{4}=(1+i)^{49}$

$10.25\ cents=(1+i)^{49}$

$1.0486=(1+i)$

i = 1.0486 - 1

= 0.0486 or 4.86%

Therefore, the interest rate is 4.86%.

3 0

3 years ago

You have been pricing an MP3 player in several stores. Three stores have the identical price of $500. Each store charges 24 perc

Alja [10]

Answer:

Store A = $9

Store B = $8

Store C = $10

Explanation:

Finance charges calculated by average daily balance finance charges basis, adjusted balance method finance charges basis and Previous Balance Method Finance Charge basis is calculated as follows

Store A:

Average Daily Balance Finance Charge basis = ($500 + $400) /2

Average Daily Balance Finance Charge basis = $450

Finance Charges = $450 x (24% / 12)

Finance Charges = $9

Store B:

Adjusted Balance Method Finance Charge basis = $500 - $100

Adjusted Balance Method Finance Charge basis = $400

Finance Charges = $400 x (24% / 12)

Finance Charges = $8

Store C:

Previous Balance Method Finance Charge basis = $500 - $0

Previous Balance Method Finance Charge basis = $800

Finance Charges = $500 x (24% / 12)

Finance Charges = $10

3 0

3 years ago

Suppose that consumer spending initially rises by $5 billion for every 1 percent rise in household wealth and that investment sp

enyata [817]

Answer:

left by 30 billons

then right by 40 billons

Explanation:

the aggregate demand curve will move to the left as the consumption of the economy will fall as the household are less wealthy than before.

Then, as the interest rate fall the aggregate demand curve will move to the right as the investing increase as now more projects are profitable.

<em>Calculations:</em>

<em />

5 billon for every point of wealth:

6 points x 5 billon = 30 billons

20 billion of inventing per 1% of interest rate decrease

2 points x 20 billions = 40 billons

7 0

3 years ago