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
arsen [322]
3 years ago
6

Clarissa wants to fund a growing perpetuity that will pay $6000 per year to a local museum, starting next year. She wants the an

nual amount paid to the museum to grow by 6% per year. Given that the interest rate is 10%, how much does she need to fund this perpetuity?
Business
1 answer:
likoan [24]3 years ago
4 0

Answer:

She needs $150,000 to fund this perpetuity.

Explanation:

In this question we need to find the present value of this perpetuity. Because this is a growing perpetuity we will need to use the formula of present value of a growing perpetuity.

PV of growing perpetuity = Payment/ R-G

The payment is the current payment the perpetuity will pay which is 6,000, R is the interest rate which is 10% and G is the growth rate of the perpetuity which is 6%. Now we will input these values in the formula in order to find the present value of the perpetuity.

6,000/0.1-0.06

=6,000/0.04

=150,000

You might be interested in
Wants to start a fashion boutique that will sell tailor-made garments and accessories. She plans to open boutique stores in life
Akimi4 [234]

Answer:

commercial bank people will help her in that regard

5 0
3 years ago
Preston Industries has two separate divisions. Each division is in a separate line of business. Division A is the largest divisi
prohojiy [21]

Answer:

The correct answer is D. Assign appropriate, but differing, discount rates to each project and then select the projects with the highest net present values.

Explanation:

The discount rate is the cost of capital that is applied to determine the current value of a future payment.

The discount rate is used to "discount" future money. It is widely used when evaluating investment projects. It tells us how much money is worth now from a future date.

The discount rate is the inverse of the interest rate, which serves to increase the value (or add interest) in the present money. The discount rate, on the other hand, detracts from the future money when it is transferred to the present, except if the discount rate is negative, in case it will mean that the future money is worth more than the current one. The interest rate is used to obtain the increase to an original amount, while the discount rate is subtracted from an expected amount to obtain an amount in the present.

Except in exceptional cases, the discount rate is positive because before the promise of receiving money in the future we have the uncertainty of whether we will receive it or not, since there may be a problem that prevents us from receiving that money. Therefore, the farther the money we are going to receive, the less it will be worth now.

6 0
3 years ago
Derk owns 600 shares of stock in Rose Corporation. The remaining 1,400 shares of Rose are owned as follows: 200 by Derk's daught
Norma-Jean [14]
Hhbbbbhhhhhhhhhhhhhhhggggg
8 0
3 years ago
: i can't believe it! now our pay depends on meeting goals! doesn't effort count for anything anymore? i have the same goals tha
viva [34]

Setting the pay according to the goals achieved by a group may not be considered beneficial to everyone, thus decreasing motivation. Pay-for-performance or according to individual performance may help motivate the employee but increasing individuality in terms of performance may also decrease group cohesiveness or group-related values. The speaker here shows depreciation by undervaluing another's work to overvalue or protect one's own.

6 0
3 years ago
On January 1, 2013, Craig Company paid the premium on a four-year insurance policy in the amount of $12,000. At that time, the f
Dima020 [189]

Answer:

option (C) $3,000

Explanation:

Data provided:

Policy duration = 4 years

Policy amount = $12,000

Date on which premium is paid = January 1, 2013

Date on which entry is adjusted = December 31, 2015

Now,

The time passed between January 1, 2013 to December 31, 2015 = 3 years

Therefore,

Amount to be recognized as insurance exp. on December 31, 2015

= \$12,000\times\frac{\textup{Time elapsed}}{\textup{Total policy duration}}

= \$12,000\times\frac{\textup{3}}{\textup{4}}

= $9,000

Thus,

The balance in the prepaid insurance account = $12,000 - $9,000 = $3,000

Hence,

The correct answer is option (C) $3,000

3 0
3 years ago
Other questions:
  • This year Samantha gave each of her three nephews birthday gifts of $10,000 in cash. At Christmas, Samantha gave each of her thr
    8·1 answer
  • The following information is available for Birch Company at December 31: Money market fund balance $ 2,910 Certificate of deposi
    7·1 answer
  • The ____________ position has more room than the ____________ position, so larger substituents are more stable in the equatorial
    11·1 answer
  • Delectable Foods produces a gourmet condiment that sells for $18 per unit. Variable cost is $6 per unit, and fixed costs are $5,
    7·1 answer
  • Alejandra is Calculating the nondurable goods value for 2017. She is calculating the value by using the quantity of each final n
    10·1 answer
  • Fluno Corporation has 1 million shares outstanding at the end of fiscal 2005. Its stock is trading at $15 per share. It issued $
    9·1 answer
  • Bramble Corp. purchased a truck at the beginning of 2020 for $109000. The truck is estimated to have a salvage value of $3700 an
    9·1 answer
  • Tobias has a brokerage account and buys on the margin, which resulted in an interest expense of $52,000 during the year. Income
    15·1 answer
  • Hi, this is Business statistics. Please help me. Thank you
    13·1 answer
  • A traveler needs to _____________ only when upon returning from an international trip.
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!