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Anna007 [38]
3 years ago
14

An investment pays you $100 at the end of each of the next 3 years. The investment will then pay you $200 at the end of Year 4,

$300 at the end of Year 5, and $500 at the end of Year 6. If the interest rate earned on the investment is 8 percent, what is its present value? What is its future value?
Business
1 answer:
Nesterboy [21]3 years ago
8 0

Answer:

Present value is $923.90 and future value is $1,466.24

Explanation:

Given:

$100 is received in the next three years. It's an annuity so refer present value of annuity table. Present value annuity factor for 3 years, 8% is 2.5771. So present value of this will be $257.71 (2.5771 × 100). Similarly calculation for inflows from the investment are as follows:

$200 at 8% in the 4th year, present value factor of lumpsum amount is 0.7350 which is $147 (0.735 × 200)

$300 at 8% in the 5th year, present value factor of lumpsum amount is 0.6806 which is $204.18 (0.6806 × 300)

$500 at 8% in the 6th year, present value factor of lumpsum amount is 0.6302 which is $315.10 (0.6302 × 500)

Total present value of investment is $923.90 (257.71 + 147 + 204.18 + 315.10)

Present value of inflows are calculated. Calculate future value of these amounts.

future value factor @8%, 6 years is 1.5869.

Future value of first inflow is $408.96 (257.71 × 1.5869)

Future value of second inflow is $233.27 (147× 1.5869)

Future value of third inflow is $324.01 (204.18 × 1.5869)

Fourth Inflow in the sixth year is $500

Total present value of investment is $1,466.24 (408.96 + 233.27 + 324.01 + 500)

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A nongovernmental not-for-profit organization received the following donations of corporate stock during the year:Donation 1 Don
Anna71 [15]

Answer:

C. $14,000

Explanation:

Donated securities are initially recorded at the fair value on the date the gift is received. The securities will be reported at their market value at the end of the year i.e. the balance sheet date. Fair value at the year end will thus be the sum of the fair value of the two donations at the end of the year i.e $10,000 + $4,000 = $14,000.

4 0
3 years ago
For the first time in two years, Big G (the cereal division of General Mills) raised cereal prices by 4 percent. If, as a result
bearhunter [10]

Answer:

b. inelastic

c. Yes - it decreased

Explanation:

Elasticitiy of demand measures the responsiveness of quantity demanded to changes in price.

Elasticity of demand = percentage change in quantity demanded/ percentage change in price

= -2/4 = -0.5

The absolute value is 0.5

If the absolute value of the coffiecnet of elasticity of demand is less than one, demand is inelastic.

Demand is inelastic if a change in price has no effect on quantity demanded .

We can tell that the quantity demanded fell because of the negative sign in front of the percentage change in quantity demanded.

I hope my answer helps you

7 0
3 years ago
1. ______control environment risk assessment control procedures monitoring information and communication.2. ______provides reaso
Yuki888 [10]

Answer:

  1. Five internal controls
  2. Control procedures.
  3. Risk Assestment.
  4. Information and communication.
  5. Monitoring.
  6. Control environment.

Explanation:

1. <u>Five internal</u> control environment risk assessment control procedures monitoring information and communication.2. <u>Control procedures</u> provides reasonable assurance that business goals will be achieved.3. <u>Risk assessment</u> identify, analyze and assess likeliness of vulnerabilities.4. <u>Information and communication</u> used by management for guiding operations and ensuring compliance with requirements.5. <u>Monitoring</u> used to locate weaknesses and improve controls.6. <u>Control environment</u> overall attitude of management and employees

There are five internal control management that help in controling and managing overall work environment.

4 0
3 years ago
Maker-Bot Corporation has 10,000 shares of 10%, $90 par value, cumulative preferred stock outstanding since its inception. No di
AleksandrR [38]

Answer:

D) $130,000

Explanation:

We can compute this by calculating the total dividends payable to preferred stock holders each year.

Dividends payable = 10,000 * 90 * 0.10 = $90,000

Since the shares are cumulative, the total preferred dividend payable at the end of third year is = $90,000 * 3 = $270,000

So common share in dividend = Total paid - Preferred dividend cumulative

Common Dividend share = 400,000 - 270,000 = $130,000

Hope that helps.

5 0
2 years ago
You wish to take an Excel course. You may enroll at one within your school or you may take a community class at the local librar
Paraphin [41]

Answer:

The chosen option (considering enrollment costs and opportunity cost) is:

b) College course.

Explanation:

a) Data and Calculations:

Costs/Benefits

                           College Course          Community Course

Cost                              $2,600                         $1,390

Opportunity costs         -2,080                          2,080

Net costs                         $520                        $3,470

Distance to course      0.40 miles                    16 miles

                                  (walking distance)      (driving distance)

Timing of course          Weekday                     Weekend

Number of meetings    16                                 8

b) With the College course option, you will earn $2,080 ($260 * 8) weekdays to offset part of the enrollment cost.  With the Community course option, $2,080 will be lost in opportunity cost, thereby increasing the total costs incurred.  These costs are apart from the driving costs associated with traveling 16 miles to the Community Course at the local library.

5 0
3 years ago
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