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Illusion [34]
3 years ago
10

A 16-year annuity pays $1,800 per month at the end of each month. If the discount rate is 8 percent compounded monthly for the f

irst seven years and 10 percent compounded monthly thereafter, what is the present value of the annuity?
Business
2 answers:
KengaRu [80]3 years ago
8 0

Answer:

PV = $188,653.22

Explanation:

Given the following information, firstly we need to calculate present value of cash flow for the last 9 years. The present value of cash flow therefore

PVA2= $1,800 {[1 – 1 / (1 + 0.10 / 12)^108] / (0.10 / 12)}

PVA2= $127,852.84

Thus, present value of Cashflow today

PV = $127,852.84 / [1 + (0.08 / 12)]^84+ $1,800{[1 – 1 / (1 + 0.08 / 12)^84] / (0.08 / 12)}

PV = $188,653.22

castortr0y [4]3 years ago
8 0

Answer:

The present value of annuity is $657,720

Explanation:

Present value of an annuity is the total cash value of all future annuity payments, given a determined rate of return or discount rate.

Present value of annuity = P[\frac{1 - (1 + r)^{-n} }{r}]

where: P is the periodic payment, r is the rate per period and n is the number of periods.

The discount rate is compounded for the first 7 years and thereafter.

The present value of annuity in the first 7 years can be calculated as:

P = $1800 × 12 = $21,600 per year, r = 8% and n = 7 years.

             PV_{7} = 21600[\frac{1 - (1 + 0.08)^{-7} }{0.08}]

                    = 21600[\frac{0.42}{0.08}]

           PV_{7}  = $113,400

Thus, the present value after the first 7 years = $113,400.

Therefore, the present value of the annuity = 113,400[\frac{1 - (1 + 0.1)^{-9} }{0.1}]

                   = 113,400[\frac{0.58}{0.1}]

                  = $657,720

The present value of annuity is $657,720.

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At a pre-school gym, 52.1% of the students are girls. What is the probability that a randomly chosen student is boy?
Vadim26 [7]

impossible

Explanation:

because the girls are over populated

6 0
2 years ago
Given the following data for Glennon Company, compute (A) total manufacturing costs and (B) costs of goods manufactured:
erica [24]

Answer:

1. Glennon Company

Total manufacturing costs and costs of goods sold:

C) $790,000 $810,000

2. Carr Company

Annual Rate of Return for Project Soup:

B) 7.5%.

Explanation:

1A) Total Manufacturing costs

Direct materials used          $270,000

Beginning work in process     40,000  

Direct labor                            200,000

Ending work in process         (20,000 )

Manufacturing overhead      300,000

Total manufacturing costs $790,000

1B) Costs of goods sold:

Beginning finished goods           50,000

Costs of goods manufactured  790,000

less Ending finished goods        (30,000)

Cost of goods sold                   $810,000

2)                                Project Soup       Project Nuts

Initial investment         $400,000           $600,000

Annual net income          30,000                46,000

Net annual cash inflow   110,000              146,000

Annual Rate of Return = Annual net income/Initial Investment

= $30,000/$400,000 x 100 = 7.5%

8 0
3 years ago
Underline all of the following costs that are included in the cost of land.
Vladimir [108]

Answer:

a) Removal of unwanted buildings

d) Brokerage commission

e) Survey fees and legal fees

f) Purchase price

4 0
3 years ago
Which statement concerning monopolistic competition is false? a. Long-run equilibrium under monopolistic competition and pure co
11111nata11111 [884]

Answer:

b. Monopolistic competition is likely to result in a greater variety of product brands than pure competition.

Explanation:

Monopolistic competition is a competitive structure in which few companies operate in an industry that offers the same type of service or product, but differences. In this way each firm holds the relative monopoly of the product. For example, in the toothpaste market, companies sell the same product (toothpaste) but each company tries to differentiate their product from others.

In the competitive structure, several companies sell various products in a free competitive regime, having no monopoly power. Thus, the number of companies and products is infinitely larger than in monopolistic competition.

5 0
3 years ago
A semiprofessional baseball team near your town plays two home games each month at the local baseball park. The team splits the
kogti [31]

Answer and Explanation:

The computation is shown below:

The revenue earned by team for each game is

= $10 + 50% of $8

= $10 + 4

= $14

Now the revenue for each session is

= $14 × 30 PEOPLE × 6 games

= $2,520

The total cost would be

= $100 × 3 + $1,000 × 3

= $300 + $3,000

= $3,300

And, the team would finished the season for profit of

= Revenue - cost

= $2,520 - $3,300

= $780 loss

6 0
2 years ago
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