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photoshop1234 [79]
3 years ago
7

You just signed a business consulting contract with one of your clients. The client will pay you $50,000 a year for five years f

or the service you will provide over this period. You anticipate the general inflation rate over this period to be 6%. If your desired inflation-free interest rate (real interest rate) is to be 4%, what is the worth of the fifth payment in present dollars
Business
1 answer:
eimsori [14]3 years ago
3 0

Answer:

The present value of the fifth payment is $30710.

Explanation:

The rate of interest must include the effect of inflation which can be found by the fisher formula:

(1+i) = (1+r) * (1+f)

After putting values we have:

(1+i) = (1+.04) * (1+.06) = 1.1024

This implies

i = 10.24%

So the present value of fifth year inflow is:

Present Value = $50,000 * discount factor at 5 years time

= $50,000 * 1/(1 + 0.1024)^5 = $50,000 * 0.614 = $30710

So the present value of the fifth payment that is receivable in five years time is worth $30710 in todays value.

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Riverbed Corporation’s adjusted trial balance contained the following asset accounts at December 31, 2020: Cash $7,280, Land $49
Rzqust [24]

Answer:

Explanation:

Balance sheet: In the balance sheet, the assets, liabilities, and stockholder equity is recorded. In this the accounting equation is used which is shown below:  

Total assets = Total liabilities + stockholder equity  

The debit and credit side of the balance sheet should always be equal and balanced.  

Moreover, it always is prepared on the specified date.

The land is a fixed asset and patents is an intangible asset. Thus these items would not come in the current asset section

The preparation of the current assets section of the balance sheet is presented in the spreadsheet. Kindly find the attachment below:

5 0
2 years ago
After cooking food that must sit for a little while before being consumed, Sherry is aware that the food must remain at a certai
Aliun [14]

Answer:

140°F

Explanation:

140°F is ordinary temperature for eliminating microscopic organisms, yet it will likewise effect and truly burn individuals. In this regard, sherry knows about that, which is the reason she comprehend that she needs to hold back to consume it. High temperatures, 140°F or more, ought not be brought into normal private or business pipes that go to end client taps and showers etc.

8 0
2 years ago
Jessica simpson has decided to open a small fast food place that specializes in buffalo wings. to do so she must resign from her
In-s [12.5K]

Answer: Jessica's implicit costs are $46,000.

Implicit costs are the benefits that an individual gives up when they take a decision. Implicit costs are also known as opportunity costs.

In this case, Jessica will lose her salary of $40,000 each year. She will also lose the rent of $6000 a year from the building if she opens her fast food joint. So, total implicit costs are:

Total implicit cost = 40000+6000 = 46000

6 0
2 years ago
Which country has had a higher growth rate than the US over about the last 120 years?
Drupady [299]
Highest growth rate based on GDP rate is found in Japan. This has been an ongoing trend for the last 100 years.
6 0
2 years ago
1. A firm in a competitive market has the following cost structure: Output Total Costs 0 $10 1 $12 2 $15 3 $19 4 $24 5 $30 6 $37
iogann1982 [59]

Answer:

b. 6 units

Explanation:

Output     Revenue  Costs = Profit  ( Revenue - Costs)

   0                   0         10 =  -10

   1                    8         12 =  -4

   2                   16        15 =   1

   3                   24        19 =   5

   4                   32        24 =   8

   5                   40        30 =   10

   6                   48         37 =   11

   7                   56        46 =   10

   8                   64        55 =   9

   9                   72        65 =    7  

Note: The revenue is calculated by multiplying output by the market price of $8.

The firm should produce 6 units to maximize their profit which is $11.

3 0
3 years ago
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