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
trapecia [35]
3 years ago
7

Your grandfather has promised to give you​ $500 a year at the end of each of the next four years if you earn Cs or better in all

of your courses each year. Using a discount rate of​ 7%, which of the following is correct for determining the present value of the​ gift?
a. PV = $500x7%x4
b. PV = $500x(PV factor, i=4%, n =7)
c. PV = $500x(Annuity PV factor, i=7%, n=4)
d. PV = $500x(Annuity PV factor, i=7%, n=4)
Business
2 answers:
aleksandr82 [10.1K]3 years ago
7 0

Answer:

d. PV = $500x(Annuity PV factor, i=7%, n=4)

Explanation:

A fix Payment for a specified period of time is called annuity. The discounting of these payment on a specified rate is known as present value of annuity.

Formula for Present value of annuity is as follow

PV of annuity = P x Present value factor

PV of annuity = P x [ ( 1- ( 1+ i )^-n ) / i ]

As discount rate is 7%, so

i = 7%

Number of payments is 4

n = 4

Bezzdna [24]3 years ago
5 0

Answer:

The correct answer is option (d) PV = $500x(Annuity PV factor, i=7%, n=4)

Explanation:

Given data;

P = $500

rate (r) = 7%

years (n)= 4

The present value of goods is determined using the formula;

PV of annuity = P x Annuity present value factor----------------1

But,

<h3>Annuity present value factor =  [1-(1+i)⁻ⁿ)]/i ------------2</h3>

Putting equation 2 into equation 2, we have

PV of annuity = P x Annuity present value factor

<h3>PV of annuity = P * [1-(1+i)⁻ⁿ)]/i -----------------------3</h3>

where;

PV = present value

i = rate

n = number of years

P = price

To calculate PV using equation 3, option (d) is the appropriate option

You might be interested in
Kordel Inc. acquired 75% of the outstanding common stock of Raxston Corp. Raxston currently owes Kordel $500,000 for inventory a
Nady [450]

Answer:

what amount of Raxston’s liability should be eliminated? d.$500,000

Explanation:

At different levels of the consolidation, certain intercompany payables and receivables balances must be eliminated. Eliminations are only required in the context of a consolidation where the trading parties are both included in a given consolidation.

8 0
3 years ago
Madison Company issued an interest-bearing note payable with a face amount of $30,000 and a stated interest rate of 8% to the Me
kondaur [170]

Answer:

zero

Explanation:

It will be Zero. Because its not an operating activity. It will come under Finance activity in the cash flow of Madison company .

5 0
3 years ago
Suppose an apartment complex converts to a condominium, so that the former renters are now owners of their housing units. Suppos
Lorico [155]

Answer:

GDP is likely to remain same as a result of this conversion.

Explanation:

GDP is the total value of goods & services, produced by an economy, during a given year.

It can be calculated by 2 methods

  • By Expenditure method : GDP = Private Final Capital Expenditure + Govt. Final Consumption Expenditure + Gross Domestic Capital Formation + Net Exports
  • By Income method : NDP = Compensation of Employees + Operating Surplus (Rent + Profit + Income) + Mixed Income

Given case - Converting a rented apartment into a resident owned condominium , with value of housing services = rent formerly paid :

This brings no change in the GDP, as : The apartment 'rent' previously paid was included in 'operating surplus' of national income, by Income method. And, the equal condominium value is now included in investment addition i.e 'Gross domestic capital formation' , by Income method.

6 0
3 years ago
The project will require an investment of $10,000 in new equipment. the equipment will have no salvage value at the end of the p
maks197457 [2]

Answer:

The answer is attached

Explanation:

Download xlsx
4 0
3 years ago
Explanation of the fair trade logo​
inn [45]

~Hello There!~

The fair trade logo means that the cost of the product provides a fair living wage for the workers that produced/created the items.

Hope This Helps You!

Good Luck :)

Have A Great Day ^_^

- Hannah ❤

5 0
3 years ago
Other questions:
  • assume that you provide your services in a company as its HR representative you must create the code of conduct manual for the c
    7·1 answer
  • Example: Davidson-Getty Chemicals has 8,000 employees. Each employee earns two weeks to paid vacation per year. Vacation time no
    14·1 answer
  • Prepare the Budgets given the following information Budgeted sales are expected to be: January 200 Units February 300 Units Marc
    6·1 answer
  • Nichols Fruits leased farm equipment from King Machinery on January 1, 2021. The present value of the lease payments discounted
    8·1 answer
  • On July 1, 2016 Harold paid $10000 for a Ten year bond with a stated interest rate of 5%, payable annually on July 1. On April 1
    12·1 answer
  • When planning an information system, a company must consider how a new system will interface with older systems, which are calle
    7·1 answer
  • The numerator of the return on total assets is: a.net income. b.net income minus preferred dividends. c.net income plus tax expe
    12·1 answer
  • On 1 July 2019, Fisher Ltd decides to lease a cargo ship from XFinance Ltd. The term of the lease is 20
    9·1 answer
  • A synchronous manufacturing system does not have excess capacity throughout the system, except for the bottleneck.
    11·1 answer
  • Incumbent firms prefer to focus on incremental innovations which reinforce their established organizational structure and power
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!