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kirill115 [55]
2 years ago
12

What is the present value of a perpetuity that pays you annual, end-of-year payments of $950.00? Use a nominal rate (monthly com

pounding) of 7.75%. (Hint: use EAR).
Business
1 answer:
BARSIC [14]2 years ago
6 0

Answer:

Present value of perpetuity is $12,242.27

Explanation:

Nominal rate is compounded monthly so the effected rate will be different due to monthly compounding effect.

Effective annual rate is calculated as follows

EAR = [ ( 1 + r )^n ] - 1

EAR = [ ( 1 + 0.0775/12 )^12 ] - 1

EAR = [ ( 1.0775 )^12 ] - 1

EAR = 7.76%

Present value of perpetuity = Cash flow / discount rate

Present value of perpetuity = $950 / 7.76%

Present value of perpetuity = $950 / 0.0776

Present value of perpetuity = 12,242.27

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An organization's mission differs from strategic planning in that strategic planning is the basic purpose of the organization
lapo4ka [179]
Answer : true



Explanation:
7 0
3 years ago
Mohammad was an employee in the new product development department of Estay Inc. Mohammad was directly involved in the developme
NemiM [27]

Answer:

d. Mohammad cannot share with Ceries the confidential information he knows about Estay’s new product because he has a duty not to disclose confidential information he acquired during the agency.

Explanation:

Mohammad cannot share confidential information with an external competitor even when he is no longer in the service of the firm.

The only option left for Mohammad is if Estay gives him approval to share the piece of information.

7 0
3 years ago
Lucas spends $83. 42 in additional interest and charges on monthly payments as the result of a prior bankruptcy. If Lucas been a
Vika [28.1K]

Based on the amount saved monthly and the simple interest earned in 3 years, the amount in savings would be<u> $1,055.10.</u>

The amount saved for the year would be:

= 83.42 x 12 months

= $1,001.04

If this amount was saved at simple interest at 1.8% per year, the amount in 3 years would be:

<em>= Amount + ( Amount x rate x number of years)</em>

= 1,001.04 + (1,001.04 x 1.8% x 3)

= $1,055.10

In conclusion, the account would have $1,055.10

<em>Find out more on simple interest at brainly.com/question/2294792. </em>

7 0
2 years ago
Read 2 more answers
For each separate case below, follow the three-step process for adjusting the unearned revenue liability account at December 31
Vadim26 [7]

Answer:

1. Assume no other adjusting entries are made during the year a. Tao Co. receives $10,000 cash in advance for four months of legal services on October 1, 2017, and records it by debiting Cash and crediting Unearned Revenue both for $10,000. It is now December 31, 2017, and Tao has provided legal services as planned. hat adjusting entry should Tao make to account for the work performed from October 1 through December 31, 2017?

Step 1: Unearned Revenue has a credit balance of $10,000

Step 2: Unearned Revenue should have a credit balance of $2,500 only.

Step 3: Adjusting Journal Entry:

Debit Unearned Revenue $7,500

Credit Service Revenue $7,500

To record revenue for services performed to December 31, 2017.

2.  Caden started a new publication called Contest News. Its sub subscriber, Caden debits Cash and credits Unearned Subscription Revenue for the amounts received. The company has 100 new subscribers as of July 1, 2017. It sends Contest News to each of these subscribers every month from July through December Assume no changes in subscribers, prepare the journal entry that Caden must make as of December 31, 2017, to adjust the Subscription Revenue account and the Unearned Subscription Revenue account pay $24 to receive 12 monthly issues.

Step 1: Unearned Subscription Revenue has a credit balance of $2,400

Step 2: Unearned Subscription Revenue should have a credit balance of only $1,200.

Step 3: Adjusting Journal Entry:

Debit Unearned Subscription Revenue $1,200

Credit Subscription Revenue $1,200

To record subscription revenue for services performed to December 31, 2017.

Explanation:

Tao Co and Caden follow the three-step process of adjusting unearned revenue liability accounts at year-end.  The purpose of the steps is to ensure that correct amounts remain as balances in the unearned revenue accounts.  The steps also help to adjust the Earned Revenue account to its proper amount in recognition of goods or services provided in accordance with the accrual concept and the matching principle of generally accepted accounting principles.

8 0
2 years ago
Stormer Company reports the following amounts on its statement of cash flow: Net cash provided by operating activities was $30,5
DIA [1.3K]

Answer:

$38,500

Explanation:

Sheridan's ending cash balance can be calculated as;

= Beginning cash balance + cash provided by operating activities + cash provided by financing activities - cash used by investing activities

= $5,500 + $30,500 + $13,500 - $11,000

= $38,500

Therefore, the ending cash balance is $38,500

6 0
2 years ago
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