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Sergio [31]
3 years ago
8

Bryant Investments is putting out a new product. The product will pay out $32,000 in the first year, and after that the payouts

will grow by an annual rate of 2.75 percent forever. If you can invest the cash flows at 7.25 percent, how much will you be willing to pay for this perpetuity? (Round to the nearest dollar.)
Business
1 answer:
arsen [322]3 years ago
8 0

Answer:

Present Value= $711,111.11

Explanation:

Giving the following information:

Cash flow= $32,000

Growth rate= 2.75 percent forever.

Interest rate= 7.25 percent

To calculate the present value, we need to use the following formula for a perpetual annuity with growing rate:

PV= Cf/ (i - g)

g= growth rate

i= interest rate

PV= 32,000/ (0.0725 - 0.0275)

PV= $711,111.11

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Answer:

The correct answer is A

Explanation:

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Acquisition and payment of the long lived assets, which are those assets, the business retain for at least one year. The revenue will not be included in the cycle because it is related to the payables.

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Question 2
Gnesinka [82]

Answer:

Check the explanation

Explanation:

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2. 01.04.2020 Equity Share Application A/c2800000  

To Share Capital A/c Cr                                                    2000000

To Share Allotment A/c Cr                                                  800000

(Being allotment made to shareholders)    

3. 01.04.2020 Equity Share Allotment A/c  2000000  

To Equity Share Capital A/c Cr                                           2000000

(Being allotment amount transfer to capital account)    

4. 01.04.2020 Bank A/c Dr                         1200000  

To Equity Share Allotment A/c Cr                                       1200000

(Being Balance allotment amount received)    

5. 01.04.2020 Share Issue Expenses A/c Dr  10000  

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(Being Share issue Expenses paid)    

6. 30.06.2020 Bank A/c Dr                           450000  

To Share Capital A/c Cr                                                       450000

(Being Right Share Issued)    

7. 01.10.2020 Bank A/c Dr                            250000  

To Share Capital A/c Cr                                                      250000

(Being Options given to shareholders)    

8. 01.10.2020 Share Expenses A/c Dr.     50000  

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3 0
3 years ago
Which one of these factors plays a role in determining the extent and duration of frictional unemployment?
Pavel [41]
The correct answer for the question that is being presented above is this one: "B. the extent to which government legislation requires firms to provide health insurance for employees."

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5 0
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Answer:

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6 0
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