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
skelet666 [1.2K]
3 years ago
5

A basketball player is offered the following contract today, Jan. 1, 2012: $2 million immediately, $2.40 million in 2012, $2.90

million in 2013, $3.60 million in 2014, and $3.80 million in 2015. Assume all payments other than the first $2 million are paid at the end of the year. If the appropriate discount rate is 10 percent per year, what is the present value of the deal?
Business
1 answer:
weeeeeb [17]3 years ago
8 0

Answer:

The answer is $11.24 million Explanation:

Using the formula

Present worth = x/(1+R/100)∧n

R = 10%

Year 2012

2.40/(1+10/100)∧1

= 2.40/(1+0.1)∧1

= 2.40/(1.1)∧1

2.40/1.1

= 2.18

Year 2013

2.90/(1+10/100)∧2

= 2.90/(1+0.1)∧2

= 2.90/(1.1)∧2

2.90/1.21

= 2.396

Year 2014

3.60/(1+10/100)∧3

= 3.60/(1+0.1)∧3

= 3.60/(1.1 )∧3

3.60/1.331

= 2.70

Year 2015

To determine the present value

2+3.80/(1+10/100)∧4

= 5.8/(1+0.1)∧4

5.8/(1.1)∧4

5.8/1.4641

= 3.96

Therefore the present value, add together the value from year 1 to year 4

2.18 + 2.396 + 2.70 + 3.96

= 11.236

= 11.24 Approximately

Therefore the present value is $11.24 millions

You might be interested in
Select all the correct answers.
Lorico [155]

Answer:

A decrease in demand leads to a decrease in supply.

A decrease in price leads to a decrease in supply.

An increase in price leads to an increase in supply.

Explanation:

Supply refers to the volume of a product that sellers are willing to sell in the market at a given price. As per the law of supply, a higher price motivates sellers to avail more products in the markets. Sellers or suppliers are businesses and are motivated by higher profits.  When prices are high, the profit margin will be high, which is an incentive for increased supply. Lower prices have lower margins, which is a risk to a business. Low prices result in reduced prices.

Supply is influenced by demand. If supply does not match demand, there will be either a shortage or excess supply in the market. When demand is low, sellers will reduce supply to avoid losses associated with excess supply .

8 0
2 years ago
Read 2 more answers
Which of the following is FALSE? Group of answer choices Most of the maquiladora industry is located in the states of Mexico tha
REY [17]

Answer:

The maquiladora industry has not created much employment in Mexico because most of the production is capital intensive

Explanation:

maquiladora industry in Mexico are company that allow industries to perform production by converting raw materials into finished product for exportation and for local use by making this industry a "Tax- free". or making them to have duty free. Examples of maquiladora industry are

Acer Peripherals, Bali Company, Inc.

and Bayer Corp./Medsep. It should be noted that The maquiladora industry has not created much employment in Mexico because most of the production is capital intensive.

7 0
3 years ago
Although there are some clear disadvantages associated with extending credit to customers, such as bad debt costs, most managers
WITCHER [35]

Answer:

The primary advantage they refer to is additional sales revenue.

Explanation:

Extending credit to customers is generally done through use of credit cards these days. This does allow the customers to buy goods and services on credit and pay later for those goods.

Offering credit is beneficial for both the shopkeepers or merchants and the buyers. Customers do not have to pay cash (as they can run out of cash at times), so they buy more and this increases the sales revenue for the merchants, which becomes the primary advantage for them and outweighs the costs.

5 0
3 years ago
Browning's has a debt-equity ratio of .47. what is the equity multiplier?
jek_recluse [69]

A. 1.47

Have a good night


4 0
3 years ago
In reviewing the agreement between AdCreate and Anchor Motors, Jacob Stein found that sales ofAnchor rose 2.8% compared to the p
kakasveta [241]

Answer:

AdCreate billed Anchor Motors $529,412 for the third quarter in 2010

Explanation:

The advertizing company usually takes a 15% commision

Which means from the total amount billed to customer 15% ar commision which means:

money paid to media + 15% comission of the billed amount= total amount billed

450,000 + 0.15X = X

Now, we try to solve for X and get the amount billed to anchor motors.

X = 450,000/.85 =<em> 529.411,76</em>

8 0
3 years ago
Other questions:
  • Sémeuo is a German transnational food and beverage company. Recently, some of the products were rejected by the quality control
    6·1 answer
  • Investors require a return of 13 percent on the stock for the first three years, a return of 11 percent for the next three years
    14·1 answer
  • On March 31, 2021, Southwest Gas leased equipment from a supplier and agreed to pay $350,000 annually for 15 years beginning Mar
    13·1 answer
  • The purchase of raw materials on account in a process costing system is recorded with a:A. Debit to Purchases and credit to Cash
    8·1 answer
  • The Guitar Shoppe reports the following sales forecast: August, $130,000; and September, $230,000. Total sales include 35% cash
    10·1 answer
  • Using the information below, calculate net income for the period:
    6·1 answer
  • PLEASE HELP ASAP!! CORRECT ANSWER ONLY PLEASE!!!
    12·1 answer
  • B. Write five importance of budget.?​
    15·1 answer
  • What is strategy?
    7·1 answer
  • A group of 10 golfing buddies have the following annual incomes: $32,000, $12,000, $56,000, $120,000, $10,000, $38,000, $70,000,
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!