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
Jay and jim spears own a lawn irrigation system business. they perform installations and maintenance of these systems. several o
Stells [14]

 

Jay and Jim does not only take a chance that a bigger problem may occur, since they foresee that there is a risk if they permit an illegal worker to drive a truck and has an accident on the job but they are also indirectly setting the ethics code for their firm.





8 0
3 years ago
Q:
Pani-rosa [81]

Answer:

3. expansionary monetary policy

Explanation:

To help accomplish this during recessions, the Fed employs various monetary policy tools in order to suppress unemployment rates and re-inflate prices. These tools include open market asset purchases, reserve regulation, discount lending, and forward guidance to manage market expectations.

4 0
2 years ago
Mrs. Smith operates a business in a competitive market. The current market price is $7.50. At her profit-maximizing level of pro
adelina 88 [10]

Answer:

Option (D) is correct.

Explanation:

Given that,

Current market price = $7.50

Average variable cost = $8.00

Average total cost = $8.25

It can be seen from the above information that current market price is less than the average variable cost, i.e, $7.50 < $8.00.

Mrs. Smith should shut down its production in the short run as well as in the long run until the point where current market price is greater than or equal to average variable cost.

4 0
3 years ago
Tyler Apiaries sells bees and beekeeping supplies. Bees​ (including a​ queen) are shipped in special packages according to weigh
Sergio039 [100]

Answer: 0.143

Explanation:

Given the following :

Average package weight(m) = 1.9kg

Standard deviation(sd) = 1.4kg

Upper Tolerance Limit (UTL) = 2.5kg

Lower Tolerance limit (LTL) = 1.1kg

Cpk = min[( average weight -Lower Tolerance Limit / 3 (standard deviation) , (UTL- average weight / 3(Standard Deviation)]

Cpk = min[( 1.9 - 1.1 / 3 (1.4)) , (2.5 - 1.9 / 3(1.4))]

Cpk = min[(0.8 / 4.2), (0.6 / 4.2)]

Cpk = min[0.190, 0.143])

Hence,

Process capability index = 0.143

3 0
3 years ago
Mountaineer excavation operates in a low-lying area that is subject to heavy rains and flooding. because of this, mountaineer pu
nordsb [41]

Answer:

1. Recore the purchase of insurance in advance on March,1.

Debit Prepaid Insurance $36,000

Credit Cash $36,000

2. Record the adjusting entry on December, 31.

Debit Insurance Expense $30,000

Credits Prepaid Insurance $30,000

Explanation:

Mountaineer excavation purchases one year of flood insurance in advance on March 1, paying $36,000 ($3,000/month). The company records the insurance as the prepaid Insurance:

Debit Prepaid Insurance $36,000

Credit Cash $36,000

On December, 31, the last day of the following 10 months, the company records an adjusting entry that Credits Prepaid Insurance for $30,000 ($3,000/month times the 10 months) and Debits Insurance Expense for $30,000

Debit Insurance Expense $30,000

Credits Prepaid Insurance $30,000

5 0
3 years ago
Other questions:
  • Wither Spoon Company requires a new manufacturing facility. It found three locations; all of which would provide the needed capa
    8·1 answer
  • ________ research provides insight into the underlying reasons for how and why consumers think, feel, and behave as they do, usi
    7·1 answer
  • At year-end, Yates Company estimates that $1,500 of its accounts receivable balance is uncollectible. Yates uses the allowance m
    15·1 answer
  • Start a conversation with me and you get points plus brainliest
    8·2 answers
  • You are considering investing in a no-load mutual fund with an annual expense ratio of .6% and an annual 12b-1 fee of .75%. You
    6·2 answers
  • In order to produce 100 pairs of oven gloves, Marcia incurs an average total cost of $2.50 per pair. Marcia’s marginal cost is c
    12·1 answer
  • Angelica (23 years old) studied dance in college and graduated a year ago. She currently works as a dance instructor at a high s
    15·1 answer
  • What of these is related to financial incentives
    7·1 answer
  • Suppose a monopolist produces output where total revenue is maximized. at that output, the price elasticity of demand for the mo
    14·1 answer
  • in 1978, the texas constitution was amended (article 8, section 22), so that if the economy of the state shrinks,
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!