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
ivann1987 [24]
3 years ago
15

Which cash flow would you rather pay, $425 today or $500 in two years if interest rates are 10 percent? Why?

Business
1 answer:
DerKrebs [107]3 years ago
7 0

Answer:

Explanation:

The main goal is to compare these two based on the same terms; present values. Find the present value of $500 today by discounting it using 10% interest rate over two years.

PV = FV/ (1+r)^n

where FV = Future value = $500

r = discount rate = 10% or 0.10 as a decimal

n = total duration of investment  = 2

PV = $500/(1+0.10)^2

PV = $500/1.21

PV = $413.22

Since you are basing the decision on what you would rather pay, you would want a lower pay amount. The $425 is already in its present value terms and it is more expensive. Therefore, you would prefer to pay $500 in two years.

You might be interested in
In economics, the term "capital" refers to :
IrinaVladis [17]

Answer:

D. the money in one's pocket

Explanation:

this is so because the financual assets needed fpr a business to produce good and/or services requires money

7 0
3 years ago
A 20-year-old student wants to save $5 a day for her retirement. Every day she places $5 in a drawer. At the end of each year, s
ollegr [7]

Answer:

Instructions are listed below

Explanation:

Giving the following information:

At the end of each year, she invests the accumulated savings ($1,825) in a brokerage account with an expected annual return of 8%. She will invest for 45 years.

A) We need to use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

FV= {1825[(1.08^45)-1]}/0.08= $705,372.75

B) n= 25

FV= {1825[(1.08^25)-1]}/0.08= $133,418.34

C) FV= 705,372.75     A=?

We need to isolate A:

A= (FV*i)/{[(1+i)^n]-1}

A=(705,372.75*0.08)/[(1.08^25)-1]

A= $9,648.64

7 0
3 years ago
Rubio recently invested $20,000 (tax basis) in purchasing a limited partnership interest. His at-risk amount is $15,000. In addi
kati45 [8]

Answer:

$2,000

Explanation:

From the question, the initial tax basis of Rubio is $20,000.  

In a partnership, share of profit will increase the initial basis while share of loss will reduce it.  

As the share of Rubio in the limited partnership loss for the year is $22,000, it will make his tax basis to fall to zero because the loss of $22,000 is greater than his tax basis. The amount by which the loss is greater than his tax basis, i.e. $2,000 ($22,000 - $20,000) will be the loss that is allowed considering only the tax basis loss limitations.  

Therefore, $2,000 loss is allowed to be carried over due only to the tax basis loss limitation.

4 0
3 years ago
Where would you likely find the cheapest college textbook prices?
maw [93]
The Apex answer is: You will likely find the cheapest college textbook prices at an ONLINE BOOKSTORE

Hope this helps :)
3 0
3 years ago
Read 2 more answers
The ownership of the national debt is about __________ percent by u.s. government or quasi-government agencies (federal reserve)
alexgriva [62]

The ownership of the national debt is about <u>60 </u>percent by U.S government or quasi-government agencies (federal reserve).

<h3>What do you mean by quasi-government?</h3>

A quasi-governmental healthcare organization that is funded by the government but is privately run.

Quasi-government is used to represent organizations, districts, commissions, businesses, and municipal divisions that are primarily operated by the private sector but are essentially owned by the government.

Hence, The ownership of the national debt is about <u>60 </u>percent by the U.S government or quasi-government agencies (federal reserve).

Learn more about quasi-government:

brainly.com/question/6849845

#SPJ4

8 0
1 year ago
Other questions:
  • In the past, Taylor Industries has used a fixed−time period inventory system that involved taking a complete inventory count of
    15·1 answer
  • A bicycle chain is pulled tightly so that mn is a common tangent of the gears?
    13·2 answers
  • Paul Company purchased a dump truck for $25,000. In addition, Paul Company paid freight charges of $500, and $800 to paint the c
    12·1 answer
  • The Red Bud Co. pays a constant dividend of $1.80 a share. The company announced today that it will continue to do this for anot
    9·1 answer
  • Suppose a consumer has the following utility function defined over the 2 goods X and Y: a. If this consumer originally consumed
    7·1 answer
  • Following are examples of control deficiencies that may represent significant deficiencies or material weaknesses. For each cont
    10·2 answers
  • Payton Corporation provided the following information for the​ year: Beginning Balancelong dash​Work-in-Process Inventory $ 25 c
    15·1 answer
  • The price elasticity of the supply of teenage labor services is approximately 1.36. Suppose the minimum wage rises from $7.25 pe
    6·1 answer
  • A company reports the following amounts for 2021:_________. Inventory (beginning) $ 20,000 Inventory (ending) 35,000 Purchases 1
    8·1 answer
  • What is the author's main claim or argument?<br> Pizza is the best
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!