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Leona [35]
3 years ago
13

An investor has an opportunity to purchase an investment that will provide $11,000 at the end of three years, and $50,000 at the

end of five years. If the property is expected to be sold at the end of the sixth year for $100,000 and the investor requires a 12% rate of return, what amount should he or she pay for the investment today?a. $161,000 b. $50,663 c. $81,568 d. $86,864
Business
1 answer:
taurus [48]3 years ago
8 0

Answer:

Option (d) $86,864

Explanation:

Present value = Cash flow × Discounting factor

Here,

Discounting factor = ( 1 + r )⁻ⁿ

n = the year of cash flow

r = discount rate = 12%

Year (n)       Cash flow        Discount factor     Present Value

3                  $11,000              0.71178               $7,830  

5                  $50,000              0.567427            $28,371  

6                  $1,00,000           0.506631            $50,663

Therefore,

The amount he or she should pay for the investment today

= ∑(Present value)

= $7,830 + $28,371 + $50,663

= $86,864

Hence,

Option (d) $86,864

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Answer:

The correct answer is option (B).

Explanation:

According to the scenario, the given data are as follows:

Par value of bond = $10,000

Coupon rate Annual = 5%

So, Coupon rate semi annual = 2.5%

Inflation rate semi annual = 2%

So, we can calculate the coupon payment for six months by using following formula:

New par value of bonds after inflation = $10,000 + ( $10,000 × 2% ) = $10,200

So, Coupon payment = New par value × Coupon rate semi annual

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= $255

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Complete Question:

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O Important ethical concepts

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Answer:

Context, content and culture are:

O Three dimensions of evaluating corporate gifts.

Explanation:

Corporate gifts may turn out to be regarded as bribery if they are meant to induce the other party to alter their behaviors.  This is why in evaluating corporate gifts, the criteria have always included the context (the circumstances in which the gifts are given), the content (how much is given), and the culture (the accepted general practice in a particular industry, locality, or region).  Generally, corporate gifts are given either as means of showing appreciation, creating positive first impression, or returning some favors.

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Answer:

The correct answer would be option A, You should only request a connection if you know the person.

Explanation:

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Answer:

$258,434,439.9

Explanation:

Calculation for what is the equivalent annual cost of the contract

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