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Deffense [45]
3 years ago
8

Your grandparents would like to establish a trust fund that will pay you and your heirs $215,000 per year forever with the first

payment one year from today. If the trust fund earns an annual return of 4.2 percent, how much must your grandparents deposit today?
Business
1 answer:
Tju [1.3M]3 years ago
7 0

Answer:

They should invest $5,119,047.619 today.

Explanation:

The trust fund will pay a fixed amount forever thus it is a perpetuity. The value of perpetuity or Price of perpetuity is the amount that the perpetuity is worth in today's terms based on the cash flows it will generate in future.

The formula for the value or price of perpetuity is,

P0 or V = Cash Flow / r

Thus,

P0 or V = 215000 / 0.04   =  $5,119,047.619

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timama [110]

Answer:

The answers are:

  • Cr Accounts receivable $4,000
  • Dr $3,332 Cash
  • Dr $68 Sales discount
  • Dr $600 returned merchandise (damaged)

Explanation:

The credit terms of 2/10, n/30 means that if Hannah Company pays within ten days, they will get a 2% discount, or they have thirty days to pay the full receipt.

Hannah's check should be for:

($4,000 - $600) x 0.98% = $3,400 x 0.98% = $3,332  

Arter Company should record the following entries:

Cr Accounts receivable $4,000

Dr $3,332 Cash

Dr $68 Sales discount

Dr $600 returned merchandise (damaged)

6 0
3 years ago
In addition to contributing money to a candidate, which is limited to only $5,000, which way does a PAC contribute to campaign e
scoundrel [369]
The answer is B. Gift

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7 0
3 years ago
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Adham is interested to buy a pair of shoes, at Lazzado.com as follows:
nlexa [21]
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When does information become as liability for an organization
UkoKoshka [18]

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The following information pertains to Lap Co.'s Palo Division for the month of April: Number of Units Cost of Materials Beginnin
Free_Kalibri [48]

Answer:

$0.44

Explanation:

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4 0
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