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antoniya [11.8K]
3 years ago
11

You have won the lottery. You will receive $5,500,000 today, and then receive 40 payments of $1,900,000. These payments will sta

rt one year from now and will be paid every six months. A representative from Greenleaf Investments has offered to purchase all the payments from you for $35 million. If the appropriate discount rate is an APR of 9 percent compounded daily, should you take the offer
Business
1 answer:
san4es73 [151]3 years ago
6 0

Answer:

no, you shouldn't take the offer because the present value of your prize is higher than $35 million.

Explanation:

we must first calculate the present value of the annuity in 6 months. The effective interest rate per year = (1 + 9%/365)³⁶⁵ - 1 = 1.094162145 - 1 = 0.094162145 = 9.4162145

the discount rate for every 6 months:

0.094162145 = (1 + r)² - 1

1.094162145 = (1 + r)²

√1.094162145 = √(1 + r)²

1.046022058 = 1 + r

r = 0.046022058 = 4.6%

now the present value of the annuity in 6 years = $1,900,000 x (annuity factor, 4.6%, 40 periods) = $1,900,000 x 18.14185 = $34,469,515

then we must find the present value = $34,469,515 / 1.046 = $32,953,647.23

the total value of your prize = $32,953,647.23 + $5,500,000 = $38,453,647.23

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Answer:

The correct answer is  - No,

Explanation:

The correct answer is  - No,

The answer is no because the broker brings a buyer who is ready to give 1005 cash offer which is against the legal agreement defined by the owner. owner state that he is only taking a 25% cash offer.

Therefore the owner wouldn't consider the broker and didn't due broker commission.

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3 years ago
In a manufacturing business, the ________ transforms finished goods into cash.
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Raw materials transform finished goods into cash.
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There is a great deal of behavior that falls into a gray zone that can be difficult to analyze, however outright bribery is clea
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C. Unethical and Illegal

Bribery is offering something such as money or power to do something unethical.

8 0
3 years ago
Read 2 more answers
Foster Industries manufactures 20,000 components per year. The manufacturing cost of the components was determined as follows: D
olasank [31]

Answer:

$25,000 increase

Explanation:

Cost of Manufacturing                                                           Amount

Direct Materials                                                                    $150,000.00

Direct Labor                                                                          $240,000.00

Inspecting products                            60,000 x 0.90              $54,000.00

Providing Power                       30,000 x 0.90                      $27,000.00

Providing Supervision           40000 x 0.60                              $24,000.00

Setting up Equipment                    60000 x 0.50              $30,000.00

Moving Materials                           20,000 x 0.50               $10,000.00

Total                                                                                    $535,000.00

Buying Cost                                  (20000 x 25.50)             $510,000.00

Incremental Saving by Purchase ( $535000-$510000)      $25,000.00

3 0
3 years ago
A foreign company has offered to buy 75 units for a reduced sales price of $320 per unit. The marketing manager says the sale wi
belka [17]

Answer:

an increase in the operating income by $16,322

Explanation:

The computation of the impact in the operating income is given below:

Variable cost of 75 units (1300000 × 75 ÷ 12700)   7,678

Sale price of 75 units (75 × 320)  24,000

Increase in operating income (24000 - 7678)   $16,322

hence, the impact in the operating income is that there is an increase in the operating income by $16,322

4 0
3 years ago
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