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iris [78.8K]
3 years ago
15

Peter Lynchpin wants to sell you an investment contract that pays equal $22,500 amounts at the end of each of the next 20 years.

If you require an effective annual return of 8 percent on this investment, how much will you pay for the contract today?
Business
1 answer:
Effectus [21]3 years ago
7 0

Answer:

The amount to be paid for the contract today = $220,908.32

Explanation:

<em>The amount to be paid for the contract today will be equal to the present value of the annuity of $22,500 payable for 20 years discounted at a rate of 8% per annum.</em>

Present Value = A ×( 1 - (1+r)^(-n))/r

A- 22,500, r- rate of return - 8%, n -no of years 20 years

PV = 22,500 ×( 1-(1.08)^(-20) )/ 0.08

PV = 22,500 ×9.8181

PV = $220,908.32

The amount to be paid for the contract today = $220,908.32

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Thomas purchased 200 shares of stock A for ​$23 a share and sold them more than a year later for $ 19 per share. Be purchased 60
Delicious77 [7]

Answer:

Capital gain tax = $1,540.

Explanation:

As per the data given in the question,

For stocks of A  

Profit = (selling price - purchasing price) × units

= ($19 - $23) × 200

= -$800

For stocks of B  

Profit = ($57-$41) × 600

= $9,600

Total profit = profit for stock A + profit for stock B  

= -$800 + $9,600

= $8,800

Therefore, capital gain for both year = $8,800

Tax rate = 35%

Capital gain tax = Capital gain × Tax rate

= $8,800 × 35%

=$3,080

As share holds for more than a year,

So, Capital gain tax = $3,080 ÷ 2 = $1,540.

5 0
3 years ago
Jacob Corcoran bought 10,000 shares of Grebe Corporation stock two years ago for $24,000. Last year, Jacob received a nontaxable
dezoksy [38]

Answer:

Jacob purchased 10000 shares form Grebe corporation two years ago for $24000

last year Jacob received a non taxable stock dividend of 2000 shares from Grebe corporation

In the current year tax year Jacob sold all stock received as dividend that's 2000 shares for $18000

The gain of the sale of 2000 shares can be calculated by subtracting the basis in the shares from the cost price. the cost of shares = ( $24000 / 12000 ) = $2 per share

profit made from the sales of 2000 shares is calculated as follows ; selling price ( $18000 ) - cost price of 2000 shares ( $2 * 2000) , the profit is $14000 and it is in the long term because the original shares bought has been held for at least 1 year

Explanation:

Jacob purchased 10000 shares form Grebe corporation two years ago for $24000

last year Jacob received a non taxable stock dividend of 2000 shares from Grebe corporation

In the current year tax year Jacob sold all stock received as dividend that's 2000 shares for $18000

The gain of the sale of 2000 shares can be calculated by subtracting the basis in the shares from the cost price. the cost of shares = ( $24000 / 12000 ) = $2 per share

profit made from the sales of 2000 shares is calculated as follows ; selling price ( $18000 ) - cost price of 2000 shares ( $2 * 2000) , the profit is $14000 and it is in the long term because the original shares bought has been held for at least 1 year

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3 years ago
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uysha [10]

Answer: ROCE was 13.7% in 2012

Explanation:

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3 years ago
What is NOT affected by decisions of the federal Open Market Committee?
natka813 [3]

I believe the answer is: D. bond prices


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5 0
3 years ago
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Which of the following are characteristics of productive conflicts
ioda

Answer:

using I-language, focusing on issues and critically evaluating ideas

Explanation:

"Productive conflict" refers to giving both parties who have varying opinions a chance to speak their arguments or positions. The goal of this is for both parties to arrive at a resolution<em> in the most graceful way as possible.</em>

Using "I-language" allows the person to be heard without asserting aggressiveness. It doesn't lead to defensiveness, thereby reducing the other side from retaliating.

"Focusing on issues" allows the focus to be centered on what matters the most. This allows both parties to concentrate and deal with the issue properly.

"Critically evaluating ideas" allows each party to come up with a reasoned judgement and analyze the opinion of the other person. <u>Both positive and negative side</u> should be addressed in order for the conflict to be productive.

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