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sergiy2304 [10]
3 years ago
6

Assume that your grandmother wants to give you generous gift. She wants you to choose which one of the following sets of cash fl

ows you would like to receive: Option A: Receive a one-time gift of $ 10,000 today. Option B: Receive a $1400 gift each year for the next 10 years. The first $1400 would be received 1 year from today. Option C: Receive a one-time gift of $17,000 10 years from today. Compute the Present Value of each of these options if you expect the interest rate to be 3% annually for the next 10 years. Which of these options does financial theory suggest you should choose?
Business
1 answer:
Finger [1]3 years ago
3 0

Answer:

The best option is Option A.

Explanation:

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Jordan has the following assets and liabilities:-Two Cars $10,000-House $200,000-Mortgage $100,000-Cash $1,000-Car Loans $3,000-
Ilia_Sergeevich [38]

Answer:

The correct option is B. $109,000; $213,000; $104,000

Explanation:

For computing the wealth, first, we have to compute the assets and liabilities value

So, the assets = Cars + House + cash + checking account balance

                 = $10,000 + $200,000 + $1,000 + $2,000

                 = $213,000

So, the liabilities = Mortgage + car loans + credit card balance

                     = $100,000 + $3,000 + $1,000

                     = $104,000

we apply the accounting equation which equals to

Assets = Liabilities + shareholder equity

And, the wealth equal to

= Assets - Liabilities

= $213,000 - $104,000

= $109,000

Hence, Jordan's wealth is $109,000, the value of Jordan's assets is $213,000, and the value of Jordan's liability is $104,000.

Therefore, the correct option is B. $109,000; $213,000; $104,000

3 0
2 years ago
Shawna wins the lottery and her income increases by 60 percent. she used to buy 10 pints of cottage cheese per month and now she
Dmitriy789 [7]

Answer: Her income elasticity of demand for cottage cheese is <em><u>0.3333</u></em> making it a <em><u>normal and necessary</u></em> good.

The income elasticity  of demand is given by :

\mathbf{YED = \frac{percentage change in demand}{percentage change in income}}

The percentage change in income is given as 60%. We calculate the percentage change in quantity demanded as follows:

\mathbf{percentage change in quantity demanded = \frac{Q_{1}-Q_{0}}{Q_{0}}}

\mathbf{percentage change in quantity demanded = \frac{12-10}{10}}

\mathbf{percentage change in quantity demanded = 0.2}\\

Substituting the value above in the income elasticity demand formula we get,

\mathbf{YED = \frac{0.20}{0.60}}

<u>YED = 0.33333</u>

Since the income elasticity is positive, and since Shawna buys more cottage cheese after an increase in income, we can classify this good as a normal good.

Since the income elasticity is between 0 and 1 we can also conclude that cottage cheese is also a essential good or a necessity.

7 0
3 years ago
Janice developed a media plan for a client that recommended 10 commercials in a television program that delivered 4 million targ
Kisachek [45]

Answer:

49 million impressions

Explanation:

In media gross impressions are defined as the total number of people that represented in a media schedule. When a media campaign is launched unique impressions are counted to make up gross impression.

For example on digital marketing a visit from a customer is counted as one impression by cookies. Once a new user logs in a new impression is created.

In this instance for the television program total number of impressions for one advert can be calculated as

Impression = Average persons * Number of spots (commercials)

Impression= 4 million persons * 10

Impression = 40 million

For the magazine it aims to target 3 million people with 3 full page adverts

Impression = 3million * 3

Impression = 9 million

Therefore total impression of the campaign

Gross impression= 40 million + 9 million

Gross impression= 49 million

5 0
3 years ago
Consider the economy of Arcadia. Its households spend 75% of increases in their income. There are no taxes and no foreign trade.
Varvara68 [4.7K]

Answer:

Consider the economy of Arcadia. Its households spend 75% of increases in their income. There are no taxes and no foreign trade. Its currency is the are. Potential output Is 600 billion arcs (Scenario: Fiscal Policy) Look at the scenario Fiscal Policy. If actual output Is 500 billion arcs, to restore the economy to potential output government should by 25 billion arcs.

increase taxes

Explanation:

8 0
3 years ago
Margaret Lindley paid $15,040 of interest on her $300,400 acquisition debt for her home (fair market value of $500,400), $4,040
Brums [2.3K]

Answer:

$23,160

Explanation:

The Total interest = 15,040 + 4040 + 1040 + 3040

Total interest = $23,160

Hence, the Interest deductable this year = $23,160

6 0
2 years ago
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