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sergiy2304 [10]
4 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]4 years ago
3 0

Answer:

The best option is Option A.

Explanation:

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Disadvantages of opening a new store location
Ksenya-84 [330]
You might struggle through delayed profitability where the market maynot already be established , it might take a long time to come profitable 
7 0
3 years ago
When considering total depreciation recorded over the entire life span of an asset, the method resulting in the highest total de
Lady_Fox [76]

Answer: All three methods result in the same amount of total depreciation

Explanation:

Depreciation is when the value of an asset has been reduced because the asset has been used or due to wear and tear.

When considering total depreciation recorded over the entire life span of an asset, the method resulting in the highest total depreciation is the straight line method, the double declining balance method, and the activity method.

Therefore, option the answer will be that "all three methods result in the same amount of total depreciation". This is because the amount charged for depreciation can not exceed the cost involved and will be identical for the three methods

4 0
3 years ago
Lincoln Park Co. has a bond outstanding with a coupon rate of 5.73 percent and semiannual payments. The yield to maturity is 6.7
Natalija [7]

Answer:

Bond Price​= $1,774.05

Explanation:

Giving the following information:

Coupon rate= 0.0573/2= 0.02865

YTM= 0.067/2= 0.0335

The bond matures in 23 years.

Par value= $2,000

<u>To calculate the bond price, we need to use the following formula:</u>

Bond Price​= cupon*{[1 - (1+i)^-n] / i} + [face value/(1+i)^n]

Bond Price​= 57.3*{[(1 - (1.0335^-46)] / 0.0335} + [2,000/1.0335^46]

Bond Price​= 1,334.76 + 439.29

Bond Price​= $1,774.05

5 0
3 years ago
A company with a labor agreement under which union membership cannot be required as a condition of employment is considered a
frez [133]
A company with a labor agreement under which union membership cannot be required as a condition of employment is considered an open shop.
This means that the employees do not have to join a trade union in order to work there at this particular company. So regardless of the fact whether these workers are members of the union or not, they will be employed and paid equally.
7 0
3 years ago
If the money supply is $6,000, velocity is 5, and Real GDP is 10,000 units of output, then the price level is _____________. If
atroni [7]

Answer and Explanation:

The computation is shown below:

The Price level in the normal case

= Money supply ÷ Real GDP × Velocity

= $6,000 ÷ 10,000 units × $5

= $3

Now in the case when the money supply doubled i.e $12,000

So, the price level is

= Money supply ÷ Real GDP × Velocity

= $12,000 ÷ 10,000 units × $5

= $6

When the money supply doubles, the price level is also doubled that indicated the direct relationship between the price level and money supply

8 0
3 years ago
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