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fiasKO [112]
3 years ago
9

Your great grandfather left you a trust will pay you an annual payment of $200 today but the annuity will grow at an annual rate

of 2% every year starting next year into perpetuity. Assume the interest rate is 6%, how much is this trust worth today?
Business
2 answers:
Serga [27]3 years ago
8 0

Answer:

$5000

Explanation:

The formular to be used is the growing perpetuity formula

PV= C/r-g

from the given information

PV=200/0.06-0.02

$5000

Mrac [35]3 years ago
4 0

Answer:

The annuity is worth $5,000 today

Explanation:

We solve using the growing perpetuity formula for present value:

Principal = \frac{C}{r - g} \\Where: \\$r = interest rate\\g = grow rate

r = 0.06

g = 0.02

C = $200

$200/(0.06-0.02) = 200/.04 = $5,000

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A household-products manufacturing firm was required to examine its organizational architecture in order to survive in the marke
noname [10]

Answer:

decision rights, rewards, and evaluation systems.

Explanation:

The aspects the decision firm looked into looked are decision rights, rewards, and evaluation systems.

1. Decision rights:

The person who makes all the relevant decisions should have all informations available. People with relevant information should be made to take key decisions. This would increase the possibility of the organization being in the right

direction.

2. Rewarding: this is rewarding those individuals who make the right decisions. Employees who have decision making rights should be rewarded with incentives when they make the right decisions.

3. Evaluation systems: These should be put in place to check the performance of individuals and business units.

3 0
3 years ago
____________ is a process of explaining the purposes and methods of the research after a study has been completed.
Colt1911 [192]
Debriefing is the process that is directed in mental research with human subjects after an investigation or study has been finished up. It includes an organized or semi organized meeting between the specialist and the subjects whereby all components of the investigation are talked about in detail.
5 0
4 years ago
WT Foods stock is selling for $38 a share. The 6-month $40 call on this stock is selling for $2.01 while the 6-month $40 put is
Daniel [21]

Answer:

2.1%

Explanation:

The computation of continuously compounded risk-free rate of return is shown below:-

Continuously compounded risk-free rate of return = -In(number)

= -ln((38 + 3.60 - 2.01) ÷ 40) ÷ (6 ÷ 12)

= 0.020605786

or

= 2.1%

For a better explanation, kindly find the spreadsheet as attached.

Hence we have applied the above formula to reach the continuously compounded risk-free rate of return.

7 0
3 years ago
Authors<br> d. p. rosenbaum and g. ganson concluded that the<br> d.a.r.e. program _________.
Pani-rosa [81]

Drug Abuse Resistance Education (D.A.R.E.) is a police officer-led  arrangement of classroom exercises that shows kids (normally in rudimentary or center school) how to remain tranquilize free and oppose peer weight.  

According to Rosenbaum and Hanson (1998), D.A.R.E has no critical in general effect on utilizing cigarettes or liquor  

They concluded that, Given the tremendous uses in time and cash required with D.A.R.E., no doubt proceeded with endeavors should center around different systems and projects that may deliver more significant impacts.

5 0
3 years ago
You bought a stock one year ago for $48.28 per share and sold it today for $55.92 per share. It paid a $1.38 per share dividend
Snezhnost [94]

Answer: 17.9%

Explanation:

From the question, a stock was bought one year ago for $48.28 per share and sold today for $55.92 per share and also paid a $1.38 per share dividend today.

The realized​ return will be calculated as:

Po = (P1 + D1) ÷ (1+Re)

48.28 = (55.92 + 1)/(1 + Re)

48.28 = 56.92/(1 + Re)

Cross multiply

48.28 + 48.28Re = 56.92

48.28Re = 56.92 - 48.28

48.28Re = 8.64

Re = 8.64/48.28

Re = 0.179 = 17.9%

4 0
4 years ago
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