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liraira [26]
3 years ago
8

Problem 5-35 Comparing Cash Flow Streams [LO 1] You’ve just joined the investment banking firm of Dewey, Cheatum, and Howe. They

’ve offered you two different salary arrangements. You can have $8,200 per month for the next two years, or you can have $6,900 per month for the next two years, along with a $37,000 signing bonus today. Assume the interest rate is 6 percent compounded monthly. Requirement 1: If you take the first option, $8,200 per month for two years, what is the present value? (Enter rounded answer as directed, but do not use rounded numbers in intermediate calculations. Round your answer to 2 decimal places (e.g., 32.16).) Present value $ 139912.93 Requirement 2: What is the present value of the second option?
Business
1 answer:
Minchanka [31]3 years ago
7 0

Answer:

PV of 1st option = $185,015.50

PV of 2nd option = $192,683.78

Explanation:

Computing the present value of the monthly payments, we use the formula PV = \frac{A(1-(1+r)^{-n}) }{r}

Where PV = present value of the monthly payments

A = monthly salary

r = monthly interest rate = 6%/12 = 0.5% = 0.005

n = number of months = 24 months

PV of the 1st option, $8,200 monthly for the next 2 year

PV = \frac{8,200(1-(1.005)^{-24}) }{0.005} = $185,015.50.

PV of the 2ns option, $6,900 monthly + $37,000 signing bonus

PV = \frac{6,900(1-(1.005)^{-24}) }{0.005}+37,000 = $155,683.78 + $37,000 = $192,683.78.

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3 years ago
A(n) ____ is the transfer of the control of operations and management from one firm to another with the former becoming a unit o
olya-2409 [2.1K]

Answer:

acquisition

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Explanation:

Acquisition is when a company purchases almost all the shares of another company in order to have full control over it. For companies that are distressed or are not able to operate as a going concern, such can put up the company for sale.

In acquisition, the buying company oftentimes retain its name which is already a brand , work and build on the strength of the old company in order to achieve returns. Companies acquire other companies in order to have large market shares and also to diversify their business operation.

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4 0
3 years ago
Which of the following factors will increase GDP and also achieve sustained​ growth?
Salsk061 [2.6K]

Answer:

The correct answer is the letter d. Advances in the technical knowledge used in production.

Explanation:

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7 0
3 years ago
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Jobisdone [24]

Answer:

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lutik1710 [3]

Answer:

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Explanation:

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Equity Multiplier or P/E ratio=Market value per share/Earning per share.

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