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liraira [26]
4 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]4 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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Carol Byrd gets a student rate of $30.00 a month. There is a $250 deductible; but no coinsurance payment. She recently received
Elden [556K]

Answer: Company Pays $1640

Carol Bryd pays $410

Explanation:

The total bill is $2300 and the deductible needs to be taken out.

$2300-$250

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Company Payment.

Company Pays 80% which translates to 0.8

0.8*2050

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Carol then pays the difference which is

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Carol pays $410

6 0
3 years ago
Below is the complete list of accounts of Sooner Company and the related balance at the end of April. All accounts have their no
allochka39001 [22]

Answer:

                                           Trial Balance

                                                     <u>Debit</u>               <u>Credit</u>

Land                                             53000

Accounts Receivable                  5400

Cash                                              3200

Prepaid Rent                                6700

Accounts Payable                                                 3600

Deferred revenue                                                  1950

Common Stock                                                      33000

Retained earnings                                                 21250

Service Revenue                                                   24700

Salaries expense                          7500

Supplies expense                       <u>  8700  </u>            <u>              </u>

Totals                                            84500               84500                    

Explanation:

The trial balance has been made in the answer section.

3 0
3 years ago
In preparing a bank reconciliation, the amount of an error indicating the recording of a check in the journal for an amount larg
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The statement is true.

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For example, if the check amount was 500 but the company recorded it as $550. Then means that the company records show $50 less compared to the bank statement. Therefore, that $50 is added back and then it comes equal to the bank statement balance.

When a note is written to settle open account an entry that converts the accounts receivable account to a note receivable account is required. This entry is required because when the note is written to settle accounts the company has to receive notes in the future and the amount of the account.

<em>Your question is incomplete. Please read below to find the missing content.</em>

In preparing a bank reconciliation, the amount of an error indicating the recording of a check in the journal for an amount larger than the amount of the check is added to the balance per company's records.

TRUE

FALSE

Learn more about balance here: brainly.com/question/1115815

#SPJ4

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Answer:

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