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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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Planning is often called the primary management function because​ _____________.
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Planning is often called the primary management function because,

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4 0
3 years ago
Most economists believe that prices are:
BaLLatris [955]

Answer: Most economist believe that prices are flexible in the long run but many are sticky in the short run.

Explanation:

Prices are sticky in the short run because producers and buyers take time to adapt to new situations. If there is a shortage of butter, lets say, the economic theory says that the prices will rise because there is less butter ( ceteris paribus = all the other factors remain constant). Actually, buyers and suppliers need time to adapt to the new situation. However, in the long run buyers and suppliers have time to adapt to new situations so prices become more flexible.

8 0
3 years ago
Great Western Southern purchased $525,000 of equipment four years ago. The equipment is seven-year MACRS property. The firm is s
tester [92]

Answer: $153,782.70

Explanation:

The MACRS allowance percentages are as follows, commencing with Year 1: 14.29, 24.49, 17.49, 12.49, 8.93, 8.92, 8.93, and 4.46 percent.

In 4 years, the depreciation would be:

= Cost price * (4 year deprecation)

= 525,000 * (14.29% + 24.49% + 17.49% + 12.49%)

= $360,990

Book value :

= 525,000 - 360,990

= $164,010

Gain (loss) = Sale price - Book value

= 150,000 - 164,010

= ($14,010)

Tax payable = (14,010) * 27%

= ($3,782.70)

After-tax cash flow:

= Selling price - Taxes

= 150,000 - (-3,782.70)

= $153,782.70

<em>Note: If there are options, beware of rounding errors and pick nearest option. </em>

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3 years ago
Outline the initiatives that Woolworths use to lessen their impact on the environment​
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we're committed to lowering the quantity of waste we send to landfill, recycling what we will and the usage of recyclable materials wherein we can. a number of THE ways we are RECYCLING TO reduce WASTE: RECYCLED PLASTIC: the whole lot in our shops from trolleys to signage is made from recycled substances.

1. ENERGY

We want to lessen the negative affects of weather exchange. That’s why we’ve made a commitment to the usage of power efficiently and decreasing our carbon footprint.

HERE'S HOW WE'RE SAVING ENERGY

AT OUR STORES: every time we design a new store, we have a look at the way to encompass strength-saving elements and solar energy. This has resulted in extra than 40% reduction in energy utilization in SA shops, with over 100 inexperienced stores designed.

2. WATER

We want to ensure future generations will still be able to enjoy clean, fresh water. That's why we’re actively working to use water responsibly   – in our own operations and those of our suppliers.

HERE'S HOW WE'RE SAVING WATER:

AT OUR HEAD OFFICE: We treat and use underground water, saving the local municipality over 14.5 million litres of water every year.

FARMING FOR THE FUTURE: We’re helping farmers reduce water wastage and water pollution through our Farming for the Future initiative.

Learn more about RECYCLING brainly.com/question/11861824

#SPJ9

5 0
1 year ago
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