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dimaraw [331]
3 years ago
12

A friend of Mr. Richards recently won a law suit for $30 million. They have the ability to either take the payments over 10 year

s or settle today for cash of $25 million today. Mr. Richard is optimistic that he can earn a 6% return on the money and that they should settle for $25 million today and he will invest it for them.
a. You'll will need to demonstrate the present value of the $30 million today versus the future value of the $25 million in 5 years to make your argument.

b. Briefly describe which settlement is maximizing the value for the client and explain why?
Business
1 answer:
denis23 [38]3 years ago
5 0

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

A friend of Mr. Richards recently won a law suit for $30 million. They can either take the payments over 10 years or settle today for cash of $25 million. Mr. Richard is optimistic that he can earn a 6% return on the money and that they should settle for $25 million today and he will invest it for them.

First, we need to find the present value of the 30 million.

To do that we need to calculate the final value.

FV= {A*[(1+i)^n-1]}/i

A= annual deposit

FV= {3,000,000*[(1.06^10)-1]}/0.06= 39,542,385

PV= FV/(1+i)^n= 39,542,385/1.06^10= 22,080,261

B) Now we know that the present value of option B is higher. One dollar today is better than one dollar tomorrow. It is better to receive the money now to invest it.

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Panda Company is owned equally by Min, her husband, Bin, her sister Xiao, and her grandson, Han, each of whom hold 100 shares in
otez555 [7]

Answer:

300 shares

Explanation:

Based on Family attribution rules the rules often requires that the family attribution should occur between parents, their children and grandchildren, regardless of their age.

But based on the information given in which Panda Company is owned equally by Min, her husband, Bin, her sister Xiao, and her grandson, Han in which each of them hold 100 shares in the company which means Under the family attribution rules we would excludes Min sister Xiao from the shares.

Hence, the shares of Panda stock that Min is deemed to own will be:

Min +husband Bin + her grandson Han =3 individual

100 shares ×3=300 shares

Therefore Under the family attribution rules, 300 shares of Panda stock is what Min is deemed to own

7 0
3 years ago
Before government approves a merger, companies must prove that the merger would
Jlenok [28]
I think the correct answer from the choices listed above is option D. Before government approves a merger, companies must prove that the merger would lower the number of competitors in the market. Hope this answers the question. Have a nice day.
7 0
3 years ago
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(c)
Allisa [31]

Answer:

The reasons are 1. Increase the wages, 2. More variety or substitute's along with increase more jobs skilled and unskilled

Explanation:

1. Increase the wages- As it will lead to better living standard

2. More variety or substitute's along with increase more jobs skilled and unskilled

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A perfectly competitive firm will be willing to produce even at a loss in the short run, as long as?
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A perfectly competitive firm will be willing to produce even at a loss in the short run, as long as the loss is no greater than its total variable costs.

Variable costs are expenses that vary in proportion to the volume of goods or services that a business produces. A variable cost is an ongoing cost that changes in value according to factors like sales revenue and output. Variable costs include labor, raw materials, etc.

Variable costs are costs that change as the volume changes. Examples of variable costs are raw materials, piece-rate labor, production supplies, commissions, delivery costs, packaging supplies, and credit card fees.

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6 0
1 year ago
The current yield is defined as the annual interest on a bond divided by the: Multiple Choice coupon rate. face value. market pr
kherson [118]

Answer:

The current yield is defined as the annual interest on a bond divided by the: market price

<h3><u>Explanation:</u></h3>

When investors acquire bonds, they do so essentially to produce income. The demanded annual rate of return is summoned as the current yield, and it is a gathering of the prevailing price and the amount of interest the bond meets.

current yield is a crucial measure because it determines the rate of return on your expense for as longspun as you hold the bond. The current yield is equivalent to the annual interest gained divided by the current price of the bond.

6 0
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