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IrinaVladis [17]
3 years ago
12

Suppose you have a winning lottery ticket and you are given the option of accepting $3,000,000 three years from now or taking th

e present value of the $3,000,000 now. The sponsor of the prize uses a 6% discount rate. If you elect to receive the present value of the prize now, the amount you will receive is:
Business
1 answer:
Minchanka [31]3 years ago
7 0

Answer:

The amount that will be received today is $2518857.85

Explanation:

To calculate the amount that will be received today, we need to discount the amount that will be received three years from now for a period of 3 years using the given discount rate. As there is only a single cash flow, we will use the formula for present value of principal.

The present value of principal is,

Present value = Cash flow / (1+d)^t

Where,

  • Cash flow is the amount for which we have to found the present value
  • d is the discount rate
  • t is the time in terms of number of periods
  • Here the t is in years and the number of periods is 3 years

Present value = 3000000 / (1+0.06)^3

Present value = 2518857.849 rounded off to $2518857.85

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the marginal revenue product of baseball players is greater than the marginal revenue product of college professors.

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Baseball players are responsible for a baseball teams' revenues, and they add up billions of dollars per year. For example, Max Scherzer sells jerseys, caps and other merchandise for millions of dollars, and his team winning the World Series this year increases the team's revenue greatly. Sometimes even without winning a championship some players still generate lots of revenue.

An individual's salary should be proportional to the revenue that they generate. Colleges have huge amounts of revenue, and college professors are responsible for a large portion of it.

The problem hear is that there are a lot of college professors and assistants, and the revenue must be split between many people. For example, Harvard University's revenue is about $5.5 billion per year, but it has over 16,000 employees (including about 2,400 professors).

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3 years ago
"New York City is issuing $500,000,000 of general obligation bonds paying interest on January 1st and July 1st of each year unti
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Answer:

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The interest is to be paid semi-annually which means that it accrues for 6 months. However, the bond was issued on May 1, 2020 which is 8 months before the first interest payment on January 1, 2021 so the January payment will have to cover for those months as interest starts to build immediately the bond is purchased.

The second payment on July 1, 2021 will cover the period of 6 months between January 1 and July 1, 2021.

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The Retained earnings account has a credit balance of $23,800 before closing entries are made. Of total revenues for the period
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The ending balance in the retained earnings account is $31400.

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