1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
kow [346]
3 years ago
11

You are offered an annuity that will pay you $200,000 per year, at the end of the year, for 25 years. The first payment will arr

ive one year from now. The last payment will arrive 25 years from now. Suppose your annual discount rate is i=16.25%. How much are you willing to pay for this annuity? (hint: this is the same as the present value of an annuity.)
Business
1 answer:
maksim [4K]3 years ago
7 0

Answer:

I am willing to pay $1,202,235.89 for this annuity.

Explanation:

Calculate Present value of future cash flow to calculate the price for the annuity should be paid now.

Monthly receipt = PMT = $200,000

Number of years = n = 25 years

Rate of return = r = 16.25% = 0.1625

PV = PMT x [ 1- ( 1 + r )^-n )] / r

PV = $200,000 x [ 1 - ( 1 + 0.1625 )^-25 ) ] / 0.1625

PV = $200,000 x [ 1 - ( 1.1625 )^-25 )] / 0.1625

PV = $1,202,235.89

You might be interested in
While Sony and Microsoft focused on the graphics and raw processing power favored by hard-core male gamers, Nintendo chose to de
nirvana33 [79]

Answer:

While Sony and Microsoft focused on the graphics and raw processing power favored by hard-core male gamers, Nintendo chose to develop a machine to appeal to families, women, and age groups that normally shunned violent games.

The strategy adopted by Nintendo in this example is the _____ strategy.

C) blue ocean

Explanation:

Blue ocean is a strategy that says innovation, simultaneous pursuit, and low cost are key concepts to achieve a successful business and establish an advantage in the market. It is a very proactive system that allows the constant improvement, elimination, reduction, and creation of corporate actions. It is a global and general perspective that allows the management team to know the state of the company at any time.

4 0
2 years ago
Sheridan Company issued $6,500,000 of 6%, 10-year bonds for $5,614,000. The straight line method of amortization is to be used.
Mrac [35]

Answer:

The solution of the given query is explained throughout the segment below.

Explanation:

The given values are:

Company issued amount,

= $6,500,000

Rate of interest,

= 6%

Time,

= 10 years

Now,

On bonds payable amortization, the discount will be:

= \frac{6,500,000 -5,614,000}{10}

= \frac{886,000}{10}

= 88,600 ($)

Interest expenses will be:

= (6,500,000\times 6 \ percent) + 88,600

= 390,000+88,600

= 478,600 ($)

5 0
3 years ago
When the economy is producing the level of output equal to natural Real GDP, the unemployment rate is equal to :A. zero. B. the
VLD [36.1K]

Answer:

B. the natural unemployment rate.

Explanation:

When the level of output is equal to natural real GDP, it indicates that the country has reach a very optimal level of production has efficiently utilize all resources that it has in its disposal. These 'Resources' include both human , capital, and natural resources.

Natural employment rate is the amount of employment rate that occurs after a country has fully utilize its resources.  Like mentioned above,  This situation will arise when the level of  of output equal to natural Real GDP

Since there is little to no human resources left unused which make natural unemployment rate basically equal to the total employment rate that exist in that country.

7 0
3 years ago
What type of résumé presents the job seeker's characteristics and experience in terms that accommodate the computer search proce
Reil [10]
The correct answer is keyword resume.
Here, you would use keywords to refer to your characteristics and experience, so that the computer can search the document according to the specific requirements the employer needs - so if no such requirements are met by your resume, you may not get the job.
3 0
3 years ago
The blurring of the lines separating the subsets of the financial industry started in the 1970s. 1990s. 1960s. 1940s.
telo118 [61]
The blurring of the lines separating the subsets of the financial industry started in the <span>1990s. The blurring of the lines that separate the subsets of the financial industry was initiated in the 1990s under the regime of the president of the US, Bill Clinton. At the time, the financial products were mainly loans, payment services, deposits, savings, and fiduciary services. </span>
5 0
3 years ago
Other questions:
  • Alyssa's monthly mortgage costs are lower than those of her neighbor, Steven. Steven doesn't understand how this is possible bec
    9·2 answers
  • A company sells a plant asset that originally cost $180,000 for $60,000 on December 31, 2007. The accumulated depreciation accou
    15·1 answer
  • Several years ago the Haverford Company sold a $1,000 par value bond that now has 25 years to maturity and an 8.00% annual coupo
    8·1 answer
  • A restaurant bill is made up of the following: $12.50 for starters, $28.55 for main courses, and $8.95 for deserts, plus a 15% s
    9·1 answer
  • Material delays have routinely limited production of household sinks to 400 units per day. If the plant efficiency is 80%, what
    12·1 answer
  • What's wrong with this slide?
    6·1 answer
  • You work part time in a telemarketing company. Your compensation is based on the number of credit card applicants you sign up. T
    7·1 answer
  • Pearl Products Limited of Shenzhen, China, manufactures and distributes toys throughout South East Asia. Three cubic centimeters
    15·1 answer
  • In the current year, Tanager Corporation (a calendar year C corporation) had operating income of $480,000 and operating expenses
    7·1 answer
  • Being aware of your expectations is an example of a. For introducing mindfulness to young children
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!