Answer:
£718,607
Explanation:
Annuities are investment opportunities that require an initial settlement and gives a series of returns of a fixed amount for a specific number of periods.
In simple terms, the question requires us to calculate the amount to be paid today (Present Value) of an annuity that pays £80,000 per year for the next 10 years.
To establish the [Present Value of the Annuity, the future Cash Flows must be discounted to the Present Value using the appropriate discount rate. In our case, we will use the annual effective interest rate of 2%.
Present Value = PMT × [ 1 - 1/(1+r)^n ÷ r ]
Where,
PMT = £80,000
n = 10
r = 2%
Therefore,
Present Value = £80,000 × [ 1 - 1 / (1.02) ^ 10 ÷ 0.02]
= £718,606.80 or £718,607
Conclusion :
She be willing to pay £718,607 today for the annuity.
To calculate marginal cost, divide the change in production costs by the change in quantity. The purpose of analyzing marginal cost is to determine at what point an organization can achieve economies of scale to optimize production and overall operations.
<h3>What is
marginal cost?</h3>
The marginal cost in economics is the change in total cost that occurs when the quantity produced is increased, or the cost of producing additional quantity.
According to the law of declining marginal utility, as consumption increases, the marginal utility obtained from each extra unit decreases.
Marginal cost is an important concept in economic theory because a corporation seeking to maximise profits will produce until marginal cost (MC) equals marginal revenue (MR) (MR). After then, the cost of creating an additional item will outweigh the money generated.
To know more about marginal cost follow the link:
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Multiplier = 1 / Reserve Ratio.
Multiplier = 1 / 0.02 (2%)
Multiplier = 50.
Answer:
The total cost of the department’s ending work in process inventory is $684,000
Explanation:
The computation of the total cost is shown below:
= Material cost + conversion cost
where,
Material cost = (Transferred units + ending work in progress) × material cost per unit
= (68,000 units + 12,000 units) × $4
= $320,000
Conversion cost = (Transferred units + ending work in progress × percentage of completion) × material cost per unit
= (68,000 units + 12,000 units × 40%) × $5
= $364,000
Now put these values to the above formula
So, the value would equal to
= $32,000 + $364,000
= $684,000
