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marysya [2.9K]
3 years ago
9

After hearing a knock at your front door, you are surprised to see the Prize Patrol from your state’s online lottery agency. Upo

n opening your door, you learn you have won the lottery of $22.1 million. You discover that you have three options: (1) you can receive $2.21 million per year for the next 12 years, (2) you can have $19.5 million today, or (3) you can have $5.4 million today and receive $1.70 million for each of the next 10 years. Your lawyer tells you that it is reasonable to expect to earn an annual return of 10% on investments.
Required:
What is the present value of the above options?
Business
1 answer:
Helga [31]3 years ago
5 0

Answer:

Option 2 is best option on the basis of present value analysis of all the options available.

Explanation:

Option 1  NPV = ($2.21 Annual Inflow * 6.814 Annuity Factor 12 year @10%)  = $15.06m

Option 2 NPV = $19.5m

Option 3 NPV = $5.4m + ($1.7m Annual Inflow * 6.145 Annuity Factor for next 10 years @10%) = $15.85m

From the above options the best option available is option 2 which is worth more in todays prices than other options available.

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Carter Co. sells two products, Arks and Bins. Last year Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data
Oliga [24]

Answer:

Carter Co.'s break-even point in units was 40000 units.

Explanation:

Total units sold = 14000 + 56000

                          = 70000

Weight of ark = 14000/70000

                      = 0.20  

weight of bins = 1 -0.20

                        = 0.80

weighted average contribution = (40 *0.20 ) + (20 *0.80 )  

                                                    = 8+ 16  

                                                    = $ 24 per unit

Break Even Point (Units) = Fixed cost /weighted average contribution

                   = 960,000 / 24  

                   = 40000 units

Therefore, Carter Co.'s break-even point in units was 40000 units.

3 0
3 years ago
In the Month of March, Chester Corporation received orders of 154 units at a price of $15.00 for their product Clack. Chester us
julsineya [31]

Answer:

March revenue:

102 units x 15 dollar each = 1,530

April revenue

51 units x 15 dollars each =   765

Explanation:

We recognize based on the delivery of the goods which is the point at which the trasnfer of ownership occurs. Once the good are delvierired; the customer is the owner of them and can use them as see fit, is responsabile for their condition and wellbeing.

8 0
3 years ago
What is a possible use for a genetic fingerprint? i. to identify is someone was present at a crime scene. ii. to identify if two
brilliants [131]

What is a possible use for a genetic fingerprint is: i. to identify if someone was present at a crime scene.

<h3>What is  genetic fingerprint?</h3>

Genetic fingerprint can be defined as a fingerprint that help to detect the deoxyribonucleic acid (DNA)  traits or feature a person inherit.

Most crime investigator tend to make use of Genetic fingerprint when investigation a crime scene event so as to detect and identify the person who committed the crime through the use of genetic fingerprint they found in the crime scene.

Therefore What is a possible use for a genetic fingerprint is: i. to identify if someone was present at a crime scene.

Learn more about Genetic fingerprint here:brainly.com/question/27762372

#SPJ1

6 0
2 years ago
At its date of​ incorporation, McCarty Company issued​ 100,000 shares of its​ $10 par common stock at​ $11 per share. During the
Paul [167]

Answer:

(C) Decrease No effect

Explanation:

at purchase:

30,000 shares x 16 dollars each:

Treasury stock  480,000 debit

              Cash              480,000 credit

--purchase of own share--

Then we will decrease retained earnings for the difference in the cash proceed on the sale and our treasury stock.

30,000 x 12 dollars = 360,000 cash proceeds

treasury stock             480,000

decrease in RE            120,000

cash                         360,000 debit

retained earnings    120,000 debit

        Treasury Stock                      480,000 credit

8 0
3 years ago
Company J must choose between two alternate business expenditures. Expenditure 1 would require a $80,000 cash outlay and Expendi
Tanya [424]

Answer:

A. 25%

B. 50%

C. 48000 after tax cash flow

Explanation:

a. lets assume marginal tax rate is X%

After tax cash flow of 80000 should equal to 60000$

$80000 - [$80000*X%] = 60000$

80000*X% = 80000-60000

80000*X% =20000

X = 20000/80000

= 25%

b.

$80000 - [$80000*50%*x%] = 60000$

40000*x%=20000

x%=50%

c.

$80000- [$80000*x] = 60000 - [60000*50%*x]

80000-60000 = [80000*x] - [30000*x]

20000 = 50000x

x=40%

check

80000-40% =48000 after tax cash flow

60000*50%

=60000- [60000*50%*40%]

=48000 after tax cash flow

6 0
2 years ago
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