Answer and Explanation:
The computation of the present values of both alternatives is shown below:
For alternative one, the lump sum amount is
= Yearly payment × PVIFA factor at 8% for 12 years
= $50,000 × 7.5361
= $376,805
And, in the alternative 2, the lumpsum amount i.e. present value is $452,000
So as we can see that the alternative 2 is better as the lumspsum amount is high as compared with the alternative 1
Answer:
$137,200; $103,600
Explanation:
In 2015:
Free cash flow:
= Net cash flow from operating activity - Capital expenditure
= $294,000 - (70% × $224,000)
= $294,000 - $156,800
= $137,200
In 2016:
Free cash flow:
= Net cash flow from operating activity - Capital expenditure
= $280,000 - (70% × $252,000)
= $280,000 - $176,400
= $103,600
Surplus hope it helps since you did not put any choices ......
Answer:
0.0642 or 6.42%
Explanation:
The period 't' between the year when the coin was issued, 1794, and 1971 is:
If the coin had a value of $5 and after a period of t=177 years it was worth $305,000, the annual tax rate by which the coin appreciated is determined by:
![305,000 = 5*(1+r)^{177}\\r=\sqrt[177]{61,000}-1\\r=0.0642=6.42\%](https://tex.z-dn.net/?f=305%2C000%20%3D%205%2A%281%2Br%29%5E%7B177%7D%5C%5Cr%3D%5Csqrt%5B177%5D%7B61%2C000%7D-1%5C%5Cr%3D0.0642%3D6.42%5C%25)
The annual rate was 0.0642 or 6.42%.
