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antoniya [11.8K]
3 years ago
7

Given a 7 percent interest rate, compute the present value of payments made in years 1, 2, 3, and 4 of $1,350, $1,550, $1,550, a

nd $1,850, respectively. (Do not round intermediate calculations and round your final answer to 2 decimal places.)
Business
1 answer:
igor_vitrenko [27]3 years ago
6 0

Answer:

The present value of cash flows is $ 5,292.13  

Explanation:

The present value is today's equivalence of the company's future cash flow discounted using the 7% interest rate as a discount rate.

Formula for pv of a cash flow=cash flow/(1+r)^n

r is the 7% interest rate

n is the relevant year each cash flow relates to

PV=$1,350/(1+7%)^1+$1550/(1+7%)^2+$1550/(1+7%)^3+$1850/(1+7%)^4=

$ 5,292.13  

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Warren Cassell, owner of Just Books, a very small book store, makes special orders for customers at no extra charge, provides fr
Anna007 [38]

Answer:

Cassell is relying on Guerrilla Marketing strategy in this case.

Explanation:

Guerrilla Marketing:

It is a such type of marketing strategy in which we use non-traditional ways to accomplish our marketing goals. This unconventional way of marketing is directed towards developing an emotional between a business/organization and its customer.

Example:

The common example of guerrilla marketing is as follow:

A company named "XYZ" sells soft drink and they start a campaign in a public space in which they offer free drinks to the public. The people taste their soft drink for free and tell others about it.  

In our case, Warren Cassell use this strategy of marketing by offering them free gift-wrapping, free autographed copies of books etc so that the customer develop a very strong emotional bond with the book store. As a result, they will tell other people about her generosity and will help her to expand her business.    

5 0
3 years ago
Read 2 more answers
Select the correct answer.
natulia [17]
E
9 + 6 =15
8 0
3 years ago
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Part E14 is used by M Corporation to make one of its products. A total of 19,000 units of this part are produced and used every
Gennadij [26K]

Answer: ($24100)

Explanation:

The annual financial advantage (disadvantage) for the company goes thus:

The relevant cost to produce will be:

= ($4.10 × 19,000) + ($8.70 × 19,000) + ($9.20 × 19,000) + ($4.60 × 19,000) + $31,000

= $77900 + $165300 + $174800 + $87400 + $31000

= $536,400

The relevant costs to buy will be:

= 19,000 × $29.5

= $560,500

Since the relevant cost to buy is more than the relevant cost to produce, then the financial disadvantage will be:

= $560500 - $536,400

= $24,100

The answer is ($24,100)

5 0
3 years ago
Investment X offers to pay you $4,020 per year for 12 years, whereas Investment Y offers to pay you $2,041 per year for 7 years.
inna [77]

Answer:

$16,481.68

Explanation:

Note that the present value of each yearly cash inflow can be determined using the formula provided below:

PV of cash inflow=cash inflow/(1+discount rate)^n

n is the year in which the cash inflow is expected, it is 1 for year 1 cash inflow, 2 for year 2 and so on.

PV of Investment X=$4,020/(1+11%)^1+$4,020/(1+11%)^2+$4,020/(1+11%)^3+$4,020/(1+11%)^4+$4,020/(1+11%)^5+$4,020/(1+11%)^6+$4,020/(1+11%)^7+$4,020/(1+11%)^8+$4,020/(1+11%)^9+$4,020/(1+11%)^10+$4,020/(1+11%)^11+$4,020/(1+11%)^12

PV of investment X=$26,099.27

PV of investment Y=$2,041/(1+11%)^1+$2,041/(1+11%)^2+$2,041/(1+11%)^3+$2,041/(1+11%)^4+$2,041/(1+11%)^5+$2,041/(1+11%)^6+$2,041/(1+11%)^7

PV of investment Y=$9,617.59  

the difference in PV=$26,099.27-$9,617.59

the difference in PV=$16,481.68  

5 0
3 years ago
Assume that an American company today invests some of its spare cash in a Hungarian money market account that will earn 8 percen
Artist 52 [7]

Answer:

D. The dollar appreciates against the Hungarian forint.

Explanation:

If after investing, it happens during the next two months that the dollar invested by the American company appreciates against the Hungarian forint.

It would imply that the company will earn less than 8 percent on its investment.

7 0
3 years ago
Read 2 more answers
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