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jenyasd209 [6]
3 years ago
13

Shelley wants to cash in her winning lottery ticket. She can either receive fourteen, $188,000 semiannual payments starting toda

y, or she can receive a single-amount payment today based on a 6% annual interest rate. What is the single-amount payment she can receive today
Business
1 answer:
velikii [3]3 years ago
4 0

Answer:

$2,123,661.75

Explanation:

We are to find the present value of the payments

but first we are to determine the future value of the payments

The formula for calculating future value = A (B / r)

B = [(1 + r)^n] - 1  

R = interest rate = 6% / 2 = 3%

N = number of years = 14

(1.03^14 - 1 ) / 0.03 = 17.086324

$188,000 x 17.086324 = $3,212,228.94

Present value = future value(1 + r ) ^-N

$3,212,228.94(1.03)^-14 = $2,123,661.75

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Levin Furniture buys a living room set with a $4,000 list price and a 55% trade discount. Freight (FOB shipping point) of $50 is
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Answer:Delivered price=$1,814

Explanation:

List Price = $4,000

Trade  discount = 55%

Price after discount = $4,000 - 55% x $4000

$4000- $2,200 =  $1,800

if Levin pays within 10 days he will have a discount of 2 %, which he did

Therefore 2% x $1800 = $36

Delivered price =   $1800 -$36+ freight charges ( shipping)

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3 years ago
Guadalupe, Inc. provided $5,000 of services in Year 1 but did not collect cash from its customers until Year 2. Select the corre
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Answer:

C. The company will recognize $5000 of revenue in year 1 and $5000 of cash flow from operation in year 2

Explanation:

As, the company is using accrual based accounting, that means that if the services are rendered the company needs to record the revenue regardless of the company is getting cash or not. So, in year 1 the company provided $5000 of services. The company will record $5000 of revenue in its income statement in year 1. But the thing is, company is not getting cash in year 1. Guadalupe is getting cash in year 2. company record the inflow and outflow of cash in cash flow statement when there is actually the cash transaction involved.

Cash inflow in year 2. so, $5000 of cash flow from operation in year 2.

4 0
4 years ago
The King Corporation has total annual revenue of $800,000; expenses other than depreciation of $350,000; depreciation expense of
tatiyna

Answer:

Results are below.

Explanation:

<u>First, we will determine the net income for tax purposes:</u>

Sales= 800,000

Expenses other than depreciation= (350,000)

Gross profit= 450,000

Depreciation= (200,000)

EBT= 250,000

Tax= (250,000*0.34)= (85,000)

Depreciation= 200,000

Net income= 365,000

<u>Now, for reporting purposes:</u>

Gross profit= 450,000

Depreciation= (130,000)

EBT= 320,000

Tax= (320,000*0.34)= (108,800)

Depreciation= 130,000

Net income= 341,200

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3 years ago
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