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Simora [160]
3 years ago
10

Calculate the annual cash flows (annuity payments) from a fixed-payment annuity if the present value of the 15-year annuity is $

750,000 and the annuity earns a guaranteed annual return of 6.85 percent. The payments are to begin at the end of the current year.
Business
1 answer:
rewona [7]3 years ago
8 0

Answer:

$81,567.52

Explanation:

in order to determine the annuity payment we can use the following formula:

present value of the annuity = payment x annuity factor (6.85%. n = 15)

the annuity factor = [1 - 1/(1 + r)ⁿ] / r = [1 - 1/(1 + 0.0685)¹⁵] / 0.0685 = 9.194836402

$750,000 = annuity payment x 9.194836402

annuity payment = $750,000 / 9.194836402 = $81,567.52

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lutik1710 [3]
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I hope my answer helped you. Have a nice day!
6 0
3 years ago
Why does the​ self-correcting mechanism stop working when the policy rate hits the zero lower​ bound?
Alex73 [517]

The available options

A. The​ self-correcting mechanism stops working because the falling inflation produced by a negative output gap produces higher rather than lower real interest rates when the policy rate hits the zero lower​ bound, and this increase depresses planned spending and further widens the output gap.

B. The​ self-correcting mechanism stops working because the falling inflation produced by a negative output gap produces lower rather than higher real interest rates when the policy rate hits the zero lower​ bound, and this decrease depresses saving and investment and therefore further widens the output gap.

C. The​ self-correcting mechanism stops working because the rising inflation produced by a negative output gap produces lower rather than higher real interest rates when the policy rate hits the zero lower​ bound, and this decrease depresses planned spending and further widens the output gap.

D. The​ self-correcting mechanism stops working because the rising inflation produced by a positive output gap produces lower rather than higher real interest rates when the policy rate hits the zero lower​ bound, and this decrease enhances planned spending and further widens the output gap.

Answer:

A

Explanation:

For a given situation in the question above the correct answer is Option A, which is: The​ self-correcting mechanism stops working because the falling inflation produced by a negative output gap produces higher rather than lower real interest rates when the policy rate hits the zero lower​ bound, and this increase depresses planned spending and further widens the output gap.

4 0
4 years ago
On the income statement, a merchandising company reports the cost of merchandise inventory that had been sold to customers. TRUE
Alja [10]

Answer:

True

Explanation:

The correct answer is - True

Reason -

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The word expense is not written there but it is an expense item on the income statement as a reduction to Revenue.

5 0
3 years ago
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Ira Lisetskai [31]

<span>The answer is net present value. It is the difference between the present value of cash inflows and the present value of cash outflows. NPV is used in capital budgeting to examine the effectiveness of a projected investment or project. A net present value that is positive stipulates that the projected earnings produced by a project or investment surpasses the anticipated costs. In general, an investment with a positive NPV will be a profitable one and the one with a negative NPV will result in a net loss. </span>

5 0
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