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Mnenie [13.5K]
3 years ago
14

Your financial planner offers you two different investment plans. Plan X is a $14,000 annual perpetuity. Plan Y is an annuity la

sting 13 years and an annual payment, $20,000. Both plans will make their first payment one year from today. At what discount rate would you be indifferent between these two plans? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
Business
1 answer:
Sonbull [250]3 years ago
7 0

Answer:

At 9.70% discount rate would you be indifferent between these two plans.

Explanation:

Present Value of Perpetuity = P/r

Present Value of Annuity = P/r[1 - (1 + r)^-n]

$14,000/r = $20,000. /r[1 - (1 + r)^-13]

(1 + r)^-13 = 1 - $14,000/$20,000.

(1 + r)^13 = 10/3

r = 9.70%

Therefore, at 9.70% discount rate would you be indifferent between these two plans.

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EZBiz, the brainchild of three college friends, is a startup venture that plans to produce and market sports gear. The venture i
Elden [556K]

Answer:

B) The public is wary of sharing confidential information after a recent spate of credit card scandals.

Explanation:

There are several advantages of click-only companies, especially that they are able to offer lower prices since they don't need to support the costs of brick-and-mortar stores.

But the whole idea of selling through the internet is based on the customers' trust on new technologies and they specially dislike when the new technologies fail, e.g. when a hacker discloses the accounts and passwords of millions of users.

4 0
3 years ago
A decrease in the inventory account during the year should be reported on the indirect method statement of cash flows as?
mylen [45]

A decrease in the inventory account during the year should be reported on the statement of cash flows as in financing activities as a use of funds.

What is in a cash flow statement?

On the cash flow statement, the entire amount of cash and cash equivalents that enter and exit a business are displayed. The CFS focuses on a company's ability to manage its cash, particularly how successfully it produces cash flow. The income statement and balance sheet both receive information from this financial statement.

What is financing activities in cash flow statement?

The cash flow statement's financing activity describes a company's capacity to raise capital and return it to investors via capital markets. The issuance and sale of additional shares of stock, as well as the growth, addition, and modification of existing debt, are also included in these acts. This list also includes dividend payments made in cash.

Learn more about cash flow statement: brainly.com/question/15278261

#SPJ4

6 0
2 years ago
Ken consumes two goods, Sprite and potato chips. Sprite costs $1 per can, and he consumes it to the point where the marginal uti
borishaifa [10]

Answer:

The correct option is c. $8.

Explanation:

Ken will maximize utility where the following equation holds:

MU of Sprite / Price of Sprite = MU of potato chips / Price of potato chips ................. (1)

Where;

MU of Sprite = Marginal utility of Sprite = 3

Price of Sprite = $1 per can

From the table in the question, equation (1) holds at the point where Marginal utility of potato chips is 6 since the Potato chips cost $2 per bag.

Substituting the values into equation (1), we have:

MU of Sprite / Price of Sprite = MU of potato chips / Price of potato chips => 3 / 1 = 6 / 2 = 3

Since when the marginal utility of potato chips that maximizes utility is 6, Ken consumes 4 Bags of Potato chips monthly and pays $2 per bag at this point, the amount he spends on potato chips each month can be calculated as follows:

Amount spent on potato monthly = Number of bags of Potato chips consumed monthly * Cost of potato chips per bag = 4 * $2 = $8

Therefore, the correct option is c. $8.

3 0
2 years ago
Which of the following statements is more likely if cash and marketable securities increase by $5,000 during a period in which c
Goryan [66]

Answer:

C) Debt increases by more than cash dividends paid

Explanation:

Based on the information given the statements that is more likely based on the below calculation will be : DEBT INCREASES BY MORE THAN CASH DIVIDENDS PAID reason been that the NET INCREASE IN THE CASH from financing activities was the amount of $4,500

Net Increase In The Cash from financing activities = $5000 - $1000 + $500

Net Increase In The Cash from financing activities= $4500

4 0
3 years ago
The ________ simplifies the interaction of two groups, firms and households, and allows us to make predictions about economic be
vladimir1956 [14]

Answer:

Circular flow diagram.

Explanation:

The circular flow diagram simplifies the interaction of two groups, firms and households, and allows us to make predictions about economic behavior.

The firm sells their goods and services in the market while the household buys these goods and services.

Hence, the circular flow diagram represents the interaction between the household and firms with respect to the market.

3 0
3 years ago
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