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Bond [772]
3 years ago
9

Foutz Corporation has entered into a 8 year lease for a piece of equipment. The annual payment under the lease will be $3,600, w

ith payments being made at the beginning of each year. If the discount rate is 17%, the present value of the lease payments is closest to: (Round to nearest dollar)
Business
1 answer:
IRINA_888 [86]3 years ago
3 0

Answer:

$17,721

Explanation:

The computation of the Net present value is shown below

The discount factor should be computed by

= 1 ÷ (1 + rate) ^ years

where,  

rate is 17%  

Year = 0,1,2,3,4 and so on

Discount Factor:

For Year 1 = 1 ÷ 1.17^0 = 1

For Year 1 = 1 ÷ 1.17^1 = 0.8547

For Year 2 = 1 ÷ 1.17^2 = 0.7305

For Year 3 = 1 ÷ 1.17^3 = 0.6244

For Year 4 = 1 ÷ 1.17^4 = 0.5377

For Year 5 = 1 ÷ 1.17^5 = 0.4561

For Year 6 = 1 ÷ 1.17^6 = 0.3898

For Year 7 = 1 ÷ 1.17^7 = 0.3332

So, the calculation of a Present value of all yearly cash inflows are shown below

= Year 0 cash inflow × Present Factor of Year 0 + Year 1 cash inflow × Present Factor of Year 1 + Year 2 cash inflow × Present Factor of Year 2 + Year 2 cash inflow × Present Factor of Year 2 + Year 3 cash inflow × Present Factor of Year 3 + Year 4 cash inflow × Present Factor of Year 4 + Year 5 cash inflow × Present Factor of Year 5 + Year 6 cash inflow × Present Factor of Year 6 + Year 7 cash inflow × Present Factor of Year 7

= $3,600 × 1 + $3,600 × 0.8547 + $3,600 × 0.7305 + $3,600 × 0.6244 + $3,600 × 0.5377 + $3,600 × 0.4561 + $3,600 × 0.3898 + $3,600 × 0.3332

= $3,600 + $3,077 + $2,630 + $2,248 + $1,921 + $1,642 + $1,403 + $1,200

= $17,721

We take the first four digits of the discount factor.  

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Two athletes of equal ability are competing for a prize of $10,000. Each is deciding whether to take a dangerous performance-enh
Degger [83]

Answer:

a) attached below.

b) for $x < $5000 will cause taking the drug to be part of the Nash equilibrium

c) will make the athletes feel better because the value their payoff will increase

Explanation:

<u>a) 2 * 2  payoff matrix  describing the decision faced by the athletes </u>

attached below

when both players take the drug the payoff for each player = $5000 - x

when neither player  takes the drug the payoff for each player = $5000

When only one player takes the drug his payoff = $10000 - x

<u>b) If we consider the value of $x to be involved in the Nash equilibrium then </u>

; $5000 - $x > 0  becomes the best response

hence for $x < $5000 will cause taking the drug to be part of the Nash equilibrium

c) Lowering the negative effect of the drug ( i.e. when the value of x is reduced )

will make the athletes feel better because the value their payoff will increase

5 0
3 years ago
The separate condensed balance sheets of Patrick Corporation and its wholly owned subsidiary, Sean Corporation, are as follows:
Simora [160]

Answer:

Patrick Corporation Group

a. The amount of total assets is:

=  $1,544,000.

b. The amount of total stockholders' equity that should be reported is:

= $1,136,000.

Explanation:

a) Data and Calculations:

BALANCE SHEETS December 31, 2017

                                              Patrick        Sean          Consolidated

Cash                                    $70,000     $70,000           $140,000

Accounts receivable (net)   146,000       38,000             184,000

Inventories                           100,000      46,000             168,000

Plant and equipment (net) 622,000    262,000            884,000

Investment in Sean             470,000           -                       -

Goodwill                                                                           168,000

Total assets                     $1,414,000 $424,000        $1,544,000

Accounts payable                176,000     90,000            266,000

Long-term debt                   102,000     40,000            142,000

Common stock ($10 par)   340,000      64,000           340,000

Additional paid-in capital                        14,000

Retained earnings            796,000     216,000          796,000

Total liabilities and

 shareholders' equity  $1,414,000  $424,000      $1,544,000

b) Total stockholders' equity after consolidation is calculated as:

Common stock ($10 par)   340,000

Retained earnings             796,000

Total equity =                 $1,136,000

5 0
3 years ago
A(n)
KIM [24]

Answer:

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Explanation:

I hope this is one of the choices!!

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nirvana33 [79]

Answer: A

Explanation:

Management decisions by the ability to engage in proxy fights. A proxy fight, also known as a proxy contest or proxy battle, refers to a situation in which a group of shareholders in a company joins forces in an attempt to oppose and vote out the current management or board of directors. In other words, a proxy fight is a battle between shareholders and senior management for control of the company.

Corporate shareholders are best protected from incompetent management decisions by the ability to engage in proxy fights.

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3 years ago
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