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loris [4]
4 years ago
14

alculate the difference between the present value of $200 per year cash payments for the next 40 years and the present value of

$200 per year cash payments in perpetuity. Assume in either case, the first payment occurs one year from today and that the appropriate discount rate is 8%/year. The difference in the present value of these two streams of future cash payments that you calculated equals the present value of cash payments over what period of time?
Business
1 answer:
Pani-rosa [81]4 years ago
8 0

Answer:

Present value of annuity = PV(8%,40,-200,0,0)

Present value of annuity = $2,384.93

Present value of Perpetuity = 200/ 8%

Present value of Perpetuity = 200 / 0.08

Present value of Perpetuity = 2500

The difference between the Present value = $2,500 - $2,384.93 = $115.07

However, both does not equal as time value has to be considered.

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Novak Corporation has the following balances at December 31, 2017. Projected benefit obligation $2,621,000 Plan assets at fair v
NeTakaya

Answer:

$574,000

Explanation:

Calculation for the amount for pension liability that should be reported on Novak's balance sheet at December 31, 2017

Using this formula

Pension liability=Projected benefit obligation - Plan assets

Let plug in the formula

Pension liability=$2,621,000-2,047,000

Pension liability=$574,000

Therefore the amount for pension liability that should be reported on Novak's balance sheet at December 31, 2017 will be $574,000

5 0
4 years ago
Evaluating employee performance helps with all of the following EXCEPT which of the
Goshia [24]

Answer:

Sick Leave - C

Explanation:

Evaluating performance helps determine whether to promote, transfer or layoff but it does not determine whether or not an employee can use sick leave.  You can lower an evaluation based upon performance and abuse of sick leave.  If an employee is frequently absent without an excuse, then their performance and work tasks will suffer.  This allows a manager to lower a performance rating.

4 0
2 years ago
Spencer Enterprises is attempting to choose among a series of new investment alternatives. The potential investment alternatives
fomenos

Answer:

Assume: only one of the ware house expansion projects can be implemented and suppose that, if test marketing of the new product is carried out, the advertising campaign also must be conducted and vice versa. Also suppose that the purchase of new equipment cannot be undertaken unless the basic research or the extensive warehouse expansion are implemented.

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Yi (1 if investment alternative is selected, o otherwise)

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∴ NPV = 17,500

4 0
3 years ago
Perhaps the most well-known "forced savings," or contributory, program is
kirill [66]

Answer:

D) Social Security

Explanation:

Social security is by far the most popular federal government program. It is part of the social network provided by the federal government. Its main purpose is to ensure that all the citizens will have some type of income when they are old or disabled. It doesn't matter if you are rich or poor, social security applies to all citizens.

8 0
3 years ago
A firm knows that Seneca's income elasticity of demand for hair ties is 5; for Janelle, it is 0.2. A firm can reason thatla hair
Lilit [14]

Answer: E. luxury; necessity

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Income elasticity of demand is a measure of how the demand for a good or service change when people's income changes. It the ratio of the percentage change in quantity demanded to the percentage change in income.

3 0
4 years ago
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