1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
stira [4]
4 years ago
15

Jose wants to cash in his winning lottery ticket. He can either receive five $5,000 annual payments starting today, or he can re

ceive a lump-sum payment now based on a 3% annual interest rate. What would be the lump-sum payment?
Business
1 answer:
ExtremeBDS [4]4 years ago
7 0

Answer:

The lump sum payment =  $23,585.49

                                 

Explanation:

The winning lottery is an example of an advanced annuity. <em>An advanced annuity is a series of cash flows that occurs for a certain number of years with the first cash flow occurring now.</em>

The first cash flow is represents one out of the five, so the balance is a four-year annuity.

So we can work out the present value of the annuity for the last four years as follows:

PV = (1 - (1+r)^(-n)/r )   ×  Annual cash flow

r = 3%=0.03, n = 4, Annual cash flow = 5000

PV = (1- ((1+0.03)^(-4))/0.03)  × 5,000

    = 3.7170 × 5,000

   =$ 18,585.49

The lump sum payment = PV of the first payment + PV of the four year annuity

The lump sum payment = $5000 + $ 18,585.49

                                       =  $23,585.49

You might be interested in
Jeremy is working on a spreadsheet which part of the information processing cycle will justify Jeremy’s use of the spreadsheet a
alukav5142 [94]
<span>Jeremy is working on a spreadsheet, the processing of the information processing cycle will justify Jeremy’s use of the spreadsheet and give the final output.  </span><span>Applying instructions to data takes place during the </span>PROCESSING  <span>stage of the information processing cycle.</span>
3 0
3 years ago
As indicated in the chapter, return on investment (ROI) is well entrenched in business practice. However, its use can have negat
Juliette [100K]

Answer:

ROI = net profit / total investment

1. What is the current return on investment (ROI) being realized by your division

  • ROI = $625,000 / $4,150,000 =  15.06%

2. What would happen to the near-term ROI of your division after adding the effect of the new investment?

  • ROI = ($625,000 + $50,000) / ($4,150,000 + $550,000) =  14.36%

If you carry out the new project the ROI of your division will decrease.

3. As manager of this division, given your incentive compensation plan, would you be motivated to make the new investment?

  • Even though the new project's return (9.1%) is considered acceptable by upper management, you will probably reject it since it will decrease your division's total ROI. When managers are assigned bonuses based on certain achievements, reducing your profitability ratio will probably result in no bonus.
6 0
3 years ago
You've got your budget, credit history and saving in order. whats your next step before shopping for a home?
Softa [21]

Answer:

The correct answer is letter "A": Shop for a mortgage.

Explanation:

After setting a budget and starting a housing fund, checking your credit report and scores, and accruing a certain amount of money to make possible acquiring a house, the next step implies being pre-approved by a mortgage lender. This will give you an idea of how much money a bank might approve to lend you to purchase the property. Thus, after this and finding a Real Estate agent, <em>you can start checking what houses are available for purchase according to what you can afford.</em>

7 0
3 years ago
The four Ps make up the marketing mix, which is the __________ set of decisions or activities that the firm uses to respond to t
Alexeev081 [22]

Answer:

clear and effective strategy comprising

Explanation:

The four Ps make up the marketing mix ,which are product, price, promotion, and place. These four components help determine a clear and effective strategy to bring a product to market. Each element is crucial in its own right and needs to be given due focus .

The product is either a tangible good or an intangible service that is seem to meet a specific customer need or demand. All products follow a logical product life cycle and it is vital for marketers to understand and plan for the various stages and their unique challenges .

Price covers the actual amount the end user is expected to pay for a product. How a product is priced will directly affect how it sells. This is linked to what the perceived value of the product is to the customer rather than an objective costing of the product on offer. If a product is priced higher or lower than its perceived value, then it will not sell. This is why it is imperative to understand how a customer sees what you are selling.

The marketing communication strategies and techniques all fall under the promotion heading. These may include advertising, sales promotions, special offers and public relations.

The place or placement deals with how the product will be provided to the customer. Distribution is a key element of placement. The placement strategy will help assess what channel is the most suited to a product.

5 0
3 years ago
The accumulated depreciation account is a permanent account. <br> a. True <br> b. False
aleksley [76]
Depreciation Expense is a temporary account since it is an income statement account.
Therefore, the answer is
b . False
4 0
4 years ago
Read 2 more answers
Other questions:
  • Snow blowers are sold in areas where there is a longer cold season and the likelihood of snow. the consumer market for snow blow
    14·1 answer
  • The _____ of an ad is defined as being the average number of times a person must see or hear a message before it becomes effecti
    7·1 answer
  • An energy efficiency project has a first cost of $400,000, a life of 10 years, and no salvage value. Assume that the interest ra
    14·1 answer
  • True or false: gross domestic product (gdp) cannot be used to measure the economy’s income. true
    13·1 answer
  • Which act makes it illegal for american executives to bribe foreigners to gain business?
    9·1 answer
  • The accounts receivable balance is $1,000,000. After adjustment, the allowance for uncollectible account balance is $40,000. Net
    12·1 answer
  • Suppose a firm has an annual budget of $200,000 in wages and salaries, $75,000 in materials, $30,000 in new equipment, $20,000 i
    8·1 answer
  • You are an American, working for a US hospital. The hospital sells services to a French hospital. Given a depreciation of the Eu
    13·1 answer
  • Suv-cnbi-nkd<br>eve.ryo.ne jo.in<br>g.oo.gle.mee.t​​
    13·1 answer
  • ABC company decides to invest in training for their workers. Select 3 likely reasons
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!