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
uranmaximum [27]
3 years ago
12

What is the present value of a perpetuity that pays you annual, end-of-year payments of $950? Use a nominal rate (monthly compou

nding) of 7.50%.
Business
2 answers:
nasty-shy [4]3 years ago
7 0

Answer:

PV= $12,242.27

Explanation:

Giving the following information:

Cf= 950

Nominal interest= 0.0750 monthly compounded

<u>First, we need to determine the real interest rate:</u>

Monthly interest rate= 0.075/12= 0.0625

Real annual rate= (1.00625^12) - 1= 0.0776

N<u>ow, we can calculate the present value using the following formula:</u>

PV= Cf/ i

PV= 950/0.0776

PV= $12,242.27

enot [183]3 years ago
5 0

Answer:

The present value of the perpetuity is $12,242.27.

Explanation:

A perpetuity is an <em>annuity</em> that provide cash flow for an <em>infinite</em> period .Examples are Non -redeemable Preference Share.

Present Value (perpetuity) = Payments ÷ Required Rate

But, first change the 7.50 % nominal rate to Annual Effective Rate to match the period of Cash flow.

Effective Rate = (1 + r / m)^m - 1

                       = ( 1 + 0.0750 / 12) ^12 -1

                       = 7.76%

Therefore, Present Value (perpetuity) = $950 ÷  7.76%

                                                              = $12,242.27

You might be interested in
Bezakan tiga ciri antara Tarif dengan kuota
jek_recluse [69]

Itulah perbezaan antara tarif dan kuota.

Maaf lah bila tak saya tulis kat sini, sebab tak boleh hantar jawaban.

<em>Semoga </em><em>membantu </em><em>dan </em><em>bermanfaat </em><em>:</em><em>)</em>

3 0
3 years ago
Bao has been notified by his electric company that his rates are going up on his graduated fee schedule. He currently pays?
Salsk061 [2.6K]

Bao has been notified by his electric company that his rates are going up on his graduate fee schedule. he currently pays $81.

Baozi (Chinese: 包子), or bao, is a form of yeast-leavened crammed bun in diverse Chinese cuisines. there are numerous variations in fillings (meat or vegetarian) and arrangements, even though the buns are most usually steamed. they're a version of mantou from Northern China. Baozi.

The Bao ('bun') developed in Chinese language subculture as a filled form of 'Mantou,' a plain steamed dumpling that is frequently compared to bread. The story in the back of this steamed pride explains not just its particular form, but purchase why its improvement into Baos (or ) was the sort of herbal one.

Bánh bao (literally "dumplings") is a Vietnamese bun primarily based on the Cantonese da bar added to Vietnam through Cantonese immigrants. it is a ball-formed bun containing red meat or fowl meat, onions, eggs, mushrooms, and greens, in Vietnamese delicacies.

Learn more about bao here:

brainly.com/question/1632995

#SPJ4

5 0
2 years ago
1. When you spend more than you make, you have a(n) _____?
Y_Kistochka [10]
I think the correct answer from the choices listed above is option A. When you spend more than you make, you have a deficit. <span>In economics, a </span>deficit is<span> an excess of expenditures over revenue in a given time period. Hope this answers the question. Have a nice day.</span>
7 0
4 years ago
Read 2 more answers
Brittany, an accrual basis taxpayer, operates a small distribution business. Her records show the following income items for the
Butoxors [25]
Her gross income is $65,975.00 
4 0
3 years ago
Read 2 more answers
Payton, Inc.'s charter authorized 100,000 shares of stock with a par value of $1 per share. Payton issues 100 shares at a market
hoa [83]

Answer:

Common stock and $100

Explanation:

The journal entry is shown below:

Cash Dr $500   (100 shares × $5)

     To Common stock $100  (100 shares × $1)

     To Additional paid in capital in excess of par value - common stock  (100 shares × $4)

(Being the issuance of the common stock is recorded)

For recording this we debited the cash as it increased the assets and credited the common stock and additional paid in capital as it increased the stockholder equity    

6 0
3 years ago
Other questions:
  • Question 1 Saved
    15·1 answer
  • "A customer holds 10 ABC Jan 60 Call contracts. ABC Corporation is paying a 20% stock dividend. On the ex date, the contracts wi
    12·1 answer
  • Skysong, Inc. wrote checks totaling $31510 during October and $34410 during November. $29960 of these checks cleared the bank in
    9·1 answer
  • An activity on a project schedule has these duration estimates: optimistic (a) = 1, most likely (m) = 2, and pessimistic (b) = 5
    7·1 answer
  • Leadership in small firms is more ____ in comparison to the leadership in large corporations.
    12·1 answer
  • -2x^2y, if x=-3 and y=-1
    10·1 answer
  • Accountants include ________ costs as part of a firm's costs, while economists include ________ costs. Group of answer choices i
    6·1 answer
  • Which structure is used to supply customers (often other MNEs) in a coordinated and consistent way across various countries
    15·1 answer
  • the current price of a stock is 200 if a coll option on this stock has a strike price of 201 the call is
    13·1 answer
  • When assessing the pulse of an unresponsive infant, you should palpate the ________ artery.
    9·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!