Closely held corporations sell shares of stock to the public. <br> True <br> False

Ralph buys a perpetuity due paying 500 annually. He deposits the payments into a savings account earning interest at an effectiv

Leto [7]

Answer:

X = 1523

Explanation

Perpetuity due = (C/r) + C. Where Annual payment C =500, Annual effective interest rate = 10%

Perpetuity due = (500/10%) + 500 = 5500

Value of perpetuity due will remain same after 10 years

Money in saving account can be calculated with FV of an Annuity due formula

FV = C*(1+r) *{(1+r) ^n−1} / r

Where n = 10 years

FV = 500*(1+10%) * {(1+10%)^10 - 1} / 10%

FV = 500*1.10 * [1.10^10 - 1 / 0.10}

FV = 550 * 1.5937424601/0.10

FV = 550 * 15.937424601

FV = 8765.58353055

FV = 8766

Total proceeds = 5500 + 8766 = 14266

Now this proceed is the present value for annual payment of X calculation . Formula of the present value (PV) of annuity due: PV = X * [1- (1+r) ^-n / r] * (1+r) : Where PV = 14266, Annuity payment X = ?, Interest rate r = 10%, Period of annuity = 20 years.

1.10^-20

PV = X * [1- (1+r)^-n / r] * (1+r)

14266 = X * (1 - (1+10%)^-20 / 10%) * (1+10%)

14266 = X * [1 - 0.14864362802/0.10]*1.10

14266 = X * [8.5135637198*1.10]

14266 = X * 9.3649

X = 14266 / 9.3649

X = 1523.347820051469

X = 1523

3 0

3 years ago

Mofro's Computer Repair Shop started the year with total assets of $300,000 and total liabilities of $200,000. During the year,

azamat

Answer:

The change in stockholders' equity was of 150.000

Explanation:

With the amount of sales and expenses of the year, the company had a profit of 200.000, if it pay dividends by 50.000, it means that the company retained earnings for 150.000, this is the change in the equity of the company and keep in cash in the total assets.

8 0

3 years ago

shhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhheeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeeesssssssssssssssssssssssssssssssssssssssssssshhhhhh

adell [148]

Answer:

Yo Angelo

Explanation:

5 0

3 years ago

Read 2 more answers

Rock Solid Concrete Company does not offer customers a cash discount for early payment of their accounts receivable. As a result

Alex73 [517]

Answer:

The correct answer is the option D: Time value of money.

Explanation:

To begin with, due to the fact that Rock Solid Concrete Company does not offer customers a cash discount for early payment then it is quite obvious that their customers will try to wait to pay their bills on the last day because in that way they will be able of having that money availabe for any issues or inconveniences that could occur during those first days, therefore that those customers apparently <u>understand the importance of time value of the money because if the pay early they will lose that cash and would not have it for any urgencies</u>.

7 0

3 years ago

The discount rate is the interest rates on loans that the Federal Reserves makes banks. Banks occasionally borrow from the Feder

Kaylis [27]

Answer:

Explanation:

The discount rate is the interest rates on loans that the Federal Reserves makes banks. Banks occasionally borrow from the Federal Reserve when they find themselves short on reserves. A higher discount rate decreases banks' incentives to borrow reserves from the Federal Reserve, thereby reducing the quantity of reserves in the banking system and causing the money supply to fall

The federal funds rate is the interest rate that banks charge one another for short term loans. When the Federal Reserve uses open-market operations to buy government bonds, the quantity of reserves in the banking system increases, banks' demand for borrowed reserves declines , and the federal funds rate decreases.

6 0

3 years ago

Closely held corporations sell shares of stock to the public. True False