People who invest in a corporation by purchasing stock are known as _____________

Justin Slugger is about to sign a contract with the Columbus Homers. The professional baseball team has given him two options of

Andrej [43]

Answer:

Option 1 Present value = $18,181,818.18

Option2 Present value = $20,916,718.64

Option 2 which is an annuity for 15 years is a better option as it has a higher present value than option 1.

Explanation:

To decide the better option, we need to calculate the present value of option 1 which is the lumpsum and the present value of option 2 which is an annuity and compare these values.

The present value of option 1 can be calculated as follows,

Option 1 Present value = Future value / (1 + r)^t

Where,

r is the rate of return of interest or discount rate
t is the time in years

Option 1 Present value = 20,000,000 / (1+0.1)^1

Option 1 Present value = $18,181,818.18

The present value of option 2 can be calculate using the formula of present value of annuity due as the payments will be made at the start of the period. The formula for present value of annuity due is attached.

Option2 Present value = 2,500,000 + 2,500,000 * [(1 - (1+0.1)^-14) / 0.1]

Option2 Present value = $20,916,718.64

Option 2 which is an annuity for 15 years is a better option as it has a higher present value than option 1.

7 0

3 years ago

Here is a question for you to practice your intuition... imagine a deluge in the city versus the forest. why does urbanization (

Serga [27]

The correct answer is B. Urbanization lowers the peak discharge of streams and decreases the lag time after a rainstorm.

4 0

4 years ago

5. Consider a firm redesigning its logistics network. What are the advantages to having a small number of centrally located ware

damaskus [11]

Answer:

Explanation:small number of centrally locates warehouses will make their products readily available in needed small quantities. While having a larger warehouse nearer to the end customers will make the product easily accessible

8 0

3 years ago

You're trying to save to buy a new $230,000 Ferrari. You have $32,000 today that can be invested at your bank. The bank pays 5.5

s344n2d4d5 [400]

Answer:

37 years

Explanation:

We know,

Future value = Present value (1 + r)^n

Given,

Future value, FV = $230,000;

Present value, PV = $32,000;

Interest rate, r = 5.5% = 0.055;

We have to determine how many years later I can purchase the Ferrari.

Now, putting the values into the formula, we get,

FV = PV × (1 + r)^n

or, $230,000 = $32,000 × (1 + 0.055)^n

or, $230,000 ÷ $32,000 = (1 + 0.055)^n

or, 7.1875 = (1 + 0.055)^n

or, log 7.1875 = n × log 1.055

or, n × log 1.055 = log 7.1875 [Changing the side]

or, n = log 7.1875 ÷ log 1.055

Using financial calculator/Scientific Calculator,

or, n = 0.8566 ÷ 0.0233

Therefore, n = 36.76 or almost 37 years.

4 0

3 years ago

When Dr. Putt invented his Eye-Over-the-Ball (EOB) golf putting device, he knew during the introductory stage:

Alchen [17]

Answer:

D) sales would be low, profits non-existent, and he would attract golf equipment innovators.

Explanation:

Generally during the introductory stage of a product or service;

the sales are usually low since not a lot of customers know or trust you product or service,
due to low sales and high costs, profits are usually very small or non-existent,
many times innovators are the first ones to try your product, specially in a very conservative market, like golf equipment and related products.

7 0

4 years ago

People who invest in a corporation by purchasing stock are known as ______________.