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alexandr1967 [171]
3 years ago
12

On Joe Martin’s graduation from college, Joe’s uncle promised him a gift of $12,000 in cash or $900 every quarter for the next 4

years after graduation. Assume money could be invested at 8% compounded quarterly. a. Calculate the present value of options. (Do not round intermediate calculations. Round your answer to the nearest cent.) b. Which offer is better for Joe? Option 1 Option 2
Business
1 answer:
iris [78.8K]3 years ago
4 0

Answer:

Instructions are below.

Explanation:

Giving the following information:

Option 1:

$12,000 cash now

Option 2:

$900 every quarter for 4 years.

Interest rate= 8% compounded quarterly

We need to determine the present value of option 2.

First, we need to calculate the future value of the investment. We will use the following formula:

FV= {A*[(1+i)^n-1]}/i

A= cash flow= 900

n= 4*4= 16

i= 0.08/4= 0.02

FV= {900*[(1.02^16)-1]} / 0.02

FV= $16,775.36

Now, we determine the present value:

PV= FV/(1+i)^n

PV= 16,775.36/(1.02^16)

PV= $12,219.94

It is more profitable to accept option 2. It provides the highest present value.

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geniusboy [140]

Answer: 15

Explanation:

For profit to be maximized by a monopolist, the marginal revenue and marginal cost must be gotten.

P= 105-3Q

MC= 15

Since total revenue is price × quantity, TR= P×Q = (105-3Q)Q

= 105Q-3Q^2

MR= 105-6Q

Since we've gotten marginal revenue and marginal cost, we equate both together.

MR=MC

105-6Q = 15

6Q = 105-15

6Q=90

Divide both side by 6

6Q/6 = 90/6

Q= 15

The quantity that will maximise profit is 15

6 0
3 years ago
Why do older kids think they know every thing?
fomenos

Answer:

I have no clue tbh lol they think they are the boss of us

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Difference between relevant information and additional information​
dybincka [34]

Answer: Relevant information is information that is important or needed in order to understand the topic in a given passage. Additional information is information that is not needed or unnecessary in the paragraph (it is extra information).

Explanation:

7 0
3 years ago
Research indicates that we form more positive impressions of physically attractive people than we do unattractive people. Explai
mario62 [17]

Answer: The use of attractive people in advertisements is for the purpose of promoting what they are looking to sell.

In the case of movies, the benefit is also sought, that is, more people will watch a movie if the actor who plays it is physically attractive.

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3 0
3 years ago
Suppose the U.S. Treasury offers to sell you a bond for $747.25. No payments will be made until the bond matures 5 years from no
8090 [49]

Answer:

r = 6.00%

Explanation:

given data:

bond price = $747.25

V = \frac{P}{(1+r)^n}

747.25 = \frac{1000}{(1+r)^5}

(1+r)^5= \frac{1000}{747.25}

1.33824  =(1+r)^5

taking log on both side

5 ln (1+r)= ln 1.33824

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5 0
3 years ago
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