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scZoUnD [109]
3 years ago
11

A firm has borrowed $5,000,000 for 5 years at 10% per year compound interest (compounded yearly). The firm will make no payments

until the loan is due, when it will pay off the interest the interest and principal in one lump sum. What is the total payment?
Business
1 answer:
Marta_Voda [28]3 years ago
6 0

Answer:

The firm will pay $8,052,550 in lump sum after 5 years

Explanation:

A = P(1+r)^n

A= 5,000,000 * (1+0.10)^5

A= 5,000,000 * (1.10)^5

A= 5,000,000 * 1.61051

A= 8,052,550

Thus, the firm will pay $8,052,550 in lump sum after 5 years

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Carla Vista Energy Company owns several gas stations. Management is looking to open a new station in the western suburbs of Balt
tatuchka [14]

Answer:

The present Value of the growing annuity= $1,158,092.68  

Explanation:

The present value of the growing annuity is going to be computed as follows:

PV = A/(r-g) × (1- (1+g/1+r)^n)

A- annual cash flow- $87,460

g- growth rate - 6.3%

n- number of years =73

r- discount rate - 13.8%

I will break out the formula into two parts to make the workings very clear to follow. So applying this formula, we can work out the present value of the growing annuity  as follows.  

A/(r-g)  = 87,460/(0.138-0.063) =1,166,133.33

(1- (1+g/1+r)^n)  = 1- (1.063/1.138)^73 =0.9931

PV = A/(r-g) × (1- (1+g/1+r)^n)

166,133.33× 0.9931 =  1,158,092.68  

The present Value of the growing annuity= $1,158,092.68  

6 0
3 years ago
At the beginning of 2018, England Dresses has an inventory of $140,000. However, management wants to reduce the amount of invent
Bad White [126]

Answer:

purchases = 160000

Explanation:

given data

beginning inventory = $140,000

amount of inventory on hand = $80,000

net sales = $400,000

gross profit rate = 40%

solution

we first Computation of cost of goods sold  hat is

Gross profit rate = \frac{gross profit}{net sales} × 100

= \frac{gross profit}{400000} = = \frac{40}{100}

= 100 Gross profit = 16000000

so

Gross profit = 160000

and

Cost of goods sold is = sales - gross profit

so

Cost of goods sold = 400000 - 160000

Cost of goods sold = 240000

and

Cost of goods sold = opening inventory + purchases - closing inventory  

so put here value

240000 = 140000 + purchases - 60000

so purchases = 160000

7 0
3 years ago
When​ Elle's Espresso Bar raised its price by 10​ percent, the quantity of coffee that Elle sold decreased by 40 percent. When E
victus00 [196]

Answer:<u><em> Elle's coffee has lots of close substitutes while coffee has few substitutes, so the demand for Elle's coffee is more elastic than the market demand for coffee.</em></u>

Here, it can be seen that when Elle's Espresso Bar raised its price by 10​ percent, the quantity of coffee that Elle sold decreased by 40 percent, whereas when Elle and all her competitors cut their prices by 10​ percent, the quantity of coffee sold by Elle increased by only 4 percent.

∴<em><u> The demand for Elle's coffee is more elastic than the market demand for coffee.</u></em>

<em><u /></em>

7 0
3 years ago
Read 2 more answers
What is the present value of a cash flow that begins with $1,500 deposited at the end of year 1 and increases by $500 per year t
blsea [12.9K]

Answer:hahah

Explanation:u are so unsmart hahah lol

8 0
3 years ago
Mabbe Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A i
vagabundo [1.1K]

Answer:

d. $8.69

Explanation:

Activity rate for Activity 2 = Estimated Overhead Cost / Expected Activity

Activity rate for Activity 2 = $19,987.00 / 2300

Activity rate for Activity 2 = $8.69 per activity

7 0
3 years ago
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