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aniked [119]
3 years ago
8

Alex Meir recently won a lottery and has the option of receiving one of the following three prizes: (1) $62,000 cash immediately

, (2) $19,000 cash immediately and a six-period annuity of $7,600 beginning one year from today, or (3) a six-period annuity of $12,500 beginning one year from today. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.) 1. Assuming an interest rate of 6%, determine the present value for the above options. Which option should Alex choose? 2. The Weimer Corporation wants to accumulate a sum of money to repay certain debts due on December 31, 2030. Weimer will make annual deposits of $110,000 into a special bank account at the end of each of 10 years beginning December 31, 2021. Assuming that the bank account pays 7% interest compounded annually, what will be the fund balance after the last payment is made on December 31, 2030?

Business
1 answer:
Sergeeva-Olga [200]3 years ago
7 0

Answer:

Explanation:

We must find the option with the greatest net present value (NPV).

1) The NPV is $62,000

2) First, you must calculate the NPV with the formula attached, for example:

NVP= ($7,600/(1+6%)^1)+($7,600/(1+6%^2)+($7,600/(1+6%^3)... and so on until year 6

With the excel formula "NPV" you can calculate the net present value specifying the interest rate, the cash flows.

NPV= $37,371.66

The TOTAL NPV= $19,000+$37,371.66= $56,371.66

3) NVP= ($12,500/(1+6%)^1)+($12,500/(1+6%^2)+($12,500/(1+6%^3)... and so on until year 6

NPV= $61,466.55

The best option is option 1.

Question 2.

We must use the compound interest formula:

Final Capital (FC)= Initial Capital (IC)*[(1+interest(i))]^(number of periods(n))

In Dec 31, 2022:

FC= $110,000*(1+7%)^1

FC=$117,000

Balance in Dec 31,2022 = $117,000+$110,000=$227,000

In Dec 31,2023

FC= $227,000*(1+7%)^1

FC= $243,639

Balance in Dec 31,2023= $243,639+$110,000= $353,639

And so on until 2030

If the Weimer corporation makes the last payment in 2030;

The balance in Dec,31 2030= $1,409,809+$110,000= $1,519,809

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Home Furnishings reports inventory using the lower of cost and net realizable value (NRV). Below is information for its year end
solniwko [45]

Answer:

1.$37,000

2.$32,000/

Explanation:

1. Calculation to the Cost of ending inventory before any adjustment

Inventory Quantity Unit Cost Total cost

Furniture 200* $85 = $17,000

Electronics 50* $400= $20,000

Cost of ending inventory before any adjustment =$37,000

Therefore the Cost of ending inventory before any adjustment will be $37,000

2. Calculation to determine the ending inventory using the lower of cost and net realizable value.

Inventory Quantity Unit NRV

Furniture 200* $100 =$20,000

Electronics 50* $300= $15,000

Total cost of ending inventory using lower of cost and net realizable value (NRV) $32,000

Therefore the ending inventory using the lower of cost and net realizable value will be $32,000

5 0
3 years ago
A very small country's gross domestic product is $12 million.
Alekssandra [29.7K]

Answer:

The amount of net exports of goods and services is -$1 million.

Explanation:

The gross domestic product (GDP) is equal to the total value of the products and services that are produced in a country in a specific period of time. In this case, we will have that GDP would be:

GDP= I+G+NX

I= investment

G= government expenditure

NX= net exports

Then, we replace the formula and isolate NX:

$12=$5.5+$7.5+NX

NX= $12-$5.5-$7.5

NX= -$1

4 0
3 years ago
Synergy will ______ the sales of existing products.
patriot [66]

Synergy will <u>increase</u> the sales of existing products.

Synergy refers to the concept where two companies will combine their  value and performance and they will be greater than the sum of the separate individual parts. Thus, these two companies can merge to create greater efficiency or scale.

Through synergy individuals or entities combine their efforts and resources to accomplish more collectively than they could individually. This practice eventually results in increased productivity, efficacy, and performance. Synergy is seen to be reflected on a company's balance sheet through the company's goodwill account.

Hence, in addition to merging with another company, a company also creates synergy by combining products or markets.

To learn more about Synergy here:

brainly.com/question/26886908

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3 0
2 years ago
According to Miles and Snow, a company that operates in at least two different product-market areas in which one product is stab
Kruka [31]
It is B) Reactors
Because they operate
5 0
3 years ago
Read 2 more answers
White Corporation, a closely held personal service corporation, has $150,000 of passive activity losses, $120,000 of active busi
LenKa [72]

Answer:

correct option is a.$0

Explanation:

given data

passive activity losses = $150,000

active business income = $120,000

portfolio income = $30,000  

to find out  

how much passive activity loss can White Corporation deduct

solution

as per given we know that here white corporation is a Personal Service Corporation

so that it is not deduct the passive loss against the portfolio income

so correct option is a.$0

3 0
3 years ago
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