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Dovator [93]
3 years ago
14

▼ Cash Flow Present Discounted Value Interest Rate is based on the notion that a dollar paid in the future is less valuable than

a dollar paid today. The present value of a loan in which ​$5000 is to be paid out a year from today with the interest rate equal to 4​% is ​$ nothing. ​(Round your response to the neareast two decimal​ place) If a loan is paid after two​ years, and the amount ​$9000 is to be paid then with a corresponding 1​% interest​ rate, the present value of the loan is ​$ nothing. ​(Round your response to the neareast two decimal​ place)
Business
1 answer:
BigorU [14]3 years ago
8 0

Answer:

5000 in 1 year at 4% = $4,807.6923

9000 in 2 year at 1% =

Explanation:

We will calculate the present value of the loan at maturity

\frac{Maturity}{(1 + rate)^{time} } = PV

Maturity 5000

time 1

rate 0.04

\frac{5000}{(1 + 0.04)^{1} } = PV

PV  $4,807.6923

\frac{Maturity}{(1 + rate)^{time} } = PV

Maturity 9000

time 2

rate 0.01

\frac{9000}{(1 + 0.01)^{2} } = PV

PV  $8,822.6644

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Answer:

Before a large corporation makes any investment decision, they carry out a cost benefit analysis. In other words, before the banks install clear acrylic partitions, they will decide if the cost of installing those partitions offset the costs of the robberies. The problem with this reasoning is that all banks have insurance against robberies, so if they are robbed the insurance company pays them. So installing the partitions do not represent a lot of benefits for the bank, but they are expensive and represent a large investment. The only way that banks install them is that insurance companies force them to do so.

3 0
3 years ago
Rita Gonzales won the $53 million lottery. She is to receive $2.2 million a year for the next 20 years plus an additional lump s
guajiro [1.7K]

Answer:

PV= $17,365,776.86

Explanation:

Giving the following information:

Cf= 2,200,000

Number of years= 20

Discount rate= 12%

Additional lump sum= 9,000,000

First, we need to calculate the future value using the following formula:

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

A= annual cash flow

FV= {2,200,000*[(1.12^20) - 1]} / 0.12 + 9,000,000

FV= $167,515,373.4

Now, the present value:

PV= FV/(1+i)^n

PV= 167,515,373.4/1.12^20

PV= $17,365,776.86

7 0
4 years ago
What is a rental inventory and why is it a good idea to have one?
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3 0
3 years ago
A company produces two products, A and B. The sales volume for A is at least 80% of the total salces for both A and B. However,
liberstina [14]

Answer:

i) Z = 20( 80 ) + 50(20 ) =  $2600

ii) $3000

Explanation:

representing products  A and B as x₁ and x₂

using the given data

Max ( z ) = 20x₁ + 50x₂  ( optimal product mix for optimal profit )  ---- ( 1 )

0.8 ( x₁ + x₂ )  ≥ 0

0.8x₁  + 0.8x₂ ≥ 0 ------------ ( 2 )

also  x₁ ≤ 100 --- ( 3 )    considering the amount to be sold ( sales volume )

based on the availability of raw material

2x₁ + 4x₂ ≤ 240 ----- ( 4 )

resolve equations 2, 3, and 4 graphically

x₁ = 80 units , x₂ = 20 units

back to equation 1

Z = 20( 80 ) + 50(20 )

   = 1600 + 1000  = $2600

ii) To increase the number of units of A produced

given that x₁ ≤ 100   and the actual optimal units produced = 80 units

2600 + 20(100-80)

= 2600 + 20(20)  = 2600 + 400 = $3000

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