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oksian1 [2.3K]
3 years ago
8

Suppose you are going to receive $12,000 per year for five years. The appropriate interest rate is 9 percent. a-1. What is the p

resent value of the payments if they are in the form of an ordinary annuity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) a-2. What is the present value of the payments if the payments are an annuity due? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b-1. Suppose you plan to invest the payments for five years. What is the future value if the payments are an ordinary annuity? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) b-2. What is the future value if the payments are an annuity due? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) c-1. Which has the higher present value, the ordinary annuity or annuity due? c-2. Which has the higher future value?
Business
1 answer:
shusha [124]3 years ago
3 0

Answer:

What is the present value of the payments if they are in the form of an ordinary annuity?

Discount all cash flows

12,000/1.09=11,009

12,000/1.09^2=10,100

12,000/1.09^3=9,266

12,000/1.09^4=8,501

12,000/1.09^5=7,799

Add all these discounted cash flows= $46,675 is the present value of ordinary annuity

a-2. What is the present value of the payments if the payments are an annuity due?

In an annuity due payment is made at the beginning of the year so we subtract one from each compounding period so,

12,000/1.09^0=12,000

12,000/1.09=11,009

12,000/1.09^2=10,100

12,000/1.09^3=9,266

12,000/1.09^4=8,501

add all these discounted cash flows = $50,876= PV of annuity due

FV of ordinary annuity

PV= 0

PMT=12,000

I= 9

N= 5

FV=? Put these in financial calculator= $71,816

Fv of annuity due=

12,000+

PV=0

PMT=12,000

I=9

N=4

FV=?=66,877

Pv  of annuity due is higher and FV or ordinary annuity is higher.

Explanation:

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Q7. Which of the following is a necessary condition – something that must occur—for nominal GDP to rise? Explain your answers.
shusha [124]

Answer:

Either the price level or real GDP must increase

Explanation:

Gross Domestic Product (GDP) is used to measure the economic growth, purchasing power, and overall economic health of a country. nominal Gross Domestic Product, measures the value of all final goods and services produced within a country’s borders at current market prices. It takes change in prices and interest rates, inflation and money supply into account when calculating a country’s gross domestic product. Real GDP takes nominal GDP and adjusts for inflation or deflation by comparing and converting prices to a base year’s prices. For nominal GDP to rise there must be increase on either the price level or real GDP.

5 0
2 years ago
Brunette Company is contemplating investing in a new piece of manufacturing machinery. The amount to be invested is $180,000. Th
diamong [38]

Answer:

No,  as the net present value comes in negative

Explanation:

As we know that

Net present value = Present value of cash inflows - Initial investment

where,

Present value os $163,000

And, the initial investment is $180,000

Now placing these values to the above formula

So, the net present value is

= $163,000 - $180,000

= -$17,000

Therefore the company should not accept the project as net present value is in negative that is -$17,000

6 0
3 years ago
Presented below are incomplete manufacturing cost data.
Usimov [2.4K]

Answer and Explanation:

The computation of the missing amount is as follows

As we know that

Total manufacturing costs is

= Direct materials cost + Direct labor cost + Factory overhead  cost

And,

Cost of goods manufactured is

= Total manufacturing costs + Beginning work in process - ending work in process

Based on this, the calculation is as follows

  <u> Direct materials Direct labor Factory       Total</u>

<u>                                                       overhead  manufacturing costs </u>

1. $44,000               $62,200     $51,100        $157,300

2. $78,500             $77,500     $144,000       $300,000

3. $58,600            $138,400     $114,000       $311,000

Now

<u>  Total Manufacturing Costs Beg. Work   End. Work  Cost of Goods </u>

<u>                                               in Process  in Process  Manufactured </u>

1. $157,300                           $122,000     $85,200      $194,100

2. $300,000                         $123,400        $99,800     $323,600

3. $311,000                            $465,000       $57,000     $719,000

4 0
2 years ago
On August 2, Jun Co. receives a $8,000, 90-day, 11.0% note from customer Ryan Albany as payment on his $8,000 account receivable
GarryVolchara [31]

Answer:

August 2    Notes Receivable                   8000 Dr

                           Accounts Receivable- Ryan         8000 Cr

October 30  Interest receivable                  220 Dr

                          Interest Revenue                          220 Cr

October 31   Cash                                        8220 Dr

                            Notes Receivable                    8000 Cr

                            Interest Receivable                   220 Cr

Explanation:

When we receive the Note against the Accounts Receivable, we will credit the Accounts Receivable to close the account of Ryan and create a new current asset account of Notes Receivable on August 2.

On October 30, 90 days period of Note is complete so we will record the interest that is receivable for us on this note.

  • Interest Receivable = 8000 * 11% * 90/360  = $220

We record this as Interest Receivable as we have not received this and credit Interest revenue as it is our income.

On 31 October, when we receive cash it will be total of Notes payable and Interest so we will debit cash by 8220 and credit the Notes payable and interest receivable.

8 0
3 years ago
Columbia Corporation produces a single product. The company's variable costing income statement for November appears below: Colu
Illusion [34]

Answer:

Hie, there is <em>no correct answer</em> from the Options provided.

The Net Profit Under absorption costing, for November would be $7,460.

This is can be calculated from reconciling the Variable Costing profit to Absorption Costing profit or Alternatively from Preparing Absorption costing statement as shown below:

<u>Absorption Costing Income Statement for November.</u>

Sales                                                                           765,000

Less Costs of Goods Sold

Opening Stock (8,650×14)                       121,100

Add Cost of Manufacture (35,120×14)  491,600

Less Closing Stock (1270×14)                  (17,780)    594,920

Gross Profit                                                                170,080

Less Expenses

Variable selling expense                                           127,500

Fixed Selling and administrative                                35,120

Net Income / loss                                                            7,460

4 0
3 years ago
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