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denis-greek [22]
3 years ago
10

You have just received a windfall from an investment you made in a​ friend's business. She will be paying you $ 15 comma 555 at

the end of this​ year, $ 31 comma 110 at the end of next​ year, and $ 46 comma 665 at the end of the year after that​ (three years from​ today). The interest rate is 6.7 % per year. a. What is the present value of your​ windfall? b. What is the future value of your windfall in three years​ (on the date of the last​ payment)?
Business
1 answer:
Vilka [71]3 years ago
7 0

Answer:

Present value = $75,379.47

Future value is $91,567.97

Explanation:

a) Present value of cash flow is calculated as:

Present\ value = \frac{(15,555}{1.067} + \frac{(31,110}{(1.067)^2}) + \frac{(46,665}{(1.067)^3})

Present value = $14578.25 + $27,325.69 + $33475.53

Present value = $75,379.47

b) Future value of windfall is calculated as

Future\ value  = present\ value \times (1-r)^n

Future\ value  = 75379 \times (1+ 0.067)^3

Future value is $91,567.97

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From the given description, Chip is using an experimental design called (A) matching.

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Any attempt to verify outcomes and compare them standards can be considered a(an) _______activity, althoughmany smaller firms do
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B. auditing is your word
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3 years ago
Which of the following is a fixed cost?
Mice21 [21]

Answer:

The answer is d. payment to hire a security worker to guard the gate to the factory around the clock.

Explanation:

Let re-visit to the concept of Fixed cost before applying to the questions.

Fixed costs are costs which are unchanged given changes in production level.

a. payment to a electric utility is not fixed cost because higher level of production required higher electricity consumption which leads to higher cost of electricity.

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d. payment to hire a security worker to guard the gate to the factory around the clock is fixed cost because regardless of the production level, the security worker will work for the same amount of time and receive the same level of payment as his workload is much likely to remain the same.

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3 0
3 years ago
On January 1, 2020, Tamarisk Corporation issued $700,000 of 9% bonds, due in 8 years. The bonds were issued for $740,784, and pa
EleoNora [17]

Answer:

Cash   740,783 debit

  Bonds payable    700,000 credit

  Premium ob BP      40,783 credit

--to record issuance--

Interest expense 29,631.32 debit

premium on BP      1,868.68 debit

         cash                     31,500  credit

--to reocrd first interest payment--

Interest expense 29,556.57 debit

premium on BP      1,943.43 debit

     interest payable          31,500  credit

--to record accrued interest at year-end on BP--

Explanation:

procceds                      740,783

face value                <u>     700,000    </u>

premium on bonds payable 40,783

When comparing, the firm received more than the face value hence, there is a premium on the bonds as the coupon payment are above the market rate.

Now, the interest will be calculate as follow:

carrying value x market rate:

740,783 x 0.08/2 = 29,631.32 interest expense

cash outlay:

700,000 x 0.09/2 = 31,500

amortization on premium (difference) 1,868.68

new carrying value: 740,783 - 1,868,68 = 738,914

second payment accrual:

738,914 x 0.04 = 29,556.57

cash outlay                  31500

amortization    1,943.43

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The country that is being described in the statement given above is Hong Kong as they are considered as a newly industrializing country in which they have the capabilities of competing in regards with electronics and to specialize in the category of trade and banking.

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