1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
meriva
3 years ago
9

You are running a hot Internet company. Analysts predict that its earnings will grow at 30% per year for the next five years. Af

ter that, as competition increases, earnings growth is expected to slow to 2% per year and continue at that level forever. Your company has just announced earnings of $1,000,000. What is the present value of all future earnings if the interest rate is 8%
Business
1 answer:
Andrej [43]3 years ago
8 0

Answer:

The present value of the future earnings is $51,981,214.36

Explanation:

The present value of the earning can be calculated by discounting the earnings for the next five years along with calculating the terminal value of earnings at the end of the five years when the growth rate in earnings becomes constant and discounting it back to the present value.

Taking the value in millions,

Present Value = 1 * (1+0.3) / (1+0.08)  +  1 * (1+0.3)^2 / (1+0.08)^2  +  

1 * (1+0.3)^3 / (1+0.08)^3  +  1 * (1+0.3)^4 / (1+0.08)^4  +  1 * (1+0.3)^5 / (1+0.08)^5  + [( 1 * (1+0.3)^5 * (1+0.02) / (0.08 - 0.02)) / (1+0.08)^5]

Present value = $51.98121436 million or $51,981,214.36

You might be interested in
According to McClelland's research, the need for achievement is
Pepsi [2]

Answer:

the need that drives a person to work and even struggle for the objective that he wants to achieve

Explanation:

4 0
2 years ago
Say the marginal tax rate is 20 percent and that government expenditures do not also that the economy is at potential output and
Readme [11.4K]

<u>Solution and Explanation:</u>

a) The deficit is structural deficit, not cyclical deficit

b) Structural deficit is $450 billion

Revenue less than outlays; the GDP = Potential GDP

cyclical - during a recession , Structural - normal times

This is the budget deficit at potential GDP

Structural deficit = Total Government deficit - Cyclical Deficit

Government expenditures do not change with output

c) the deficit is both structural and cyclical

200 billion below potential; at potential output it will be 200 billion higher

Cyclical deficit = $200 billion

Structural = 450 - 200 = 250

d) Cyclical surplus = $350 billion

Structural deficit = $100 billion

e) Structural as normal stabilization policies will not remove a structural deficit

5 0
3 years ago
A start-up company has developed some innovative products, but it has no marketing or advertising expertise. It hired The Tullen
rewona [7]

The Tullen Group is an example of a marketing intermediary as it is hired to design an advertising campaign that includes creating a web presence.

<h3>What is a marketing intermediary?</h3>

This refers to those independent firms that assist firms in the flow of goods and services from producers to end-users.

A typical example of a marketing intermediary includes:

  • the agents
  • the wholesalers
  • the retailers.

Also, these intermediary also functions as a link between manufacturers and customers in the distribution of products.

Hence, the Tullen Group is an example of a marketing intermediary as it is hired to design an advertising campaign that includes creating a web presence.

Read more about marketing intermediary

brainly.com/question/25689913

#SPJ1

8 0
2 years ago
The following information should be used to according to the provisions of GAAP (Statement of Cash Flows) and using the followin
yanalaym [24]

Answer:

                   

Explanation:

3 0
3 years ago
What type of analytics is best described with a report that includes charts and graphs explaining the data
Alisiya [41]

Descriptive analytics is best described with a report that includes charts and graphs explaining the data.

<h3>What Is Descriptive Analytics?</h3>

The interpretation of historical data through descriptive analytics helps to better comprehend changes that have taken place in a firm. The process of using a variety of historical data to make comparisons is known as descriptive analytics.

In contrast to the complicated calculations required for predictive and prescriptive analytics, descriptive analytics typically uses simple math and statistical methods, such as arithmetic, averages, and percent changes. Since results are presented using visual tools like line graphs, pie, and bar charts, descriptive analytics may - and should - be easily comprehended by a broad corporate audience.

Therefore, a report with charts and graphs illuminating the data is the best way to describe descriptive analytics.

To know more about prescriptive analytics refer to: brainly.com/question/14392964

#SPJ4

8 0
2 years ago
Other questions:
  • Ajax takes advantage of ________ scripting to make applications more responsive.
    15·1 answer
  • At her neighbor's garage sale, Constance buys a vanity dressing table from her neighbor, Carlos, for $160. Constance purchased t
    13·1 answer
  • What commodities are grown for a purpose other than food?
    15·1 answer
  • Approximately ________ workers each year are treated for injuries caused by lifts, jacks, or jack stands.
    6·1 answer
  • The animated film is a comedy adventure about a 78-year-old balloon salesman named Carl Fredricksen who reflects on his childhoo
    6·1 answer
  • An investment of ​$93000 was made by a business club. The investment was split into three parts and lasted for one year. The fir
    13·1 answer
  • Preparing an Ending Finished Goods Inventory Budget Andrews Company manufactures a line of office chairs. Each chair takes $14 o
    13·2 answers
  • The Puyer Corporation makes and sells only one product called a Deb. The company is in the process of preparing its Selling and
    14·1 answer
  • Garcia Co. sells snowboards. Each snowboard requires direct materials of $113, direct labor of $43, and variable overhead of $58
    11·1 answer
  • Salads 'R' Us requires all its franchisees to sign an agreement that they will use napkins and dressings purchased from Salads '
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!