Answer:
The present Value of my winnings = $4,578,716.35
Explanation:
An annuity is a series od annual cash outflows or inflows which payable or receivable for a certain number of periods. If the annual cash flow is expected to increase by a certain percentage yearly, it is called a growing annuity.
To work out the the present value of a growing annuity,
we the formula:
PV = A/(r-g) × (1- (1+g/1+r)^n)
I will break out the formula into two parts to make the workings very clear to follow. So applying this formula, we can work out the present value of the growing annuity (winnings) as follows.
A/(r-g)
= 460,000/(12%-3%)
= $5,111,111.11
(1- (1+g/1+r)^n
1 - (1+3%)/(1+12%)^(27)
=0.8958
PV = A/(r-g) × (1- (1+g/1+r)^n)
$5,111,111.11 × $0.8958
= $4,578,716.35
The present Value of my winnings = $4,578,716.35
Answer:
increased; 3.33 cents
Explanation:
Fixed cost is cost that doesn't vary with unit produced. It remains constant
Average fixed cost = Fixed cost/ output
Average fixed cost last month = $900 / 3000 = $0.3
Average fixed cost this month = $900 / $2700 =$ 0.333
Average fixed cost this month ($0.333) is greater than Average fixed cost last month by $ 0.333 - $ 0.3 = $ 0.033 = 3.33 cents
I hope my answer helps you
