Answer:
The answer is: Today you could accept any lump sum ≥ $111,144.18
Explanation:
First we must calculate the present value of the three cash flows. We can do it manually or in an excel spreadsheet using the PV formula.
Using an excel spreadsheet the present value is $111,144.18
Today you could accept any lump sum ≥ $111,144.18
You can do this calculation manually also:
pv = [$36,000 / (1 + 7%)] + [$42,000 / (1 + 7%)²] + [$50,000 / (1 + 7%)³] = $111,114.18
Answer:
$41.56
Explanation:
Since Antiques' dividends have a negative growth rate, we must adjust the perpetuity growth formula to recognize that negative growth:
stock price = [dividend (1 + growth rate)] / (required rate of return - growth rate)
- dividend = $7
- growth rate = -5%
- required rate of return = 11%
stock price = [$7 (1 - 5%)] / (11% - -5%) = ($7 x 95%) / 16% = $6.65 / 16% = $41.56
Answer:
economic responsibility.
Explanation:
Layton has decided to donate a portion if his business Music Box earning's to a charity every year. His action of making donation decision is of economic responsibility. The decision is made to help out community in a good faith and is considered as social responsibility as Layton does not have any legal responsibility to make charity but still he decides to serve the society through his business earnings.
Answer:
A) the factor whose price has increased will decrease, but the demand for the other factors
Explanation:
The production of goods and services in an economy comes from the combination of factors of production, for example labor and machinery. When the price of one of the factors of production increases, the quantity demanded by that factor will decrease, since there will be a rearrangement in production to alter the necessary composition between the factors in the production of a good. In other words, one factor will be replaced by another as much as possible.
For example, if the shoe production uses 2 machines and 10 workers. If the price of labor increases, the company may invest in buying one more machine and reducing the number of workers to 5.
B. positive externalities, whereas the use of common resources gives rise to negative externalities
