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Nataliya [291]
3 years ago
14

You are considering an investment that will pay you and your heirs $5,000 at the end of each year forever. The price of the inve

stment is $72,000. Given your expertise with time value from Finance 3403, you are concerned that this price may not be fair. If you can earn 8% annually on your money, what would you consider to be a fair price for the investment?
Business
1 answer:
Dmitry [639]3 years ago
8 0

Answer:

Fair price of the insurance policy is $62,500.

Explanation:

We have given that an investment that will pay you and your heirs $5000

So the annual cash flow = $5,000

It is given that you can earn 8 % annually on your money

Required rate of return = 8%

We have to find the fair price for the investment

Price of this annuity =\frac{5000}{0.08}=$62500

Fair price for the investment is $62,500.

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It is one of the nine transaction codes that are associated with sales orders that help organizations deal with sales data, create, alter and display sales orders, displays and monitors lists of sales orders and compare sales and purchase data.

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3 years ago
The registration fee for a used car is 0.8% of the sale price, which is $5,700.How much is the fee? *
insens350 [35]

Answer:

The registration fee for this used car is $45.60.

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7 0
3 years ago
Cytnhia owns antique furniture that she bought for ​$20000 five ago. cost of owning the furniture for the next year. To compute
Leno4ka [110]

Answer:

The correct answer is B. the expected interest rate for the next year and the current value of the furniture.

Explanation:

To compute the cost of owning the furniture for the next year we need 2 bits of information, the expected interest rate for the next year and the current value of the furniture.

As we need the cost of the next year,  we don´t care about the interest we pay in the past. We need what we have to pay in the future.  

And also ,  we need the current value of the antique furniture so we can know the cost of opportunity of running the antique furniture.  ( If we don´t run this business ,  what can we do with that money?)

6 0
3 years ago
Jennifer’s Dress Boutique custom makes wedding gowns, and requires customers to pay in advance for the work performed. When a cu
Aleks04 [339]

Answer:

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