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elena-14-01-66 [18.8K]
3 years ago
8

g invested $800,000 in a new CNC hot wire cutting machine. They intend to sell foam products fabricated using this machine. At a

n interest rate of 12% per year compounded quarterly, the quarterly income required to recover the investment in 3 years is (choose closet answer):
Business
1 answer:
lara31 [8.8K]3 years ago
7 0

Answer:

Quarterly income = $ 36,643.03

Explanation:

The quarterly income ca be determined using the present value of the annuity technique.

The Present Value of the annuity technique

PV = A × ((1- (1+r)^(-n)/r

A- quarterly payment, n- number of quarters, quarterly rate, PV - Present of investment

A- ?  n -3× 12= 36, r-12%/4= 3%

800,000 = A×  (1- (1.03)^(-36)

800,000 = A×  (1- (1.03)^(-36)

800,000 = A × 21.8322525

A = 800,000/21.8322525

A= 36,643.03

Quarterly income = $ 36,643.03

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Complete question:

Perch Co. acquired 80% of the common stock of Float Corp. for $1,600,000. The fair value of Float's net assets was $1,850,000, and the book value was $1,500,000. The non-controlling interest shares of Float Corp. are not actively traded. What amount of goodwill should be attributed to the non-controlling interest at the date of acquisition?

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Solution:

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Answer:

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