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
Lunna [17]
3 years ago
7

A friend wants to borrow money from you. He states that he will pay you $2,700 every 6 months for 9 years with the first payment

exactly 5 years and six months from today. The interest rate is an APR of 7.3 percent with semiannual compounding. What is the value of the payments today?
Business
1 answer:
Travka [436]3 years ago
5 0

Answer:

The value of the payment today = $36,539.65

Explanation:

<em>An annuity is a series of equal payment or receipt occurring for certain number of period. </em>

<em>The payment in question is an example of an annuity .Hence the value of the payment today would be the present value of 2,700 annuity discounted at the appropriate interest rate </em>.

This is done as follows:

The Present Value of annuity = A ×  (1- (1+r)^(-n))/r

A- periodic cash flow-2,700, r- semi annual rate of interest - 7.3/2= 3.65%

n- number of period- (9×2) + 1= 19. Note that we have 19 "six months" in 9 years 6 months

PV = 2,700 × (1- (1+0.0365)^(-19))/0.0365 =36,539.650

The value of the payment today = $36,539.65

You might be interested in
A company is considering the purchase of a new machine for $49,000. Management predicts that the machine can produce sales of $1
sergejj [24]

Answer:

7.47 years

Explanation:

Payback period calculates the amount of the time it takes to recover the amount invested in a project from its cumulative cash flows.

= amount invested / cash flows

To derive cash flow: (S - C - D) x (1 - t) + D

S = sales = $16,100

C = Cost of goods sold = $7,900

D = deprecation = $4,100

T = tax = 40%

$16,100 - $7,900 - $4,100 = $4100

$4100 × 0.6 = $2460

$2460 + $4,100 = $6560

$49,000 / $6560 = 7.47 years

I hope my answer helps you

6 0
3 years ago
Which of the following statements about government regulation of business is true?
Norma-Jean [14]

there are no statements listed

3 0
2 years ago
Read 2 more answers
Attorneys' fees, entrance fees, train fares, and organization dues are all:_______
Tom [10]

Answer:

d. synonyms for price.

Explanation:

All the stated items (attorney fees, entrance fees, train fares, and organisation dues) are all prices.

Price is the amount that is paid for a particular good or service performed.

When fixing a price usually there is an offer and acceptance of the amount to be paid for goods or services.

Also payment can be made upfront like the case of train fare. While in other instances payment may be deferred as is seen in attorney fees and organisation dues.

Price can also change when one party grants concession to the other, for example loan rebate where the debtor is given price relief.

3 0
3 years ago
volume_upclosed_captiondescriptionfullscreen According to Mikey, the founder of Holden Outerwear, manufacturing products at five
Ad libitum [116K]

Answer: a. increased paperwork at every step of the shipping process.

Explanation:

There is no excerpt attached but this should be the answer.

Having five different factories in China means that Holden Outwear would have to transport things to and fro all five factories including raw materials, intermediate goods and finished goods.

This represents a lot of shipping and shipping comes with paperwork. It would therefore be no surprise if the Holden Outwear is having to go through the bane of increased paperwork for manufacturing at five different factories.

6 0
3 years ago
A _______ lease covers the landlord's expected increases in expenses by increasing the rent on an annual basis over the life of
Sveta_85 [38]

A step lease covers the landlord's expected increases in expenses by increasing the rent on an annual basis over the life of the agreement.

4 0
3 years ago
Read 2 more answers
Other questions:
  • Hache Corporation uses the weighted-average method in its process costing system. The first processing department, the Welding D
    7·1 answer
  • BEST ANSWER WILL GET BRAINLIST PLZ HELP MEE
    13·1 answer
  • The Burgers 4 Upper U Restaurant Group supplies its franchise restaurants with many​ pre-manufactured ingredients​ (such as bags
    11·1 answer
  • Ingraham Inc. currently has $320,000 in accounts receivable, and its days sales outstanding (DSO) is 63 days. It wants to reduce
    7·1 answer
  • Lasseter Corporation has provided its contribution format income statement for August. The company produces and sells a single p
    15·1 answer
  • Tammy is talented at craft but lacks the cash flow management skills required to run a business. She opens a store, Tammy's Craf
    12·1 answer
  • Identify at least three ways in which the company sought to differentiate itself from rival jewelry firms.
    11·1 answer
  • Peterson Photoshop sold $1,900 in gift cards on a special promotion on October 15, 2021, and sold $2,850 in gift cards on anothe
    11·1 answer
  • Actual overhead costs may not be proportional to the actual amount of the allocation base used because ______.
    9·1 answer
  • A firm has total debt of $1,380 and a debt-equity ratio of .23. what is the value of the total assets?
    7·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!