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Sliva [168]
2 years ago
5

The CFO of the company believes that an appropriate annual interest rate on this investment is 4%. What is the present value of

this uneven cash flow stream, rounded to the nearest whole dollar?
$1, 625,000
$1, 685, 335
$1, 975,000
$600,000
Identify whether the situations described in the following table are examples of uneven cash flows or annuity payments:
Description Uneven Cash Flows Annuity You recently moved to a new apartment and signed a contract to pay monthly rent to your landlord for a year.
SOE Corp. hires an average of 10 people every year and matches the contribution of each employee toward his or her retirement fund.
Franklinia Venture Capital (FVC) invested in a budding entrepreneur's restaurant. The restaurant owner promises to pay FVC 10% of the profit each month for the next 10 years.
You have committed to deposit $600 in a fixed interest-bearing account every quarter for four years.
Business
1 answer:
irinina [24]2 years ago
6 0

Answer:

Present value of the cash flows = $1,625,000 /1.04 + $1,685,335/1.04  + $1,975,000/1.04 + $600,000/1.04 = $5,389,337.27

You recently moved to a new apartment and signed a contract to pay monthly rent to your landlord for a year.  ⇒ ANNUITY

SOE Corp. hires an average of 10 people every year and matches the contribution of each employee toward his or her retirement fund.  ⇒ UNEVEN CASH FLOW (EACH EMPLOYEE'S SALARY VARIES, SO THE TOTAL EXPENSE ALSO VARIES)

Franklinia Venture Capital (FVC) invested in a budding entrepreneur's restaurant. The restaurant owner promises to pay FVC 10% of the profit each month for the next 10 years.  ⇒ UNEVEN CASH FLOW (PROFITS ARE NOT IDENTICAL FORM ONE PERIOD TO ANOTHER)

You have committed to deposit $600 in a fixed interest-bearing account every quarter for four years. ⇒ ANNUITY

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Roman55 [17]

Hello there!

A real estate developer job is to get houses to sell them, get land to build houses and sell them, and get previous owned houses and sell them. They pretty much get property and sell it. As a real estate developer, the main goal that someone should have is to <u>make more money than they paid for the property</u>. This means that they would need to be making profit in order to really see a progress in income.

Let's give you an example when a real estate developer buys a house:

Johan, a real estate developer, bought a house $275,000. He then goes on a website and advertises the house for $285,000.

What Johan is trying to do here is make profit form the house he just purchased, since the extra money he will be getting if the house is sold will be a surplus to the original amount.

Let's give you an example when a real estate developer buys land:

Susan buys 1 acre of land for $1.2 million, she then has a construction crew build a house, and that costed her $750,000.

At the end of the day, Susan spent $1.95 million (1,950,000) on the house in total.

She then sells the house on a website for $2.5 million (2,500,000).

This means that Susan made a surplus of $550,000 from the price she originally payed for.

It's best when a real estate developer sells property for more than what they payed for, so they would be making profit (extra money). It's bad when a real estate developer tries to sell a house for lower than they originally payed for, then they would be losing money. That's why when there is a specific price for a house, a real estate developer usually doesn't want to drop the price of the house any cheaper; they want to stick with their price so they could make money.

A real estate developer could also start their own company, and make more profit if they stick to the trick of selling the property for more than what they paid for. If they stick to the trick, then they would be making even more money since they would have multiple people in a company doing it all at once, in different places too.

4 0
3 years ago
.Daniel’s team had to analyze the last two vendors across four categories. Which basic characteristic groups of the potential pr
ziro4ka [17]

Answer:

Daniel’s team had to decide the vendor on the following attributes that should be analyzed:  

  1. Innovation :- Credit Issue Group is a money related assistance organization and henceforth the seller needs to have a decent mechanical base to furnish with organization with required administrations on schedule and best in quality.  
  2. Exclusivity: Considering the significance of the administrations, organization may take a gander at the restrictiveness of the administrations that merchant can offer to Credit Issue.  
  3. Complimentary Services offering:- To look if seller has some other contributions to make to the customer that might be complimentary with the fundamental administrations advertised. This can save money on schedule and authoritative work.  
  4. Support:- What support would vendor be able to offer to the organization alongside giving the essential administrations.  
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8 0
3 years ago
How would utility costs be properly classified? Select one: A. Curvilinear B. Fixed C. Variable D. Stepped E. Mixed
ANTONII [103]

Answer: Mixed

Explanation:

Here is the complete question:

Max Machining incurs the following utilities costs at different levels of production:

0 units: $120

500 units: $2,620

1,000 units: $5,120

How would utility costs be properly classified?

A) Curvilinear

B) Variable

C) Mixed

D) Fixed

E) Stepped

The utility cost here will be classified as a mixed cost. A mixed cost is a type of cost that has both fixed and variable cost. At 0 units, $120 was already spent. This shows that this cost is a fixed cost as it doesn't have anything to do with output. It'll still be paid regardless of the number of outputs while the other cost incurred are variable cost which is dependent on the number of outputs of goods.

Based on the explanation above, the answer is mixed cost.

3 0
3 years ago
A corporation can earn 7.5% if it invests in municipal bonds. The corporation can also earn 8.30% (before-tax) by investing in p
Kryger [21]

Answer:

32.13%

Explanation:

The computation of the break-even corporate tax is shown below:

As we know that

Municipal bond return = preferred stock return before tax  × [1 - (1 - dividend exclusion) × Break even corporate tax]

7.5 = 8.30 ×  [1 - ( 1 - 0.70) × Break even corporate tax ]

7.5 ÷ 8.30 = 1 - 0.30 × Break even corporate tax

0.9036 = 1 - 0.30 × Break even corporate tax

0.30 × Break even corporate tax = 1 - 0.9036

So, Break even corporate tax is

= 0.0964 ÷ 0.30

= 32.13%

Basically we applied the above formula

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3 years ago
If a surfboard is produced this year, but not sold until next year, how is it counted in this year's gdp and not next year's?
Natasha_Volkova [10]

The value of the goods produced is recorded for the the current year GDP. The year of production not the year of the sale is where the product being produced needs to be recorded within. If it is sold the following year, the sale will then be recorded in the year it is sold in.

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3 years ago
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