Answer:
$62,267.91
Explanation:
first we must calculate the interest rate = 10% + 6% + (10% x 6%) = 16.6%
now we can use the present value formula:
present value = future value / (1 + rate)ⁿ
present values for:
- cash flow year 0 = $17,100
- cash flow year 3 = $46,500/1.166³ = $29,333.06
- cash flow year 4 = $12,300/1.166⁴ = $6,654.43
- cash flow year 7 = $26,900/1.166⁷ = $9,180.42
total present value = $62,267.91
Answer:
$500,000
Explanation:
in order to calculate the value you should determine the expected return or sales price of the land = price of land x probability of sale
In this case, you have two offers and apparently you haven't decided which to choose, so the expected return = ($400,000 x 50%) + ($600,000 x 50%) = $200,000 + $300,000 = $500,000
Answer:
b. $50,000 and $250,000.
Explanation:
The computation is shown below:
The required reserve is
= Check-able-deposit liabilities × reserve ratio
= $500,000 × 20%
= $100,000
The excess reserves is
= Actual reserves - required reserves
= $150,000 - $100,000
= $50,000
And, the amount that increase the loan is
= Excess reserves ÷ reserve ratio
= $50,000 ÷ 20%
= $250,000
The lender is bearing the risk on defaulting the loan
