Some of the nation's economists believe that to maximize government revenue, the tax rate should be raised to the level of the R
1 answer:
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Answer:
The investment that will have the highest future value is option b.
Explanation:
First lets suposse the effective annual rate is 10%
a. Future value= $2,500
c. First you must obtain the net present value of all cash flows with the formula attached, for example:
NVP= ($250/(1+10%)^1)+($250/(1+10%^2)+($250/(1+10%^3)... and so on until year 10
With the excel formula "NPV" you can calculate the net present value specifying the interest rate, the cash flows.
The NPV= $1,536.14
And then you calculate the future value of this answer with this formula:
VF=VP(1+i)^n
VF= $1,536.14*(1+10%)^10
VF=$3,984.36
b. If payments are due at the beginning of every year means that at year 0 you start with $250. You must calculate the NPV in this way
NPV= $250+($250/(1+10%)^1)+ )+($250/(1+10%^2)+($250/(1+10%^3)... and so on until year 10
NPV= $1,786,14
And then you calculate the future value of this answer:
VF= $1,786,14*(1+10%)^10
VF=$4,632.79
d. First, you must convert the annual interest rate into semi-annually interest
10% Annually effective is 4,88% Semi-anually effective
NPV=$125+($125/(1+4,88%)^1)+ )+($125/(1+4,88%^2)+($125/(1+4,88%^3)... and so on until period 20
NPV=$1,698.75
And then you calculate the future value of this answer:
VF= $1,698 *(1+10%)^10
VF=$4,405.37
The investment that will have the highest future value is option b.
Answer:
TRUE
Explanation:
When supply is perfectly inelastic, the supply curve is vertical as shown in the attached plot. Thus, the tax that shifts the supply curve upward would have no effect on the equilibrium quantity or price paid by consumers. Since equilibrium quantity or price paid by consumer don't change there's no burden on them. However, no team's owners would receive a lower after tax price and thus bearing the entire tax burden.
