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3 years ago

BUSI 113 Fall 2020

Business

1 answer:

Hunter-Best [27]3 years ago

6 0

Answer:

Full data set

Frequency

Identify the class width class midpoints, and class boundaries for the given

Explanation:

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Chris has three options for settling an insurance claim. Option A will provide $1,500 a month for 6 years. Option B will pay $1,

Papessa [141]

Answer:

Option B. $1,025 a month for 10 years.

Explanation:

Calculate the present value of each option:

$\text{Monthly rate: } 6.8\%/12 = 0.068/12 = 0.005\overline 6$

Formula:

$PV=C\times \bigg[\dfrac{1}{r}-\dfrac{1}{r(1+r)^t}\bigg]$

Where:

PV is the present value of the constant monthly payments
r is the monthly rate
t is the number of moths

1. Option A will provide $1,500 a month for 6 years.

$PV=$\ 1,500\times \bigg[\dfrac{1}{(0.005\overline 6}-\dfrac{1}{0.005\overline 6(1+0.005\overline 6)^{(6\times12)}}\bigg]$

$PV=\$ 88,479.23$

2. Option B will pay $1,025 a month for 10 years. 

$PV=$\ 1,025\times \bigg[\dfrac{1}{(0.005\overline 6}-\dfrac{1}{0.005\overline 6(1+0.005\overline 6)^{(10\times12)}}\bigg]$

$PV=\$ 89,068.22$

3. Option C offers $85,000 as a lump sum payment today.

PV = $85,000

<h2 /><h2> Conclusion:</h2>

The present value of the option B, $1,025 a month for 10 years, has a the greatest present value, thus since he is only concerned with the financial aspects of the offier, this is the one he should select.

3 0

3 years ago

Albright Company produces a variety of products, some in labor-intensive departments and some in heavily automated departments.

Elodia [21]

The given statement is TRUE

Explanation:

The global overhead rate is a standard overhead rate used by a company to transfer all of its overhead cost for production to goods or objects of cost. It is most widely used with simple cost models in smaller businesses.

In fact, the typical company prevents the use of a single overhead rate throughout the whole plane, instead using a small number of separately allocated cost pools with different overhead rates. In this way, the overall assignment is improved, but the time necessary to close the books is increased. There is a balance between a larger transparency effort to track and distribute multiple expense pools and the improved consistency of this additional effort in the financial statement.

3 0

4 years ago

Which of the following comes closest to the value at the end of year 6 of investing $600 today (year 0) and then investing anoth

cestrela7 [59]

Answer:

The correct answer is B.

Explanation:

Giving the following information:

Investment= $600 today and $600 at the end of year 5

Interest rate= 3%

To calculate the final value, we need to apply the following formula on each investment:

FV= PV*(1+i)^n

FV= 600*(1.03^6)= $716.43

FV= 600*(1.03^1)= $618

Total FV= $1,334.43

5 0

3 years ago

Copper Corporation owns stock in Bronze Corporation and has net operating income of $900,000 for the year. Bronze Corporation pa

kow [346]

Answer:

C) $120,000

Explanation:

Since Copper corporation owns 65% of Bronze Corporation, its dividends received deduction (DRD) is 80% of the dividends received.

stake at another corporation is less than 20%, DRD = 70%
stake at another corporation is between 20% to 80%, DRD = 80% (Copper's case)
stake at another corporation is higher than 80%, DRD = 100%

Therefore, if Copper received $150,000 in dividends from Bronze, it can deduct 80% of that amount = 80% x $150,000 = $120,000

8 0

3 years ago

John Wiggins is considering the purchase of a small restaurant. The purchase price listed by the seller is $890,000. John has us

Phantasy [73]

Answer:

$763,057

Explanation:

Present value is the sum of discounted cash flows

Present value can be calculated using a financial calculator

Cash flow in year 1-6 = $89,000

Cash flow in year 7 = 79,000

Cash flow in year 8 = 69,000

Cash flow in year 9= 59,000

Cash flow in year 10 = 49,000 + $790,000 = 839,000

I = 11%

Present value = $763,057

To find the PV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

8 0

4 years ago