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choli [55]
3 years ago
10

Derek has the opportunity to buy a money machine today. The money machine will pay Derek $17,852.00 exactly 3.00 years from toda

y. Assuming that Derek believes the appropriate discount rate is 9.00%, how much is he willing to pay for this money machine?
Business
1 answer:
djverab [1.8K]3 years ago
6 0

Answer:

$13,785

Explanation:

The computation of the amount to be paid for the money machine is shown below:

As we know that

Present value = Future value ÷ (1 + rate of interest)^number of years

= $17,852 ÷ (1 + 0.09)^3

= $17,852 ÷ 1.09^3

= $13,785

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Explanation:

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2 years ago
On January 3, 2019, Carey discovers his diamond bracelet has been stolen. The bracelet had a fair market value and adjusted basi
Mama L [17]

Answer: $1,900

Explanation:

Theft loss deduction is calculated by adjusting the fair market value of the asset for a theft loss floor limitation of $100 and 10% of the person's AGI.

Theft loss deduction is:

= Fair value -Theft floor limitation - 10% of AGI

= 7,000 - 100 - (10% * 50,000)

= $1,900

3 0
3 years ago
Suppose that France and Austria both produce rye and wine. France's opportunity cost of producing a bottle of wine is 4 bushels
miv72 [106K]

Answer:

France has comparative advantage in production of wine

Austria has comparative advantage in production of rye.

4 bushels of rye for each bottle of wine

1 bottle of wine for each bushel.

b. 4 bushel of rye per bottle of wine.

Explanation:

France has comparative advantage in producing wine as it has opportunity cost of 4 bushels per bottle of wine. Austria has comparative advantage in producing bushels as it has opportunity cost of 10 bushels per bottle of wine. The both countries can gain advantage if they agree for 4 bushels per wine.

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3 years ago
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8 0
3 years ago
Read 2 more answers
The Anson Jackson Court (AJC) currently has $150,000 market value (and book value) of perpetual debt outstanding carrying a coup
ch4aika [34]

Answer:

d. $750,000; 8.9%

Explanation:

The computation is shown below:

A. Current Total Market Value          

Current market value of debt $150,000         The  Current market value of equity $600,000 (10,000 shares × $60)      Market Value  $750,000        

B. Weighted Average Cost of Capital (WACC)         WACC = {Equity ÷ (Equity + Debt) × Cost of Equity} + {Debt ÷ ( Equity + Debt ) × Cost of Debt × (1 - 25%)}

= {$600,000 ÷ ($600,000 + $150,000) × 10%}  + {$150,000 ÷ ($600,000 + $150,000) × 6% × 0.75}  

= ($600,000 ÷ $750,000) × 10% + ($150,000 ÷ $750,000) × 6% × 0.75            = 0.08 + 0.009          

= 8.90%          

Hence, the correct option is D. $7,50,000 ; 8.90%        

3 0
3 years ago
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