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Andreyy89
3 years ago
11

A company has a pension liability of $440,000,000 that it must pay in 29 in years. If it can earn an annual interest rate of 4%,

how much must it deposit today to fund this liability?
a. $141,086,622.46.
b. $122,766,607.13.
c. $47,049,210.09.
d. $135,660,213.91.
e. $112,973,212.81.
Business
1 answer:
kodGreya [7K]3 years ago
5 0

Answer:

a. $141,086,622.46.

Explanation:

Calculation for how much must it deposit today

Using this formula

Present Value = Future Value / [ ( 1 + r) n]

Where,

Future Value = 440,000,000

r = rate of Interest= 4%

n = Number of years = 29

Let plug in the formula

Present Value = 440,000,000 / [ ( 1 + 0.04)29]

Present Value= 440,000,000 / 3.1186514519

Present Value= $141,086,622.46

Therefore the amount it must deposit today to fund this liability will be $141,086,622.46

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The phrase laissez-faire means which of the following?
Ksivusya [100]
Hey there!

The phrase “laissez-faire” means “Let it be” originally but in the choices you provided In your answers above the closes to it would mostly be ‘to let be’ would be your answer


Answer: B. To let be


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6 0
3 years ago
Diane's Designs purchased a one-year liability insurance policy on March 1 of a year for $8,400 and recorded it as a prepaid exp
Liula [17]

Answer:

$700 (not given in the options)

Explanation:

When the policy is purchased with a payment made in advance, the entries recorded are

Debit prepaid insurance  $8,400

Credit Cash account         $8,400

After the first month, the expense incurred is

= 1/12 × $8,400

= $700

Entries then required

Debit Insurance expense   $700

Credit Prepaid Insurance    $700

5 0
3 years ago
A favorable materials price variance coupled with an unfavorable material usage variance would most likely result from:
Masteriza [31]
The purchase of low-quality materials would most likely the result of a favorable materials price variance coupled with an unfavorable material usage variance. Material price variance is the difference between the cost and the budgeted and actual cost to obtain an object or materials, multiply to the total amount of the product purchased. They are what you called positive value of direct material price and negative value of direct material price. A positive value of direct material price variance is the one that is favorable and it means that the direct material was purchased for a lesser price than the standard price. A negative value of direct material price variance is the one that is unfavorable and it means that more than the expected price per unit is paid.
3 0
3 years ago
Paradise Travels is an all-equity firm that has 6,000 shares of stock outstanding at a market price of $34 a share. The firm's m
xenn [34]

Answer:

$2.38

Explanation:

Number of shares purchased

= $40,000 / $34

= $1,176

EBIT / 6,000 = [EBIT - ($40,000 * 0.07)] / (6,000 - 1176)

EBIT / 6,000 = (EBIT - $2,800) / 4,824

4,824 EBIT = 6000 EBIT - $16,800,000

1,176 EBIT = $16,800,000

EBIT = $14,285.71

Earning per Shares at Break-even level of earning

= [EBIT - ($40,000 * 0.07)] / (6,000 - 1,176)

= ($14,285.71 - $2,800) / 4,824

= $11,485.71 / 4,824

= $2.38

3 0
3 years ago
Taussig Corp.'s bonds currently sell for $1,150. They have a 6.35% annual coupon rate and a 20-year maturity, but they can be ca
mojhsa [17]

Answer:

4.20%

Explanation:

In this question, we use the Rate formula which is shown in the spreadsheet.  

The NPER represents the time period.  

Given that,  

Present value = $1,150

Future value = $1,067.50

Assuming Par value  = $1,000

PMT = 1,000 × 6.35% = $63.50

NPER = 5 years

The formula is shown below:  

= Rate(NPER;PMT;-PV;FV;type)  

The present value come in negative  

So, after solving this, the rate of return is 4.20%

7 0
3 years ago
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