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Zinaida [17]
3 years ago
12

You are an investment manager and one of your clients is a famous soccer player. She is promised to be paid $5million three year

s from now. What is the present value of this cash flow today
Business
1 answer:
gogolik [260]3 years ago
7 0

Answer:

$4,153,268.86

Explanation:

The below is missing from the question:

Your discount rate for real cash flows is 5% APR, compounded monthly and you are expecting inflation of 1.2% per year (APR, annual compounding).

We need to convert the real interest rate to an effective annual rate as shown thus:

EAR=(1+APR/n)^n-1

APR=5%

number of times interest is compounded annually=12

EAR=(1+5%/12)^12-1

EAR=5.12%

Nominal Discount rate = [(1+ Real Discount rate)*(1+Inflation Rate)] - 1

Nominal Discount rate =(1+5.12%)*(1+1.2%)-1

Nominal discount rate=6.38%

Present value=future value/(1+nominal discount rate)^3

future value=$5,000,0000

nominal discount rate=6.38%

n=3 years

PV=$5,000,000/(1+6.38%)^3

PV= $4,153,268.86  

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3 years ago
The way Professor Quinn chose to handle this situation illustrates the difficulty of dealing with ethics violations. Listed as f
alisha [4.7K]

Answer:

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8 0
3 years ago
EA3.
icang [17]

Answer:

3,000 units and 1,950 units

Explanation:

For computing the equivalent units of ending work in process for materials and conversion cost, first we have to determine the ending work in process units which is shown below:

Ending work in process units = Beginning inventory + units started - units completed and transferred

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= 3,000 units

Now the equivalent units of ending work in process for materials would be

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= 3,000 units

And, for conversion cost it would be

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3 0
3 years ago
In a supermarket, a vendor's restocking the shelves every Monday morning is an example of:________
attashe74 [19]

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7 0
3 years ago
The Justice Department refused to approve a merger between office supplier Staples and office supplier Office Depot, a merger th
artcher [175]

Answer:

The correct answer is A) A market share of over 50% from the combined companies

Explanation:

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The merger in the question would result in a 70% market share, way higher than the legal limit, hence it would be denied by the DOJ.

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4 years ago
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