Answer:
NPV is positive,the project should be accepted
Explanation:
In determining whether or not the project should be accepted ,we need to ascertain the Net Present value of the project which is present value of cash inflows of $13,000 for 35 years minus the initial investment of $125,374.60 committed today.
The annuity factor for 8% for 35 year horizon is 11.6546 using annuity table.
Present of cash inflow=cash inflow*annuity factor=$13,000*11.6546=$151,509.80
Net present value=$ 151,509.80-$125,374.60=$ 26,135.20
The investment has a positive NPV,hence should be accepted
<span>This type of policy will change living benefits to taxable
as ordinary income, in contrast to non-taxable living benefits that are found
in life insurance.
A modified endowment contract</span> (MEC) refers to a
tax requirement of a life insurance policy where the policy has been financed
with more money than the money which is accepted under federal laws.
Answer:
The answers are:
1. nonprogrammed decision
2. programmed decision
3. nonprogrammed decision
4. programmed decision
Explanation:
Programmed decisions are decisions for which the decision maker has developed certain set of guiding rules for, over time, as a result of repetition. Here the results can be predicted with a reasonable degree of accuracy, because the situations surrounding the circumstances are well known. In our example, feeding the puppy overtime has become routine, hence it is a programmed decision, also, the choice of tea at Starbucks is a programmed decision because you know what to expect and that is because you have tried the other varieties and come to a conclusion on the choices to be made which is well understood.
On the contrary, a nonprogrammed or nonroutine decision is a decision that is based on circumstances that are not entirely predictable to a reasonable extent. The structure of the circumstances surrounding the decision to be made is not well understood. There are so many "what ifs". These decisions can be said to be novel, and they are not routine. In our example, the choice of the constructor to use for your kitchen design and the decision by the accounting firm on whether to renew the lease or relocate are nonprogrammed because these decisions are not everyday decisions and the decision makers are not certain what the outcomes will be depending on the choices they make, if they will eventually regret it or not.
Answer:
$9,249 for three months, $18,498 for six months.
Explanation:
Experts recommend that an emergency fund should include 3 to 6 months of cash to provide for living expenses.
The Potinsky household spends $37,000 annually, therefore, it spends $3,083 monthly ($37,000 / 12).
For a three-month emergency fund = $3,083 x 3
= $9,249
For a six-month emergency fund = $3,083 x 6
= $18,498
