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slega [8]
3 years ago
9

In two years, you will receive the 1st payment from an irrevocable trust your grandparents set up. The trust is set up make paym

ents forever. The appropriate discount rate is 2.0%. The 1st payment is for $500 and the payments will increase by 1.0% per year every year thereafter. The present value of all the future trust payments is closest to:
Business
1 answer:
NikAS [45]3 years ago
6 0

Answer:

$50,000

Explanation:

Note: There is an assumption that the payment is yearly payment & is received at the end of every year

Present Value of Perpetuity = Payment Receivable in 1st year/ (Discount rate - Growth rate)

Present Value of Perpetuity = 500/(2%-1%)

Present Value of Perpetuity = 500/0.01

Present Value of Perpetuity = $50,000

So, the present value of all the future trust payments is closest to $50,000

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FORco, a country F corporation, wants to open a sales office in the United States. FORco does not form a U.S. subsidiary, but in
wariber [46]

Answer:

C. Subject to 30% withholding tax under the Branch Interest Withholding tax rules.

Explanation:

Options are <em>"A. No interest withholding as the interest is deemed paid by the foreign corporation, since the U.S. branch is not a U.S. corporation. B. No interest withholding tax since the recipient of the interest is a foreign corporation. C. Subject to 30% withholding tax under the Branch Interest Withholding tax rules. D. Subject to 15% withholding tax under the Branch Profits tax rules. Reset Selection"</em>

The interest payment will be subject to 30% withholding tax under the Branch Interest Withholding tax rules. Interest paid by a branch's U.S. trade or business, is considered U.S. source income and is subject to U.S. withholding tax at a rate of 30%, unless the tax is reduced or eliminated by a specific treaty or Code provision.

6 0
3 years ago
Facing stiff competition, Hendrix College, a small liberal arts institution in Conway, Ark., decided two years ago to bolster it
Marianna [84]

Answer:

Inelastic

Explanation:

Price elasticity of demand (PED) is the proportional change in quantity demanded of a good or service if the price changes by 1%. The PED is calculated by dividing the percentage change in quantity demanded by the negative percentage change in price.

PED = 37% / -25% = -1.48 inelastic

If PED > 1, elastic demand

If PED < 1, inelastic demand

If PED = 1, unitary demand

6 0
4 years ago
Jiffy Co. expects to pay a dividend of $3.00 per share in one year. The current price of Jiffy common stock is $60 per share. Wh
STALIN [3.7K]

Answer:

the cost of the internal common equity is 14%

Explanation:

The computation of the cost of internal common equity is shown below;

Stock Price = Dividend per share ÷ (required rate of return - growth rate)

$60 = $3 ÷ (required rate of return - 0.09)

60 required return - $5.4 = $3

60 required return = $8.4

So, the required return is

= 8.4 ÷ 60

= 14%

Hence, the cost of the internal common equity is 14%

5 0
3 years ago
Kameron Gibson’s bank statement showed a balance of $1,020.35. Kameron’s checkbook had a balance of $282.10. Check No. 104 for $
Aleks [24]

Answer:

Prepare Kameron Gibson’s bank reconciliation.

Cash  282,1

 

Books  

Payroll Check       1260,9

Checks written  150,7

Checks written  16,35

Deposit not in stat. -666,6

 

Banks  

Bank service fee  -12,4

NSF Check         -10,7

 

Bank conciliation  1020,35

Bank account                 1020,35

Explanation:

Cash  282,1

 

Books  

Payroll Check       1260,9

Checks written  150,7

Checks written  16,35

Deposit not in stat. -666,6

 

Banks  

Bank service fee  -12,4

NSF Check         -10,7

 

Bank conciliation  1020,35

Bank account                 1020,35

5 0
3 years ago
What is quotas in business?
Pie
<span>A quota is a government-imposed trade restriction that restricts the number, or monetary value, of goods that can be imported or exported during a particular time period. Quotas are used in international trade to help regulate the volume of trade between countries.</span>
7 0
4 years ago
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