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Irina-Kira [14]
2 years ago
7

Revenue is $6,000,000 the first year. You anticipate that it will increase by 6% a year for the subsequent 5 years. Assume an in

terest rate of 6%, compounded annually. What is the present value of revenue
Business
1 answer:
Maurinko [17]2 years ago
7 0

Answer:

$28,301.886.79

Explanation:

Present value is the sum of discounted cash flows

Present value can be calculated using a financial calculator

Cash flow in year 1 = $6,000,000

Cash flow in year 2 = $6,000,000 x 1.06 = 6,360,000

Cash flow in year 3 = $6,000,000 x 1.06^2 = 6,741,600

Cash flow in year 4 = $6,000,000 x 1.06^3 = 7,146,096

Cash flow in year 5 = $6,000,000 x 1.06^4 = 7574,861.76

I = 6%

PV = $28,301.886.79

To find the PV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.  

3. Press compute  

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Why is 'task complexity' an issue in the process of goal setting?
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4 0
3 years ago
A competitive firm currently produces and sells 7,500 units of output at a price of $2.50 per unit. The firm's average fixed cos
saveliy_v [14]

Answer:

A. $-2,250

B. The firm should continue to operate in the short run because price is greater than average variable cost

C.The firm should exit in the long run because it is making losses

D. In the long run, prices would increase because in a competitive firm, price must equal average cost. As firms exit the industry, supply would fall and this would lead to an excess of demand over supply. As a result, price would rise

Explanation:

A perfect competition is characterised by many buyers and sellers of homogenous goods and services. Market prices are set by the forces of demand and supply. There are no barriers to entry or exit of firms into the industry.

In the long run, firms earn zero economic profit. If in the short run firms are earning economic profit, in the long run firms would enter into the industry. This would drive economic profit to zero.

Also, if in the short run, firms are earning economic loss, in the long run, firms would exit the industry until economic profit falls to zero.

Profit = Total revenue - Total cost

( $2.50 -  $2.80) × 7,500 = $-2,250

The firm is earning a loss

A firm should shutdown in the short run if price is less than average variable cost.

Average variable cost = average total cost- average total cost

 $2.80 - $0.75 = $2.05

2.50 > 2.05 so the firm should continue to operate in the short run.

The firm should exit in the long run because it is making losses

In the long run, prices would increase because in a competitive firm, price must equal average cost

I hope my answer helps you.

3 0
3 years ago
Many people who want to start investing for their future want to start today, which implies an annuity stream that is paid at th
navik [9.2K]

Answer:

b. annuities due

Explanation:

Annuities due -

It refers to the amount which need to be paid at the regular interval of time , just before the beginning of the new phase , is referred to as annuities due .

The most common example of annuities due is rent , which need to be paid after every month in the starting .

Hence , from the given information of the question ,

The correct option is annuities due.

4 0
3 years ago
How do I get gud at craft
irakobra [83]

Answer:

practice at least two times per day

3 0
2 years ago
Read 2 more answers
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