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BlackZzzverrR [31]
3 years ago
10

We will follow-up the basic perpetuity with a delayed perpetuity. Watch the Chapter 5 Part 2 video for an example of a delayed p

erpetuity Consider a perpetuity that pays $800 each year forever with the first payment occuring at the end of year 5. The interest rate is 6.2%. I start by calculating the value of the perpetuity (800 / 0.062) and this is $12,903.2258. Where in the timeline does this value belong
Business
1 answer:
maria [59]3 years ago
4 0

Answer:

At the end of year 4 (one year before the first cash flow)

Explanation:

According to the present value of perpetuity concept here we divided the predicted cash flows by the rate of that period by calculating this it provides the present value that is prior to the cash flow now if we want for more years so we should have to discount over that time period

Since in the given situation the starting of the cash flows is from the ending of year 5 therefore the timeline would be at the closing of year 4 i..e one year prior to the first cash flow

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The average cost of production for a bottle of vitamin water in the industry is $4 while its average price is $7. StoreAll Inc.
VMariaS [17]

Answer:

The correct answer is option A.

Explanation:

The average cost of production for a bottle of vitamin water in the industry is $4 while its average price is $7.

StoreAll Inc. manufactures the same product for $3 per bottle and sells it for $7 per bottle.

The store Inc manufacturers is able to produce at a lower cost than the other firms. This implies that it has a competitive advantage in the production of mineral water.

Competitive advantage refers to the conditions that help a firm outperform its competitors.

8 0
3 years ago
Match each type of savings account with its features. members own it interest rate rises and falls with the market minimal overh
Rudiy27

This is a little hard to read but:

Youth savings - schools often sponsor it

Stock-indexed - rate rises and falls with the market

Credit Union - members own it

Online Account - minimal overhead means higher interest

3 0
3 years ago
Read 2 more answers
Assume that a currency's spot and future prices are the same, and the currency's interest rate is higher than the U.S. rate. The
Andrei [34K]

Answer:

put upward pressure on; put downward pressure on

  • The actions of U.S. investors to lock in this higher foreign return would PUT UPWARD PRESSURE ON the currency's spot rate and PUT DOWNWARD PRESSURE ON the currency's futures price.

Explanation:

If both the spot and the forward price of a currency are the same, it means that it should be worth the same today than in the future. If you can earn higher interest by investing in that foreign currency, then investors will start purchasing higher amounts of the foreign in order to invest and gain higher rates.

Since the demand for the foreign currency increases, that put upward pressure its current price. Simply more investors will want to invest in that currency. While that happens right now, the market will tend to adjust to correct this arbitrage, and the way this can be adjusted is by lowering the future price of the currency. That puts downward pressure on the forward rate.

3 0
3 years ago
For incentive pay to motivate employees to contribute to the organization's success, the pay plans must be well designed. Which
olga nikolaevna [1]

Answer:

C. Employees value the rewards or incentives that are being offered

Explanation:

Let's see the different options for answer...

<u>A. Performance measures are to be linked to the individual's goals</u>

No.  Even if the performance measures should be linked to the individual's goals, just the mere existence of such KPI is not sufficient to motivate employees.   There has to be some performance reward attached to it.

<u>B. Employees are given very broad performance goals</u>

No. To get a good performance and motivate employees, they must be given clear goals and objectives.

<u>C. Employees value the rewards or incentives that are being offered</u>

Yes.  Even if you have good performance measurements, with realistic goals, the employees won't be motivated to reach those goals if the reward doesn't worth the effort.

<u>D. Employees are given limited resources to meet their goals</u>

No. They won't be motivated if they don't think they have the means to achieve those goals.

6 0
3 years ago
Economic growth is _____.
erica [24]

economic growth can result from a(n) _____ in government expenditures and a(n) _____ in net exports.

5 0
3 years ago
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