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valina [46]
3 years ago
10

A University of Iowa basketball standout is offered a choice of contracts by the New York Liberty.

Business
1 answer:
Ratling [72]3 years ago
8 0

Answer: <em>The lowest interest rate at which the present value of the second contract exceeds that of the first is </em><em>a. 7 percent</em><em>.</em>

Explanation:

<em>Calculating present values is a useful way to compare cases where money is to be received in the future. The higher the present value (when comparing cases where you get money), the better</em>. To calculate it, we make use of the next formula:

PV=\frac{C}{(1+r)^{n}}

Where PV: Present value,

C: Cash flow at a given period,

r: Interest rate, and

n: Number of periods that will have passed (in this case, we are talking about years).

Now, since we are getting money twice in each case (the first payment one year from today, and the final payment two years from today), we can restructure our present value formula to include these two payments. We will get something like this:

PV=\frac{C_1}{1+r}+\frac{C_2}{(1+r)^{2}}

<em>Notice how each fraction represents one of the payments received, with one having an 'n' of 1 year, and the other one having an 'n' of 2 years. C₁ and C₂ represent the first and the second payment, respectively.</em>

<em />

Now that we have our completed formula, let's review each contract's present value (PV) with the lowest interest rate (7%), just to see how it turns out. <em>Remember that 7% equals 0.07 in any formula</em>:

<em>Contract A) This one gives her $100,000 one year from today and $100,000 two years from today</em><em>.</em>

PV_{A,0.07}=\frac{100000}{1+0.07}+\frac{100000}{(1+0.07)^{2}}\\PV_{A,0.07}=93457.944+87343.873\\PV_{A,0.07}=180801.817dollars

So Contract A's present value at 7% interest rate would be equal to <em>$180801.817</em>.

<em>Contract B) The second one gives her $132,000 one year from today and $66,000 two years from today</em><em>.</em>

PV_{B,0.07}=\frac{132000}{1+0.07}+\frac{66000}{(1+0.07)^{2}}\\PV_{B,0.07}=123364.486+57646.956\\PV_{B,0.07}=181011.442dollars

So Contract B's present value at 7% interest rate would be equal to <em>$181011.442, </em><em><u>which exceeds that of Contract A</u></em><em>.</em>

<em>Since among our options of interest rates, 7 percent is the lowest one, and, with this taken into account, the present value of the second contract (Contract B) exceeded that of the first (Contract A), </em><em>the answer is a. 7 percent</em><em>.</em>

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Answer:

A. Wednesday

Explanation:

On which of the given days do you get a margin call? On Wednesday

Margin account will falls below the maintenance margin of $2,000 after the market close on Wednesday.

The margin call will be $2,000 - [2,700 - (100,000 - 97,843.72)] =$1,456.28.

7 0
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Answer:

The correct answer is option d.

Explanation:

Cartels are generally formed in oligopoly markets. In such markets there are few firms which are interdependent. So, they form cartels to enjoy monopoly power.

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So, option d is the correct answer here.

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Suppose that Eleanor receives higher pay at her workplace than her colleagues do, even though they perform essentially the same
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The answers are letters D and E

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3 years ago
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The Heartlake Corporation manufactures and sells toy gyroscopes. The following data is related to sales and production of the to
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Answer:

The Question is Incomplete; Full Question is as follows;

Using variable​ costing, what is the contribution margin for last​ year?

<em>Contribution Margin = $362,900</em>

Explanation:

Computation of expenditure margin by differential costing;

<em>Sales </em><em>Minus </em><em>variable cost </em>

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= $1,558,000  

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= $349,600

— variable sales and administrative costs(190,000 units *$4.45)

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<em>Keep in mind that; </em><em>Set or Fixed expenses and overhead costs are not taken into account when trying to calculate the contribution margin.</em>

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3 years ago
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Explanation:

1. Being a good global corporate citizen

2. Being ethical in its practices

3. Obeying the law

4. Making a profit

According to Archie B. Carroll,

The first one is Being a good global corporate citizen: How a good citizen is important for the country, being a good global corporate citizen is equally important for the corporate world.

The second one is the ethical practices: This is very closely related to citizenship. There are some professional ethics to be maintained for a corporate world to grow.

The third is obeying the law: Definitely, employees have to adhere to the rules of the organization which is an important aspect for the growth of the organization and to the corporate world.

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