Answer:
$133,880
Explanation:
Missing word <em>"How much is this goose worth today?"</em>
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Each year 1 golden egg, we get which weighed at 1 pond
1 pound = 16 ounce
Therefore 1 golden egg = 16 ounce
Therefore 1 golden egg = 16 ounce * $1,246/ounce
Therefore 1 golden egg = $19,952
Therefore for 10 years discounted at 8%, the worth of the goose shall be
= Yearly cash flow * Sum of D.F.8%, 10 years
= $19,952 * 6.7101
= $133,880
So, the worth of the goose today is $133,880
Answer:
Determinants of Interest Rates The real risk-free rate is 4%. Inflation is expected to be 4% this year, 5% next year, and then 4.5% thereafter. The maturity risk premium is estimated to be 0.0006 × (t - 1), where t = number of years to maturity. What is the nominal interest rate on a 7-year Treasury security?
The nominal interest rate = 8.86%.
Explanation:
Average inflation premium = (4%+5%+4.5%+4.5%+4.5%+4.5%+4.5%)/7 = 31.5%/7 = 4.50%
Maturity risk premium for 7 year bond = 0.0006 * (7-1) = 0.36%
Nominal interest rate = real risk free rate + inflation premium + maturity risk premium = 4% + 4.50% + 0.36% = 8.86%.
Therefore, the nominal interest rate for the question given = 8.86%.
B. The allowance for doubtful accounts is reported as a deduction from accounts receivable on the balance sheet
