Answer:
B) the interest rate is zero and the number of compounding periods decrease.
Explanation:
When you are calculating the present value of a future cash flow if the discount rate (interest rate) is lower, the higher the present value. Also, if the number of periods is shorter, the present value will be higher.
Inversely, a higher discount rate or larger number of periods, the lower the present value.
Since the smallest possible discount rate is 0, then that would maximize the present value, along with shorter periods.
Answer: TRUE
Explanation: Annuity is a financial term or financial Product which enabled individuals to invest funds to gain streams of income when the terms agreed have been met.
Annuity have basically two phases which includes the ACCUMULATION PHASE(the phase where the investor is still finding the Annuity) and a ANNUITISATION PHASE(the phase from when the Stream of payment starts to be paid by the financial institution).
Annuities can be made to be very flexible in which it can be for a FIXED,UNTERMED, DEFERRED etc.
Answer:
b. $40,000
Explanation:
Step 1. Given information.
Loon Corporation distributes land with a basis of $350,000 and fair market value of $390,000 to Gerald in liquidation of his stock interest.
Step 2. Formulas needed to solve the exercise.
Gain to be recognized by Loon Corporation = Fair market value of the land - Basis
Step 3. Calculation.
Gain to be recognized by Loon Corporation = $390,000 - $350,000 = $40,000
Step 4. Solution.
The correct answer is 2nd. i.e $40,000
If supply decreases and demand remains stable, the price mechanically moves up since richer people are ready to pay more to get gasoline.
Of course companies selling gasoline want to maximize their profit so they will increase the price.
Right answer is A.