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3 years ago

What is the value today of receiving $5,000 at the end of six years, assuming an interest rate of 8% compounded semiannually?

Business

1 answer:

Ulleksa [173]3 years ago

6 0

Answer:

$3,122.96

Explanation:

Future value = 5000

i = 8%

n = 6

m = 2

Present Value = FV(1+i/m)^mn

Present Value = 5,000(1+0.08/2)^-2*6

Present Value = 5,000(1.04)^-12

Present Value = 5,000 / (1.04)^12

Present Value = 5,000 / 1.6010322

Present Value = 3122.985284118583

Present Value = $3,122.96

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3 years ago

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3 years ago

Read 2 more answers

CCC currently has sales of $26,000,000 and projects sales of $32,500,000 for next year. The firm's current assets equal $10,000,

vladimir2022 [97]

Answer: $1,025,000

Explanation:

Given that,

Current sales = $26,000,000

Projects sales = $32,500,000

Current assets = $10,000,000

Fixed assets = $9,000,000

Fixed assets will rise by $500,000

Accounts payable = $5,000,000

Long-term debt = $3,500,000

Common equity = $10,500,000

dividends = $900,000

net profit margin = 5%

Additional Funds Needed(AFN) can be calculated with the use of following formula:

AFN:

= $[(\frac{Current assets}{sales})\times(Revised\ Sales) + Revised\ Fixed\ Assets] - [(\frac{Spontaneous liabilities}{sales} )\times(Revised\ Sales) + Long\ Term\ Debt] - [Current\ Equity + Revised\ Net\ Income - Dividends]$

= $[(\frac{10,000,000}{26,000,000})\times(32,500,000) + (9,000,000 + 500,000)] - [(\frac{5,000,000}{26,000,000} )\times(32,500,000) + 3,500,000] - [10,500,000 + 5%\times32,500,000 - 900,000]$

= $22,000,000 - $9,750,000 - $11,225,000

= $1,025,000

6 0

3 years ago