A financial company advertises on television that they will pay you $55,000 now in exchange for annual payments of $8,500 that y
ou
are expected to receive for a legal settlement over the next 10 years. You estimate the time
value of money at 7 percent
(a) Calculate the present value of the annual payments. Use Exhibit 1-D. (Round time value factor to 3 decimal places and final
answer to the nearest whole number.)
Present value
(b) Would you accept this offer?
No
Yes
Pro
of 10
Mout
are expected to receive for a legal settlement over the next 10 years. You estimate the time
value of money at 7 percent
(a) Calculate the present value of the annual payments. Use Exhibit 1-D. (Round time value factor to 3 decimal places and final
answer to the nearest whole number.)
Present value
(b) Would you accept this offer?
No
Yes
Pro
of 10
Mout
1 answer:
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Answer:
EBM = +-54.126
Step-by-step explanation:
In this question we have confidence interval to be 80%
The formula to solve this is in the attachment.
Bar X = 1460
Z-alpha/2 = 1.282
Sd = standard deviation = 198 employees
n = 22 departments
After we have inserted all values in to the formula we have:
1460 +-(1.282*198/√22)
= 1460+-(54.12604)
= (1405.87, 1514.126)
The error bounded mean EBM
= +-z-alpha/2 x (sd/√n)
= 1.282 x 198/√22
= 1.282 x 42.22
EBM = +-54.126
