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Veronika [31]
3 years ago
14

A lottery winner can take $6million now or be paid $600,000 at the end of each year for the next 16 years. The winner calculates

the internal rate of return of taking the money at the end of each year, and estimating that the discount rate across this period will be 5%, decides to take the money at the end of each year. Was her decision correct
Business
1 answer:
morpeh [17]3 years ago
5 0

Answer:

yes

the present value of the 16 year annuity is 6502661.74. this is greater than $6 million

Explanation:

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Ying purchased a new brand of laundry detergent. When she used the detergent for the first time, she was highly frustrated becau
Sedbober [7]

Answer: C. Low-involvement consumer

Explanation:

A low-involvement consumer could be described as someone who does not observe much risk in a product after purchase and could continue using the product due to his or her reservation on the product instead of returning to the retailer where it was gotten. Ying discovers that she can manage the detergent as long as it's able to remove stain from her cloth even though it has a bad odour. She is seen as a low-involvement consumer.

3 0
3 years ago
Managers will utilize __________ skills with increasing frequency as they rise within an organization.
Nastasia [14]
<span>E. Conceptual and decision</span><span>

The Internal auditor is the person who reviews the operating and accounting control procedures adopted by management to make sure the controls are adequate.

Internal audit within the company is not only done to review operating and accounting control procedures but to recommend ways that will further operation and accounting control within the company. </span>
7 0
3 years ago
Partnership XYZ distributed a piece of land in a nonliquidating distribution to Bob, a 50% partner, during the current taxable y
andrezito [222]

Answer:

a. Partnership XYZ's recognized gain (loss)

  • recognized gain = fair market value - basis = $180,000 - $50,000 = $130,000

b. Bob's taxable gain (income)

  • Bob's taxable income = $130,000 x 50% = $65,000

c. Bob's basis in the property

  • Bob's new basis = $180,00 x 50% = $90,000

d. Bob's basis in the partnership

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4 0
3 years ago
The service cost component of a defined benefit pension plan is computed as the:
mote1985 [20]

Answer: The service cost component of a defined benefit pension plan is computed as the: <em><u>Present value of the change in pension liability from additional employee service. </u></em>

The service cost of a defined benefit pension plan is the change in the pension liability caused by one additional year of employee service. Also an expected return on pension plan assets does not cause an increase in the pension expense for a defined benefit plan.

5 0
3 years ago
Assume the following: The real risk-free rate, r*, is expected to remain constant at 3%. Inflation is expected to be 3% next yea
DaniilM [7]

Answer:

This problem assumed a zero maturity risk premium, but that is probably not valid in the real world.

Explanation:

Consider the following definition

Maturity risk premium determines a bond’s price. Other risks include the chance that the bond issuer will fail to make its payments and the risk that you won’t be able to quickly find a buyer for the bond when you want to sell it, forcing you to lower your asking price.

7 0
3 years ago
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