1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
leva [86]
3 years ago
14

Qualcomm has developed a groundbreaking new CPU chip. The patent on the chip will last 17 years. You expect that the chip’s prof

its to be $4 million in its first year and that this amount will grow at a rate of 5% per year for the next 17 years. Once the patent expires, Intel will be able to produce the same chip and competition will likely drive profits to zero. What is the present value of the new chip if the interest rate is 8% per year?
Business
1 answer:
umka21 [38]3 years ago
4 0

Answer:

$50.74 million

Explanation:

Interest rate per annum = 8%

Number of years = 17

Number of compounding per annum = 1

Interest rate per period (r) = 8%/1 = 8%

Number of period (n) =17 * 1 = 17

Growth rate (g) = 5%

First payment (P) = 4 ($'million)

PV of the new Chip = p/(r-g) * [1 - [(1+g)/(1+r)]^n]

PV of the new Chip = 4/(8%-5%) * [1 - [(1+5%)/(1+8%)]^17]

PV of the new Chip = 4/0.03 * [1 - [1.05/1.08]^17]

PV of the new Chip = 4/0.03 * [1 - 0.972222^17]

PV of the new Chip = 133.333 * (1 - 0.6194589804)

PV of the new Chip = 133.333 * 0.3805410196

PV of the new Chip = 50.7386757663268

PV of the new Chip = $50.74 million

You might be interested in
In early January 2019, Blue Corporation applied for a trade name, incurring legal costs of $15,400. In January 2020, Blue incurr
Andrew [12]

Answer:

2019 Amortization =$1,540

2019 Book Value=$13,860

2019 Amortization =$2,440

2019 Book Value=$19,520

Explanation:

Computation for 2019 amortization, 12/31/19 book value, 2020 amortization, and 12/31/20 book value if the company amortizes the trade name over 10 years.

Calculation for 2019 Amortization (15,400 ÷ 10)

= 1,540

Calculation for Book Value of December 31, 2019

= 15,400 – 1,540

= 13,860

Calculation for 2020 Amortization will be:

(13,860 + legal fees 8,100) ÷ 9)

= 21,960÷9

= 2,440

Calculation for the Book Value of December 31, 2020

13,860 -2,440

=11,420

= 11,420+8,100

=$19,520

6 0
2 years ago
The formula for calculating the present value factor for an annuity of $1 is a. Amount to Be Invested/Equal Annual Net Cash Flow
Rus_ich [418]

Answer:

a. Amount to Be Invested/Equal Annual Net Cash Flows

Explanation:

The formula to calculate the present value factor by considering annuity is shown below:

= Invested amount ÷ Equally Annual net cash flows

As an annuity is a set of payments made at the equal periods

Simply we divide the invested amount by the equal amount of annual net cash flows so that the Present value factor of an annuity can be computed

4 0
2 years ago
Planning involves ________.
kobusy [5.1K]

Setting goals and objectives is a part of planning.

Planning includes both the process of developing a plan and its accurate and timely execution.

Planning may be extremely helpful in avoiding mistakes and seeing possibilities. Good planning demonstrates management's familiarity with the company and their consideration of changes in "products," management, finance, and—perhaps most importantly—the external environment, which includes markets, competitors, users, and regulations. Planning aids in future prediction, future visibility, and the construction of a link between the present and this future.

To know more about planning.

brainly.com/question/25453419

#SPJ4

3 0
1 year ago
Thyme, Inc. owns 16,000 of Sage Co.'s 20,000 outstanding common shares. The carrying value of Sage's equity is $500,000. Sage su
DedPeter [7]

Answer:

The total non controlling interest after the additional shares are issued is equal to $252,000.

Explanation:

Before the issue Sage co's had 20,000 shares with total equity value of $500,000. After the issue of 5000 shares worth $200,000, the total number of shares and equity would be -

Total number of shares = 25,000 ( 20,0000 + 5000 )

Total equity value          = $700,000

Now Thyme inc owns 16,000 number of shares , which means that minority holds 9000 number of shares . Now the price per share would be =

       TOTAL EQUITY / NUMBER OF SHARES

         $700,000 / 25,000

=        $28

NON CONTROLLING INTEREST = Minority shares x Price per shares

                                                      = 9000 x $28

                                                      = $252,000

8 0
3 years ago
For Gundy Company, units to be produced are 5,280 in quarter 1 and 6,400 in quarter 2. It takes 2.0 hours to make a finished uni
Lorico [155]

Answer:

Total cost= $350,400

Explanation:

Giving the following information:

For Gundy Company, units to be produced are 5,280 in quarter 1 and 6,400 in quarter 2. It takes 2.0 hours to make a finished unit, and the expected hourly wage rate is $15 per hour.

Quarter 1:

Direct labor cost= 5,280*2= 10,560 hours

Quarter 2:

Direct labor cost= 6,400*2= 12,800 hours

Total cost= (10,560 + 12,800)*15= $350,400

7 0
3 years ago
Other questions:
  • On Tuesday, Smokey had taken off his watch, which he had found laying on top of a trash can at the curbside, and placed it on th
    13·1 answer
  • A high/low pricing strategy relies on the promotion of sales. True or False
    12·1 answer
  • Suppose you have $10,000 in cash and you decide to borrow another $10,000 at a 6% interest rate to invest in the stock market. Y
    12·1 answer
  • Initially, the number of tools per worker was higher in Hermes than in Gobbledigook. From 2012 to 2062, capital per worker rises
    5·2 answers
  • Which of the following explains how can a yield curve be flat or downward sloping if a maturity risk premium exists? a. Investor
    10·1 answer
  • Marigold Corp. began the year 2022 with $98300 in its Common Stock account and a debit balance in Retained Earnings of $42100. D
    15·1 answer
  • ________ determines the point at which the sum of carrying costs and ordering costs are minimized, or the point at which carryin
    15·1 answer
  • Smileline Inc. has an onsite daycare facility and provides employees fulltime daycare at a very low cost. The company implemente
    14·1 answer
  • Alguien para hablar estoy sola
    10·1 answer
  • The form of billboard advertising regularly seen alongside highways and in other heavily traveled locales is _____.
    8·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!