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kotegsom [21]
3 years ago
7

Jane receives a 10-year increasing annuity-immediate paying 100 the first year and increasing by 100 each year thereafter. Mary

receives a 10-year decreasing annuity-immediate paying X the first year and decreasing by X/10 each year thereafter. At an effective annual interest rate of 5%, both annuities have the same present value. Calculate X.
a. 860
b. 864
c. 868
d. 872
e. 876
Business
1 answer:
ss7ja [257]3 years ago
5 0

Answer:

b. 864

Explanation:

Jane; Pv = P.a 10? + Q[(a.10? - 10v^10)/i}]

Pv = 100(7.7217) + 100[(7.7217 - 6.1391)/0.05]

Pv = 3937.38

Mary; Pv = P.a 10? + Q[(a.10? - 10v^10)/i}]

Pv = x(7.7217) - (x/10)[(7.7217 - 6.1391)/0.05]

Pv = 7.7217x - (x/10)(31.6521) = 4.5565x

Equating Pv for both Jane and Mary

3937.38 = 4.5565x

x = 3937.38/4.5565 = 864.124

x = 864.124 = 864

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Answer:

Correct option is B) $17.10

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Explanation:

Overhead rates are based on cash outflow, they are not allocated and computed based on non cash items.

Total direct labor hours = 8,900

Thus total variable overhead rate = $5.50

Total cash fixed cost = $133,500 - $30,260 = $103,240

Fixed cost overhead rate = $103,240/8,900 = $11.60

Total overhead cost per hour = Variable overhead + Fixed Overhead = $5.50 + $11.60 = $17.10

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3 years ago
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gayaneshka [121]
Hi

I remember they used to give me options for this kind of question :)

Here you go, I remember the answer is : Craft

Good luck!
7 0
3 years ago
a customer has invested 20000 in a variable annuity. in the first year nav increases to 21100 at what rate wsill 1100 gain be ta
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When this happens they will be charged at the normal income tax rate.

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5 0
1 year ago
Justus Motor Co.has a WACC of 11.50%, and its value of operations is $25.00 million. Justus's free cash flow is expected to grow
lakkis [162]

Answer:

FCF_0=1.05

So option (b) is correct option

Explanation:

We have given value of operation PV = $25.00

WACC, that is Ke = 11.50% = 0.1150

It is grow at a constant rat of 7 % so g = 0.07

We have to find the value of FCF_0

We know that value of operation is given by

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FCF_0=1.05

So option (b) is correct option

4 0
3 years ago
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