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
Mamont248 [21]
3 years ago
5

Marko, Inc., is considering the purchase of ABC Co. Marko believes that ABC Co. can generate cash flows of $6,100, $11,100, and

$17,300 over the next three years, respectively. After that time, they feel the business will be worthless. Marko has determined that a rate of return of 15 percent is applicable to this potential purchase. What is Marko willing to pay today to buy ABC Co.
Business
1 answer:
Tomtit [17]3 years ago
4 0

Answer:

Total PV= $25,072.57

Explanation:

Giving the following information:

Cash flows:

Cf1= $6,100

Cf2= $11,100

Cf3= $17,300

Discount rate= 15%

<u>To calculate the present value, we need to use the following formula on each cash flow:</u>

PV= Cf / (1+i)^n

PV1= 6,100 / 1.15= 5,304.35

PV2= 11,100 / 1.15^2= 8,393.19

PV3= 17,300 / 1.15^3= 11,375.03

Total PV= $25,072.57

You might be interested in
Which statement is true of an adjustable rate mortgage?
DerKrebs [107]
The answer is B. Adjustable rate mortgage is a mortgage loan where the interest rate stays for for a certain period of time then it changes either up or down based on an index. It is also called variable-rate mortgage or tracker mortgage. This type of mortgage loan permits a debtor to have a lower initial payment if and only if they agree to assume the risk of the changes in the interest rate.<span>
</span>
3 0
3 years ago
Muriel buys a $2,000 savings bond with a 4% coupon and 20 years to maturity. How much interest will she earn over the life of th
irina1246 [14]
To solve: use the simple interest calculation.

interest earned over the life of the bond = (bond price)(coupon rate)(years)
= (2,000)(0.04)(20)
= $1,600

So after 20 years on a 4% coupon bond starting at $2,000 Muriel will earn $1,600 in interest. 
3 0
3 years ago
you need to have $32000 in 7 years. you can earn an annual interest rate of 3 percent for the first 4 years, and 3.6 percent for
katrin2010 [14]

Answer:

$22,569.48 is amount i must have to deposit today

Explanation:

FV = Future Value , PV = Present Value , r = rate of interest , n= no of period

PV = FV / (1 + r )n

PV = 32000 / (1 + 3%)^4*(1+3.6%)^3

PV= $32,000/ (1 + 0.03)^4*(1+0.036%)^3

PV= $32,000/ (1.03)^4*(1.036%)^3

PV= $32,000/ (1.03)^4*(1.036)^3

PV= $32,000/ 1.12550881 * 1.111934656

PV= $32,000/ 1.251492251

PV = $22,569.47514

PV = $22,569.48

$22,569.48 is amount i must have to deposit today

8 0
3 years ago
What can we learn from the employment data? Assume Country X has the following statistics: Total relevant population = 50,000,00
svlad2 [7]

Answer:

Country x

Population size 50,000,000

Full time students 4,200,000

Not employed & not searching 6,000,000

Not employed and searching 2,336,000

Employed 29,664,000

Labour force is defined as the population of the economy currently engaged in some employment and those jobless but available or searching for employment

Labour force is 32,000,000

Labor force participation rate is the labor force divided by the population size.

= 64%

Unemployment rate is defined as members of a country not employed and are searching or seeking employment.

= 4.7%

3 0
2 years ago
The AUD/$ spot exchange rate is AUD1.60/$ and the SF/$ is SF1.25/$. The AUD/SF cross exchange rate is _____. Group of answer cho
DaniilM [7]

Answer:

a. $1.2800

Explanation:

The AUD/SF cross exchange rate is as computed below:

==> AUD/$ ÷ SF/$

==> $1.60 / $1.25

==> $1.2800

So, the AUD/SF cross exchange rate is $1.2800

6 0
2 years ago
Other questions:
  • An increase in interest rates should cause level of bussiness investment spending to
    11·1 answer
  • What is the key factor in determining sales mix if a company has limited resources?
    12·2 answers
  • What is crucial factor to small business success
    13·1 answer
  • Phillips equipment has 75,000 bonds outstanding that are selling at par. bonds with similar characteristics are yielding 7.5 per
    11·1 answer
  • On January 1, 2021, White Water issues $600,000 of 7% bonds, due in 10 years, with interest payable semi annually on June 30 and
    15·1 answer
  • Is this correct? How do I do this?!
    9·1 answer
  • Which of the following investment choices is least risky?. . A.Flipping. B.Renting. C.CDs. D.Bonds. .
    8·2 answers
  • Give a minimum of three reasons why a cover letter is important
    9·2 answers
  • Read the argument below and determine the underlying principle that was used to come to the conclusion presented: A free college
    9·1 answer
  • ____describes the layout of the screen.
    5·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!