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3 years ago

Select the correct answer.

Business

2 answers:

castortr0y [4]3 years ago

5 0

A......Equity capital

melomori [17]3 years ago

4 0

A.........................

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Answer each of the following independent questions. Required: Alex Meir recently won a lottery and has the option of receiving o

Lady_Fox [76]

Answer:

option 1

$4,056,237.49

Explanation:

To determine the better option, we have to determine the present value of options 2 and 3

Present value is the sum of discounted cash flows

Present value can be calculated using a financial calculator

option 2

Cash flow in year 0 = $34,000

Cash flow in year 1 to 6 = $9,300

I = 7 %

PV = 78,328.82

Option 2

Cash flow in year 1 to 6 = $$18,400

I = 7 %

PV = 87704.33

To find the NPV using a financial calculator:

1. Input the cash flow values by pressing the CF button. After inputting the value, press enter and the arrow facing a downward direction.

2. after inputting all the cash flows, press the NPV button, input the value for I, press enter and the arrow facing a downward direction.

3. Press compute

It is the first option that has the highest value

The formula for calculating future value = A / annuity factor

Annuity factor = {[(1+r) n] - 1} / r

P = Present value

R = interest rate

N = number of years

7 0

3 years ago

A company purchased new equipment for $45,000. The company paid cash for the equipment. Other costs associated with the equipmen

sattari [20]

Answer:

the cost recorded for the equipment is $52,500

Explanation:

The computation of the cost recorded for the equipment is shown below:

The Cost of equipment is

= Purchase price + Transportation cost + Sales tax + Installation cost

= $45,000 + $2,300 + $3,100 + $2,100

= $52,500

Hence, the cost recorded for the equipment is $52,500

The same is to be considered by applying the above formula

3 0

3 years ago

Testbank Multiple Choice Question 122 On January 1, 2012, Bramble Corp. purchased for $768000, equipment having a useful life of

-BARSIC- [3]

Answer: $28,300

Explanation:

The gain that Bramble will recognize will goes thus:

First and foremost, we have to calculate the accumulated depreciation on the equipment and this will be:

= (768,000 - 36,000)/10 x 9

= 658,800

After that, we would find the value of the net Bmbook value on Dec 31, 2020 and this will be:

= 768,000 - 658,800

= 109,200

The gain will then be:

= Sales value - Net book value

= 137,500 - 109,200

= 28,300

7 0

3 years ago

A country currently has an outstanding debt of $45 billion. Its current-year expenditures are $12 billion and its tax revenue is

zhannawk [14.2K]

Answer:

Answer is B

there will be budget surplus= 14-12= $2 billion

as we have surplus we can divert this amount to pay out the debt so debt will reduce by 2 billion and remaining debt will be of $ 43 billion

6 0

3 years ago

Read 2 more answers

A. Butcher Timber Company hired your consulting firm to help them estimate the cost of equity. The yield on the firm's bonds is

stealth61 [152]

Answer:

14.35%

Explanation:

In this given case, Risk free return will be yield on bond = 10.50%

Risk Premium given = 3.85%

But beta of company is not given, and market beta also not given, hence we can not calculate beta.

we can assume beta of company is 1, then-

Cost of equity can be calculated as:

= Risk free return + [Beta × Risk Premium]

= 10.50% + [1 × 3.85%]

= 10.50% + 3.85%

= 14.35%

Note:

Retained earning also not given so that we calculate based of retained earning.

3 0

3 years ago