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djverab [1.8K]
3 years ago
4

Question 4 James Bennett also allocates wealth between youth and old age. He has no cash currently (in his youth), but will inhe

rit $3000 in his old age. He can lend and borrow at the bank at 18% (that is, lending $1 in youth will give him $1.18 in old age). He has an investment opportunity that costs $12,000 now in his youth and has a payoff of $15,000 in his old age. This is the only investment opportunity available to him. What is the most he can consume in his youth
Business
1 answer:
myrzilka [38]3 years ago
6 0

The most amount that should be consumed in his youth is $15,254.23.

The calculation is as follows:

Present value × 1.18 = Future value

Present value × 1.18 = ($15,000 + $3,000)

So, the present value should be

= $18,000 ÷ $1.18

= $15,254.23

The present value is the value that represents today's value.

Therefore we can conclude that the most amount that should be consumed in his youth is $15,254.23.

Learn more about the present value here: brainly.com/question/11429476

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fenix001 [56]

TRUE

<u>Explanation:</u>

The correct answer is true as the independent projects are selected based on the net present worth and the rate of return and do nothing alternative. In the independent projects, there is no need for the incremental B/C analysis. Simple B/C ratio will do it. If the B/C > 1, benefits outweigh the costs and the project is selected provided that there is no budget limitation. Thus, the given statement is absolutely the true one.

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4 years ago
What are the practical consequences of a lack of strategic linkage between the business and the operations function? give exampl
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3 years ago
Ben Perez is driving along a mountain road. In the distance, he sees a road crew working on a fallen tree that has blocked the h
Morgarella [4.7K]

Answer:

B. Exposure.

Explanation:

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Measurement of exposure is generally defined as some form of

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7 0
3 years ago
Denny Corporation is considering replacing a technologically obsolete machine with a new state-of-the-art numerically controlled
inn [45]

Answer:

26.4%.

Explanation:

Net Profit:

= Saving of Labor & other Costs - Maintenance Cost of Machine -  Depreciation On Machine (100,000/ 16 years)

= $40,000 - $10,000 - $6,250

= $23,750

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= Cost of new Machine - Salvage value of old machine

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= $90,000

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= $23,750 ÷ $90,000

= 0.264 × 100

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3 years ago
What is the term for an interval smaller than a step?.
Svetach [21]

Answer:

Half step

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If you're talking about music, then a half step is smaller than a step.

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3 years ago
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