Answer:
$444,444.44
Explanation:
Larry's life insurance corporation is trying to sell an investment policy that will pay you and your heirs a total amount of $32,000 per year
The required return on this investment is 7.2%
= 7.2/100
= 0.072
Since the cash flow is a perpetuity then, the amount that will be paid for the policy can be calculated as follows
PV= C/r
= $32,000/0.072
= $444,444.44
Hence the amount of money that will be paid for the policy is $444,444.44
Answer:
85.43 months
Explanation:
Purchase = $23,200
Payment per month = $445
Interest rate = 1.26%
Therefore the solution is:
$23,200 = $445[(1 − 1/1.0126^t) / .0126]
t = 85.43 months
I think the only reason that Im willing to supply the most bicycle at the higher price depends on the demand and the competition, if the competition has low and the demand is high, I would sell it in high price. I hope you are satisfied with my answer and feel free to ask for more if you have question and further clarifications
Answer:
Lifo in inflationary- condition Income tax shows minimum amount, when there is inflation in the economy.
Fifo In inflationary condition, income tax shows a higher amount.
Lifo .in deflation .In case of deflation, larger amount of income tax is shown. Fifo in deflation .Reduced income tax will be shown in deflationary conditions
Explanation:
Lifo in inflationary- condition Income tax shows minimum amount, when there is inflation in the economy.
Fifo In inflationary condition, income tax shows a higher amount.
Lifo .in deflation .In case of deflation, larger amount of income tax is shown. Fifo in deflation .Reduced income tax will be shown in deflationary conditions.
Answer:
B) The yield on a 5-year Treasury bond must exceed that on a 2-year Treasury bond.
Explanation:
The yield on 5-year Treasury bond must be higher than a 2-year Treasury bond. This is because the expected inflation rate after 2-years will be constant at 4% and there is also a maturity risk premium which increase with the increase in maturity of the bond. Therefore, the correct answer is option B.
