Now, consider the situation in which Olivia wants to earn a return of 3.00%, but the bond being considered for purchase offers a coupon rate of 6.00%. Again, assume that the bond pays semiannual interest payments and has three years to maturity. If you round the bonds intrinsic value to the nearest whole dollar, then its intrinsic value of (rounded to the nearest whole dollar) is its par value, so that the bond is
Answers
Answer:
Intrinsic value = $1085.87
Explanation:
Annual Rate of return = 3.00%
Annual Coupon rate = 6.00%
Now, consider the situation in which Olivia wants to earn a return of 3.00%, but the bond being considered for purchase offers a coupon rate of 6.00%. Again, assume that the bond pays semiannual interest payments and has three years to maturity. If you round the bonds intrinsic value to the nearest whole dollar, then its intrinsic value of $1085.87 (rounded to the nearest whole dollar) is HIGHER THAN its par value, so that the bond is TRADING AT PREMIUM
Intrinsic value = \(\frac{A}{(1+C)^1} + \frac{A}{(1+C)^2} + \frac{A}{(1+C)^3} +\frac{A}{(1+C)^4} + \frac{A}{(1+C)^5} + \frac{A}{(1+C)^6}\) \(+ \frac{B}{(1+c)^6}\)
= 30/ (1.015) + 30/(1.015)^2 + ------- + 30/ (1.015)^6 + 1000/(1.015)^6
= 29.56 + 30/1.030 + 30/1.046 + 30/1.061 + 30/1.077 + 30/1.093 + 1000/1.093
= 29.56 + 29.126 + 28.68 + 28.275 + 27.855 + 27.447 = $170.96 + $914.91
= $1085.87
Bond's par value = $1000
annual coupon rate = 6% = 0.06
semiannual coupon rate = 3% = 0.03
semiannual coupon ( A ) = 0.03 * $1000 = $30
Annual rate of return = 3% = 0.03
semi-annual rate of return ( C )= 1.5% = 0.015
Related Questions
What is expansionary policy used for?
Answers
Answer:
to stimulate an economy
Explanation:
it stimulates the economy by boosting demand through monetary
cowboy clothing issues 2,100 shares of its $0.01 par value common stock to provide funds for further expansion. assuming the issue price is $11 per share, record the issuance of common stock.
Answers
The journal entry for the issuance of common share with par value of cowboy clothing is stated below.
What is the journal entry for the issuance of common stock?Journalizing common shares having a par value entails debiting cash (asset) for the amount paid for the shares, crediting common shares (equity) up to the par value, and crediting the remaining amount to additional paid-in capital (equity). Common stock is typically valued at its fair value, which is typically the amount of cash received, at the time of issuance. Any excess beyond par value is then applied to extra paid-in capital. Those revenues are first applied to the par value of the shares (if any).
The record issuance of common stock :
Accounts title Debit Credit
Cash (2100 shares x $ 11 issue price) $23,100
Common Stock (2100 shares x $ 0.01 par
value) $21
Additional paid in capital in excess of Par
- Common Stock $23,079
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Give an example of one good or service produced in the United States using the market model. Justify your example using content from the poster.
Answers
Answer:
Oil is the good produced in the United States of America by using the command economic model.
A command economy is an economic system where the government decides the quantity of goods produced as well as the price of the goods. In his type of economy, the prices of goods are fixed and does not depend on the demand and supply. The United States of America produced oil according to the demand of the country's needs of oil so that's why we can conclude that oil is the good that follows the model of command economy.
Diego Company manufactures one product that is sold for $71 per unit in two geographic regions—the East and West regions. The following information pertains to the company’s first year of operations in which it produced 54,000 units and sold 49,000 units. Variable costs per unit: Manufacturing: Direct materials $ 22 Direct labor $ 12 Variable manufacturing overhead $ 3 Variable selling and administrative $ 5 Fixed costs per year: Fixed manufacturing overhead $ 864,000 Fixed selling and administrative expenses $ 586,000 The company sold 36,000 units in the East region and 13,000 units in the West region. It determined that $280,000 of its fixed selling and administrative expenses is traceable to the West region, $230,000 is traceable to the East region, and the remaining $76,000 is a common fixed cost. The company will continue to incur the total amount of its fixed manufacturing overhead costs as long as it continues to produce any amount of its only product.
5. What is the company’s total gross margin under absorption costing?
6 What is the company’s break-even point in unit sales?
7. What would have been the company’s variable costing net operating income (loss) if it had produced and sold 49,000 units? What would have been the company’s absorption costing net operating income (loss) if it had produced and sold 49,000 units? Prepare a contribution format segmented income statement that includes a Total column and columns for the East and West regions.
Answers
Answer:
Diego Company
1. The company's total gross margin under absorption costing is:
= $802,000
2. The company's break-even point in unit sales is:
= 50,000 units
3. The company’s variable costing net operating income (loss) if it had produced and sold 49,000 units is:
= ($29,000).
4. The company's absorption costing net operating income (loss) if it had produced and sold 49,000 units is:
= ($29,000).
5. Contribution Format Segmented Income Statement
East West Total
Sales units 36,000 13,000 49,000
Sales revenue $2,556,000 $923,000 $3,479,000
Variable cost of goods sold:
Production costs 1,332,000 481,000 1,813,000 ($37 * 49,000)
Selling and admin. 180,000 65,000 245,000
Total variables $1,512,000 $546,000 $2,058,000
Contribution $1,044,000 $377,000 $1,421,000
Fixed costs:
Manufacturing 280,000 230,000 510,000
Common costs 76,000
Total fixed costs $280,000 $230,000 $586,000
Net income $764,000 $146,000 $835,000
Explanation:
a) Data and Calculations:
Selling price = $71 per unit
East West
Sales units 36,000 13,000
Production units = 54,000
Sales unit = 49,000
Variable costs per unit:
Manufacturing:
Direct materials $ 22
Direct labor $ 12
Variable manufacturing overhead $ 3
Total variable manufacturing costs = $37 per unit
Variable selling and administrative $ 5
Fixed costs per year:
Fixed manufacturing overhead $ 864,000
Fixed selling and administrative expenses $ 586,000 (West $280,000 East $230,000, and $76,000 common)
Total fixed costs = $1,450,000
Total gross margin under absorption costing:
Sales revenue $3,479,000 ($71 * 49,000)
Cost of production:
Variable costs $1,813,000
Fixed costs 864,000 2,677,000
Gross profit $802,000
Break-even point in unit sales:
Sales price = $71
Variable manufacturing cost per unit = $37
Variable selling cost per unit = $5
Total variable cost per unit = $42
Contribution margin per unit = $29
Break-even point in unit sales = FC/contribution margin
= $1,450,000/$29 = 50,000 units
Sales revenue $3,479,000 ($71 * 49,000)
Variable production costs 1,813,000 ($37 * 49,000)
Variable selling costs 245,000 ($5 * 49,000)
Total variable costs $2,058,000
Contribution margin $1,421,000
Fixed costs
Manufacturing 864,000
Selling and admin. 586,000 $1,450,000
Net operating income (loss) ($29,000)
Sales revenue $3,479,000 ($71 * 49,000)
Production costs:
Variable costs 1,813,000 ($37 * 49000)
Manufacturing 864,000
Total production costs 2,677,000
Cost of goods sold $2,677,000
Gross profit $802,000
Period costs:
Selling and administrative 831,000
Net operating income (loss) ($29,000)
The Reverend Petros receives an annual salary of 51,000 as full-time minister this includes 5000 designated as a rental allowance River and Pedro is not exempt from employment tax how much must he include figuring that income for self-employed tax
Answers
If the Reverend Petros receives an annual salary of 51,000 as full-time minister that includes 5000 designated as a rental allowance. The amount that must be include figuring that income for self-employed tax is : $51,000.
What is annual salary?Annual salary can be defined as the amount a person earn as salary per year.
On the other hand self employed tax can be defined as the tax a person that is solely working for his/her self without working for any other person remit to the government.
Therefore the amount that must be include figuring that income for self-employed tax is the amount of $51,000.
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Top of the World, Inc. provides rock climbing sessions to customers. The following is a list of transactions that occurred in 2017. For each transaction, describe the dual effect of the transaction on the accounting equation. For example, in transaction a): 1) assets increase $4,000 and 2) SHE increases $4,000.
a. 1/20/17: Issued 400 shares of common stock for $10 per share. Assets increase $4,000;SHE increases $4,000.
b. 1/30/17: Signed a note payable for $14,900 in cash.9
c. 2/11/17: Purchased a building for $2,040 in cash.
d. 2/19/17: Purchased supplies on account from creditors for $1,030.
e. 3/10/17: Paid creditors $600 in cash. f. 4/30/17: Paid $9,100 in cash for employee wages for the current period.
Answers
Answer:
a. Assets increase $4,000; SHE increases $4,000.
b. Assets increase $14,900; Liabilities increase $14,900.
c. Assets increase $2,040; Assets decrease $2,040.
d. Assets increase $1,030; Liabilities increase $1,030.
e. Assets decrease $600; Liabilities decrease $600.
f. Assets decrease $9,100; Liabilities decrease $9,100.
Explanation:
Accounting equation is given as follows:
Assets = Liabilities + Shareholders' equity (SHE)
Therefore, we have the following:
a. 1/20/17: Issued 400 shares of common stock for $10 per share.
Assets increase $4,000; Shareholders' equity (SHE) increases $4,000.
When common stock is issued, cash is received by the company. Since cash is type of assets, current asset to be specific, the first effect on the accounting equation is therefore an increase in assets.
Common stock can be described as a security that represents ownership in a company. Since common stock is one of the component of SHE, any issue of common stock will therefore lead to an increase in SHE in the accounting equation.
b. 1/30/17: Signed a note payable for $14,900 in cash.
Assets increase $14,900; Liabilities increase $14,900.
Note payable is a type of liability which is a written promise by a borrower to repay a lender the amount of cash received/borrowed in return. Since the cash received is a type of asset, the first effect on the accounting equation is an increase. Since note signed is a type of liability, the second effect on the accounting is an increase in liabilities.
c. 2/11/17: Purchased a building for $2,040 in cash.
Assets increase $2,040; Assets decrease $2,040.
The building purchased is a type of asset, a fixed asset to be specific; while cash that is used to pay for it is also an asset, current asset to be specific. The dual effect of this transaction are therefore an increase in asset (fixed asset) by $2,040 and a decrease in assets (Current Asset, i.e cash) by $2,040.
d. 2/19/17: Purchased supplies on account from creditors for $1,030.
d. Assets increase $1,030; Liabilities increase $1,030.
Supplies is a type of asset, current asset to specific; while purchase on account creates a liablity to pay creditors, a current liability to be specific. Therefoe, the dual effect of this transaction on the accounting equation are Assets increase by $1,030 and Liabilities increase by $1,030.
e. 3/10/17: Paid creditors $600 in cash.
Assets decrease $600; Liabilities decrease $600.
A payment to creditors reduces cash which is an asset and also reduces creditors which are part of the liabilities. Therefoe, the dual effect of this transaction on the accounting equation are Assets decrease by $600 and Liabilities decrease by $600.
f. 4/30/17: Paid $9,100 in cash for employee wages for the current period.
Assets decrease $9,100; Liabilities decrease $9,100.
A payment of employess reduces cash which is an asset and also reduces wages payable which is a part of the liabilities. Therefoe, the dual effect of this transaction on the accounting equation are Assets decrease by $9,100 and Liabilities decrease by $9,100.
Do you think credit scores should play a
role in choosing a partner? Why or why not
Answers
Answer with Explanation:
Yes, I believe credit scores should be considered by a person when choosing a partner. Having a partner also means sharing each other's financial burdens, thus, it is essential to know how a person handles his finances. Having a good credit score will most likely mean that the person is financially responsible. This may also mean that once you live together, he'll share in the expenses of the house and will be responsible in paying them on time. Many relationships end up in divorce because of financial constraints and if this is often the case, it just becomes reasonable to know first the credit score of the partner you'd be choosing.
Which of the following would appear in the cash flows from investing activities section of the statement of cash flows?
a. Cash received from stock issued
b. Cash received from bonds payable
c. Depreciation expense on equipment
d. Cash paid for equipment
Answers
The correct answer is:
d. Cash paid for equipment
Cash flows from investing activities include transactions related to the acquisition or sale of long-term assets such as property, plant, and equipment. Cash paid for the purchase of equipment would be categorized as an investing activity because it involves the outflow of cash for the acquisition of a long-term asset.
Which of these terms best describes buying on margin during the 1920s?
paying ten cents on the dollar for stock
paying fifty cents on the dollar for stock
paying full price for stock
paying with a credit card
Answers
The terms that best describes buying on margin during the 1920s is: B. Paying fifty cents on the dollar for stock.
In the 1920s buying of stocks on margin was a popular practice on the American stock market and this involves getting a loan from a broker in order to buy stocks as well as using the stocks as security for the loan.
This tend to made it possible for investors to purchase more stock than they could have done with their available cash and perhaps profit from rising stock prices. It also exposed investors to high risks because a drop in stock prices could trigger margin calls in which the broker requests more money or assets to settle the loan.
Therefore the correct option is B.
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how skill based training can assist you in with future unemployment commtunity service
Answers
Skill-based training can be incredibly helpful in preparing you for future unemployment community service by equipping you with the tools and abilities necessary to succeed in the job market.
How can skill - based training be beneficial ?Skill-based training can provide you with the specific skills and knowledge required for your desired job or industry. By gaining these skills, you will be more marketable and valuable to potential employers.
Skill-based training can help you become more flexible and adaptable in the face of changing job requirements or industries. You may be able to take on new tasks or roles more easily and be better equipped to pivot your career path.
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Question 2 of 20
Lexi wants to open an account where she can access the funds she needs to
pay her rent and other bills any time she wants. Which type of account would
be the best option for Lexi?
OA. A checking account
OB. A certificate of deposit
OC. A savings account
D. A money market account
SUBMIT
Answers
The best option for Lexi, who needs access to funds anytime she wants to pay her rent and other bills, would be a checking account (option A).
Checking accounts offer features such as check writing, debit card usage, and online banking, allowing Lexi to conveniently and quickly access her money whenever needed. With a checking account, she can easily pay bills by writing checks or using electronic payment methods.
In contrast, options B and C, a certificate of deposit (CD) and a savings account, respectively, may not be the best fit for Lexi's immediate needs. A CD typically requires the funds to be locked in for a specified period of time, usually ranging from a few months to several years, with limited or no access to the funds until the maturity date.
Option D, a money market account, is another viable choice for Lexi. Money market accounts often offer higher interest rates than traditional savings accounts, and they also provide check-writing and debit card capabilities. However, some money market accounts may have minimum balance requirements or limitations on the number of transactions.
Option A.
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chất lượng tối ưu là gì
Answers
Answer:
net là một thị trường hiệu quả hay không hiệu quả
Explanation:
net là một thị trường hiệu quả hay không hiệu quả
I need help on the first question , it's asking more or less
Answers
Answer:
more
Explanation:
As the economy increases, the need for property rights also increases, it's pretty widely accepted that property rights provide incentives to participate in the market.
Select the correct answer
When Ahmed's company files for bankruptcy, he requests the court to give him another chance to repay debt. He tells the court that he works
for a company from which he receives monthly salary. He thinks he can repay his debts with the salary he receives. Under what legal provision
can the government grant Ahmed the option of repaying his debt?
O A Chapter 15
OB. Chapter 10
OC Chapter 11
OD. Chapter 13
Reset
Next
Answers
PLEASE HELP ASAP!! WILL MARK BRAINLIEST!!
Be sure to use COMPLETE sentences when answering the following questions.
1. Compare the United States with the rest of the world, in land size, population and output of
goods and services.
Answers
Answer:
The united states are the third-largest country in the world is bigger than most countries so there are a lot more land resources and that also means that there is a big population, unlike other countries, where it has less workforce. There are also some goods and service output including vegetables & fruit.
Explanation:
I hope that helps?
How to find the best Business Development Company in Quebec, Canada?
Answers
The best way to find the best Business Development Company in Quebec, Canada is by searching online.
What does a business development do?The term business development is one that connote the ideas or notions, initiatives, as well as different activities that aid one or firm to make a business to be better. An example are: increasing revenues, Business growth and expansion, etc.
A business development company (BDC) is seen as a form of an closed-end fund that makes a lot of investments in regards to creating and financially unstable firms.
Note that a lot of BDCs are said to be publicly traded and are known to be open to retail investors.
Hence, The best way to find the best Business Development Company in Quebec, Canada is by searching online.
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To maintain financial stability in the country with reduction in deficit, Govt gets help from different international financial institutions. Discuss the different pragmas introduced by IMF, World bank, Asian development bank and Islamic development bank for Pakistan.
Answers
Answer:
Pakistan is an under developed country. The resources here are sufficient but the main constraint which hinders the country progress is heavy debt burden on it. The country is struggling to become developed as other nations in the world. Pakistan is insufficient in financial resources and all the money which country generates is offset by the interest on the debt.
Explanation:
There are times when the country has to approach different financial aid institutions in the world for the money. IMF is one of the major financial aid institution which provides finance for developing country. Pakistan has approached IMF many times and it has imposed certain covenants on the country to provide financial aid. The tax imposition, restrictions on usage of fund, military and defense restrictions are imposed on Pakistan.
Duality and interpretation of dual variables
Answers
In the event that the base issue is an expansion issue, the double issue is a minimization issue as well as the other way around.
What is Duality?By and large, the duality hypothesis tends to itself to investigate of the association between two related straight programming issues, where one of them, the base, is an expansion issue and the other, the double, is a minimization issue.
Duality of dual variables
Duality gives a ton of computational benefit in an issue with a lesser number of factors and a huge number of imperatives.
Interpretation of dual variables
The duality includes an exceptional connection between an LP issue and another, the two of which include similar unique information.
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The question is incomplete, Complete question probably will be:
Explain in brief the event of Duality and interpretation of dual variables.
The Gardner Company, a client of your firm, has come to you with the following problem. It has three clerical employees who must perform the following functions:
a. Maintain the general ledger
b. Maintain the accounts payable ledger
c. Maintain the accounts receivable ledger
d. Prepare checks for signature
e. Maintain the cash disbursements journal
f. Issue credits on returns and allowances
g. Reconcile the bank account
h. Handle and deposit cash receipts
Assuming equal abilities among the three employees, the company asks you to
assign the eight functions to them to maximize internal control. Assume that these employees will perform no accounting functions other than the ones listed.
Answers
Answer:
16
Explanation:
lol
Details
Give two examples of how Lindenwood might conduct
marketing research to improve the University. What
topic of questions would you like to see the University
ask?
Answers
Answer:
Focus Groups and Surveys
Explanation:
Lindenwood will most likely conduct focus groups and surveys to improve the University, the questions asked should be qualitative so that you have more understanding on what to do and not quantitative as although it is more likely people will answer, it is more vague
Advertising is NOT a good way to find harmful information about a product because a. it is not endorsed by the government. b. there are no regulations to control what is said. c. only favorable information is likely to appear. d. it is the most available source of information.
Answers
when the economy is in a liquidity trap, the federal reserve can use all of these policies to help the economy get out of a recession except:
Answers
When the economy is in liquidity trap, traditional monetary policy tools become less effective because interest rates are already very low and cannot be lowered further to stimulate economic activity.
What is a monetary policy?Monetary policy is a set of actions taken by a country's central bank to manage the money supply and interest rates in order to achieve specific economic goals. The primary goal of monetary policy is usually to promote price stability, which means keeping inflation within a desired range. To achieve this, central banks use tools such as open market operations, reserve requirements, and discount rates to influence the amount of money in circulation and the cost of borrowing. Changes in monetary policy can affect economic growth, employment, and the value of a country's currency. Central banks regularly adjust monetary policy based on changing economic conditions and the goals of policymakers.
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Why should you explore different careers at this point in your life? ( A. Because your teachers and parents want you to. B. So you can choose the right college or training program. 1) C. Because it's necessary to know what you want to do before you graduate high school. D. So you're prepared to make the best decisions for your needs and wants in the future.
Answers
Answer:
D. so you're prepared to make the best decisions for your needs and wants in the future.
Explanation:
Which of the following income and expense items is NOT recorded initially directly in equity?
A. The impairment of goodwill in accordance with IAS 36 Impairment of Assets, where the entity is confident that the factors giving rise to the impairment will reverse in a future period.
B. An increase in the fair values of land & buildings, where the revaluation method is used to account for land & buildings in accordance with IAS 16 Property, Plant & Equipment.
C. A change in the fair value of an investment in another entity, which is classified as an available-for-sale financial asset in accordance with IAS 39 Financial Instruments: Recognition & Measurement.
D. Foreign currency translation adjustments arising on the translation of a foreign operations financial statements from their functional currency in accordance with IAS 21 The Effects of Changes in Foreign Exchange Rates.
Answers
The income and expense items that is NOT recorded initially directly in equity is A. The impairment of goodwill in accordance with IAS 36 Impairment of Assets, where the entity is confident that the factors giving rise to the impairment will reverse in a future period.
What is equity?Equity can be regarded as the ownership interest in property which can be used in the offset by debts or other liabilities.
It should be noted that there are some of the income and expense items which is been recorded in this , this can be increase in the fair values of land & buildingsas well as others.
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Whom should you hire? Madison is a fun-loving leader who wants the best for her employees. She will pull the group together by organizing group get-togethers and outings and by making sure that every employee feels like he or she has the right to speak up. Abigail is a no-nonsense leader with a strong background in sales and merchandising. She will pull the group together by implementing training, giving directions, and making sure that everyone knows exactly what they are expected to do.
Answers
You are the chief information officer (CIO) of your company. Write a post that details a scenario in which you would choose to conduct an information systems (IS) audit for your company. Be sure to explain how the different IS departments would be affected by this audit.
Answers
Answer:
1 Agree on goals. Include all stakeholders in discussions of what should be achieved with the audit.
2 Define the scope of the audit.
3 Conduct the audit and identify threats.
4 Evaluate security and risks.
5 Determine the needed controls.
Explanation:
please mark me as brainlist
The data that organization has an abundance of is vulnerable to various cyber threats, and because even a minor misuse of data can result in significant client loss.
What is cyber threats?Any circumstance or event that has the potential to harm organizational operations, assets, individuals, other organizations.
The Nation via a system through unauthorized access, destruction, disclosure, modification of information, and denial of service.
some kinds of cyber threats are Malware, Ransomware, Distributed denial of service attacks, Spam and Phishing, Corporate Account, Takeover and Automated Teller Machine.
Thus, the data that company has many cyber threats, due to misuse of the data can be faced by the person.
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During the year, the Senbet Discount Tire Company had gross sales of $865,000. The firm’s cost of goods sold and selling expenses were $455,000 and $210,000, respectively. The company also had notes payable of $680,000. These notes carried an interest rate of 4 percent. Depreciation was $105,000. The tax rate was 21 percent.
1. What was the company’s net income?2. What was the company’s operating cash flow?
Answers
Answer:Net Income = $68,730 ; Operating cash flow=$181,730
Explanation:
Gross sales $865,000
Less:
Cost of good sold $455,000
selling Expenses $210,000
Total $200,000
Interest on notes $200,00 X 4% = 8,000
Depreciation $105,000
EBT $87,000
( $865,000- $455,000- $210,000- $8,000 - $105,000 )
less tax at 21% $18,270
(87,000 x 0.21)
Net Income $68,730
(87,000 - 18,270)
b) Operating cash flow = Net income + depreciation + interest
$68,730 + $105,000 + $8,000 =$181,730
what is the effect on market when suppliers under invest in their businesses
Answers
Answer:
Low supplyScarcityLow economic growthExplanation:
When suppliers under invest in their business, they will end up having the capacity to only produce less than the market requires. Should this happen, supply will be reduced in the market which would lead to relative scarcity all else being equal.
For economic growth to happen, there must be increasing production in an economy so if suppliers are under investing and production is low, there might be low or no economic growth.
What amount must be set aside now to generate payments of $30,000 at the beginning of each year for the next 11 years if money is worth 5.95%, compounded annually? (Round your answer to the nearest cent.)
Answers
The amount that must be set aside in the present, to generate payments of $30, 000 for the next 11 years is $251,326.61
How to find the amount to set aside?The $30, 000 generated each year is an annuity which means that the amount to be set aside today is the present value of the annuity.
Because the payments come at the beginning of the year, this is an annuity due which means that we are looking for the present value of an annuity due.
This present value can be found as:
= Annuity amount x Present value of annuity due factor, 11 years, 5.95%
= 30, 000 x 8.38
= $251,326.61
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Hi I need marketing plan draft
Answers
Answer:
hi..i also need marking plan draft