You are evaluating a growing perpetuity product from a large financial services firm. The product promises an initial payment of $24,000 at the end of this year and subsequent payments that will thereafter grow at a rate of 0.04 annually. If you use a discount rate of 0.09 for investment products, what is the present value of this growing perpetuity? Round to two decimal places.

Answers

Answer 1

Answer:

The present value of this growing perpetuity is $499,200.

Explanation:

If cashflow is growing at a constant rate, then we call this a growing perpetuity.

Present Value of Growing Perpetuity = [Payment × ( 1 + growth rate)] ÷ [(discount rate - growth rate)]

                                                              = $24,000 (1.04) ÷ (0.09 - 0.04)

                                                              = $499,200


Related Questions

how does worse working conditions effect labour productivity?

Answers

Better working conditions result in increased productivity among workers, which leads to the improvement in profitability in these factories. Furthermore, instead of suppressing wages, more profitable factories with more productive workers also pay workers more.

The rising income gap among highly educated workers in the United States:_____.
a. has not been a cause of concern for income inequality policy makers.b. has been present for the past 80 years.c. is an important feature of the increase in income inequality.d. is less of a concern than the effect of increased immigration on income inequality.

Answers

Answer:

c. is an important feature of the increase in income inequality

Explanation:

Income inequality measures how unevenly income is distributed throughout a population.

At the end of its first year, the trial balance of Ivanhoe Company shows Equipment $30,600 and zero balances in Accumulated Depreciation—Equipment and Depreciation Expense. Depreciation for the year is estimated to be $3,620. Prepare the adjusting entry for depreciation at December 31. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Answers

Answer:

Dr Depreciation Expense $3,620

Cr Accumulated Depreciation-Equipment $3,620

Explanation:

Based on the information given we were told that the company had zero balances in both Accumulated Depreciation -Equipment as well as the Depreciation Expense in which the Depreciation amount for the year is estimated to be $3,620 which means that the adjusting entry for depreciation at December 31 will be recorded as:

Preparation of Journal entry

Dec. 31

Dr Depreciation Expense $3,620

Cr Accumulated Depreciation-Equipment $3,620

Alternating periods of economic expansion and recession are known as the:_______.
A) Fisher effect.
B) business cycle.
C) market risk.
D) systematics.

Answers

I think that the answer is b

Andre, a commercial real estate developer, has been described as having “the gift of gab.” To which personality category does Andre likely belong? social artistic enterprising investigative realistic

Answers

Answer:

enterprising

Explanation:

State two benefits a country may gain from immigration.

Answers

Answer:

A country can gain from immigration when immigration is controlled so that immigrants contribute to society. If the immigrants have needed skills and come in appropriate numbers this is good for the country. Also by getting people from all over, they will benefit by having a much richer culture.

Explanation:

Answer:

Immigration can give substantial economic benefits – a more flexible labour market, greater skills base, increased demand and a greater diversity of innovation. However, immigration is also controversial. It is argued immigration can cause issues of overcrowding, congestion, and extra pressure on public services.

Explanation:

_____ refers to how people act when they're purchasing products to use either directly or indirectly to produce other products.

Answers

Business Buyer Behavior

Business Buyer behavior describes how people act when they are buying products to use either directly or indirectly to produce other products.

As part of developing your company's marketing strategy, you are tasked with analyzing the new-product capabilities, channel strength, advertising abilities, service capabilities, marketing research abilities, and market and consumer knowledge. Which aspect of your company's capabilities are you assessing

Answers

Answer:

Marketing Skills

Explanation:

Marketing skills refer to the tact to create the market for the product or service, which involves various activities as like:

Analysing the market, analysing the customer needs, knowing the customer tendency and spending capacity, etc:

In the given instance, all the factors disclosed are related to marketing skills.

With all the factors and knowledge the company aims to gain maximum customer satisfaction and reach maximum potential customers.

Eaton Tool Company has fixed costs of $340,400, sells its units for $80, and has variable costs of $43 per unit. a. Compute the break-even point. b. Ms. Eaton comes up with a new plan to cut fixed costs to $270,000. However, more labor will now be required, which will increase variable costs per unit to $46. The sales price will remain at $80. What is the new break-even point? (Round your answer to the nearest whole number.)

Answers

Answer and Explanation:

The computation is shown below:

But before reaching to the final answers, first determine the contribution margin per unit which is

a. Contribution margin per unit =Sales-Variable cost  

= $80 - $43

= $37 per unit

Now

Breakeven = Fixed expenses ÷ Contribution margin

= $340,400 ÷ $37

= 9,200 units

b.Contribution margin = Sales - Variable cost  

= $80 - $46

= $34 per unit

Now

New Breakeven = Fixed expenses ÷ Contribution margin

= $270,000 ÷ 34

= 7,941 units

Testing a prototype of a new product is an example of a:______
A. Unit-level activity
B. Batch-level activity
C. Product-level activity
D. Organization-sustaining activity

Answers

Answer:

Option C (Product-level activity) will be the correct choice.

Explanation:

Action being taken to encourage a single component as well as practice is a product-level practice or activity. These acts shall be taken regardless of the quantities of manufacture or perhaps the quantity of operation connected with the commodity.

Examples of product-level tasks are as continues to follow:

The expense of the business analyst again for commodity. The expense of developing a product. Cost to produce the packaging of the items.

The other options really aren't connected to the circumstance in question. But the above solution seems to be the correct one.

What type of engineer is Leila in the following scenario?
Leila has a terrific idea for designing a toaster that butters the bread.
electrical engineer
O civil engineer
hardware engineer
manufacturing engineer

Answers

Answer:

Electrical Engineer

Explanation:

An electrical engineer creates and alters products that rely on electricity as their main power source(like a toaster), aswell as working on electrical systems like you and I have in our house.

Answer:

Electrical Engineer

Explanation:

An electrical engineer creates and alters products that rely on electricity as their main power source(like a toaster), aswell as working on electrical systems like you and I have in our house.

As businesses have become more dependent on information systems, they have faced a(n): decrease in the number and severity of security threats. increase in the number and severity of security threats. decrease in the number of security threats, but an increase in their severity. increase in the number of security threats, but a decrease in their severity.

Answers

Answer:   increase in the number and severity of security threats.

Explanation: An increase in the number and severity of security threats can be directly linked to the increasing dependency of businesses on information systems which are used in turning raw data into useful information for decision making in businesses. They are designed to support a particular process within an organization or to carry out very specific analysis. The increase in the number and severity of security threats which target these data for nefarious purposes has led to businesses struggling to hire enough qualified professionals to safeguard against the growing threat. Hence, a strong, smart digital workforce is essential to combat the more frequent, more sophisticated threats emanating from across governments, businesses and organizations.

(3) A total of 1000 units of a certain product must be completed by the end of the current week. It is now late Monday afternoon, so only four days (8-hour shifts) are left. The standard time for producing each unit of the product (all manual operations) is 11.65 min. How many workers will be required to complete this production order if it is assumed that worker efficiency will be 115%

Answers

Answer:

6 workers

Explanation:

Calculation for How many workers will be required to complete this production order

First step is to find the Workload WL

Workload WL= 1,000(11.65)/1.15

Workload WL=11,650/1.15

Workload WL = 10,130.4 min

Workload WL converted from minutes to hour= 168.84 hr

Second step is to find the Available time

Available Time= 4(8.0)

Available Time= 32 hr/worker

Last step is to find How many workers will be required to complete this production order

Workers= 168.84/32

Workers = 5.28 Approximately 6 workers

Therefore 6 workers will be required to complete this production order.

Which Worker is commonly employed by the government?
A. Factory Supervisor
B. Agricultural Inspector
C. Cleaning Worker
D. Slaughterhouse Butcher

ANSWER is B: Agricultural Inspector

Answers

Answer:

B

Explanation:

Answer:

the answer is b

Explanation:

The quantity theory of money holds that:______.

Answers

Answer and Explanation:

The quantity theory of money talks about money supply and price level, and their relationship with one another.

In any given economy, the quantity Theory of money states that money supply and price level are directly proportional. This is to say that when there is a change such as an increase in money supply, there would also be a proportional increase in price Ievel. Also when there is an increase in price level, there would also be a proportional increase in money supply.

Your uncle has said that if you agree to finish college he will give you equal payments of $1,500 at the end of each year for the next nine years. If the annual interest rate stays constant at 6%, what is the value of these payments in today’s dollars? Round your answer to the nearest whole dollar.

Answers

Answer:

PV= $10,202.54

Explanation:

Giving the following information:

Cash flow= $1,500

Number of periods= 9 years

Interest rate=  6%

First, we need to calculate the future value using the following formula:

FV= {A*[(1+i)^n-1]}/i

A= annual cash flow

FV= {1,500*[(1.06^9) - 1]} / 0.06

FV= $17,236.97

Now, the present value:

PV= FV/(1+i)^n

PV= 17,236.97/(1.06^9)

PV= $10,202.54

Which is the first step in creating a personal plan for managing stress?

Answers

Type D The first step in creating a personal plan for managing stress is to design your plan. investigate support groups. seek professional help. identify your stressors.

The first step in creating a personal plan for managing stress is to  identify whether an individual is stressed or not.

What is stress?

A state of physical or mental tension is defined as stress. It might be triggered by any occurrence or concept that makes you unhappy, angry, or nervous.

Stress is your body's natural response to a challenge or demand. Stress may be advantageous in short bursts, such as when you need to avoid danger or meet a deadline.

The first to manage the stress is to determine whether or whether you are stressed, Then Determine your source of stress.

Thirdly, figure out the source of the stressor. Lastly, Establish and implement an effective stress management approach.

Therefore, it can be concluded that stress management can be done through analyzing the stress.

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The Nelson Company has $1,522,500 in current assets and $525,000 in current liabilities. Its initial inventory level is $395,000, and it will raise funds as additional notes payable and use them to increase inventory. How much can Nelson's short-term debt (notes payable) increase without pushing its current ratio below 2.2? Do not round intermediate calculations. Round your answer to the nearest dollar.

Answers

Answer:

$308,750

Explanation:

Current ratio = Current asset / Current liabilities

To get the short term debt increase, to the value of current assets and current liabilities, an amount must be added whereas the result must be 2.2

1,522,500 + y / 525,000 + y = 2.2

1,522,500 + y = 2.2 × (525,000 + y)

1,525,500 + y = 1,155,000 + 2.2y

1,525,500 - 1,155,000 = 2.2y - y

370,500 = 1.2y

y = 370,500 / 1.2

y = 308,750

It therefore means that the maximum amount that should be borrowed to purchase the inventory is $308,750

Explain which expenditure category of GDP changes and the direction of the change that results for each transaction described. a. A domestic business purchases a domestically produced computer to use in a business office. b. A domestic business produces a computer that is sold to a foreign company. c. The federal government purchases a domestically produced computer to use in a court house. d. A domestic household purchases a domestically produced computer to use in a home. e. A domestic household purchases a computer produced in a foreign country to use in a home.

Answers

Answer:

Investment spending increases

b. Net export increases

c. Government spending increases

d. consumption spending increases

e. consumption spending increases

net export decreases

Explanation:

Gross domestic product is the total sum of final goods and services produced in an economy within a given period which is usually a year

GDP calculated using the expenditure approach = Consumption spending by households + Investment spending by businesses + Government spending + Net export

Net export = exports – imports

When exports exceed import there is a trade deficit and when import exceeds import, there is a trade surplus.  

A domestic business purchases a domestically produced computer to use in a business office increases business inventory.

The purchase of a computer by a foreign company increases export. export is a positive function of net export, so net export increases

The government's purchase increases government spending

The purchase of a computer is a durable purchase by households. This increases consumption spending

Also, the purchase of a computer from a foreign country is an import Import is a negative function of net export. so net export reduces

The financial value of all the welfare and commodities manufactured in a country during a definite period is called gross domestic product (GDP).

The answers are:

a. A domestic business purchases a domestically produced computer to use in a business office: Investment spending rises

It raises the business inventory as they are buying the goods.

b. A domestic business produces a computer that is sold to a foreign company: Net export raises.

Exportation is a positive determinant in GDP and the acquisition of domestically manufactured goods globally will raise the GDP.

c. The federal government purchases a domestically produced computer to use in a courthouse: Government spending rises.

Buying was done by the government so that their spending will raise.

d. A domestic household purchases a domestically produced computer to use in a home: increment in consumption spending.

The possession of the system by a household will raise its spending.

e. A domestic household purchases a computer produced in a foreign country to use in a home: consumption spending increases and net export decreases.

The buying of systems from a foreign country will raise the imports and spending hence reducing the export.

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Henry Ford had a big influence in what era

Answers

Henry Ford started the Ford Motor Company in the late nineteenth century and revolutionized the manufacturing business across the country.

Answer:

Production Era

Explanation:

Asia trippin

John Maynard Keynes supported economics policies that?

A). encouraged businesses to maximize their productivity.
B). protected citizens during periods of economic difficulty .
C). removed the government from most economic decisions.
D). led to workers collectively owning all factories and land.

Answers

John Maynard Keynes supported economics policies that "Protected citizens during periods of economic difficulty

Option (b) is correct

John Maynard Keynes was a leading economist of the 20th century who advocated for government intervention in the economy to mitigate the effects of economic downturns. He believed that government spending during periods of economic hardship could stimulate demand and prevent unemployment. This idea is known as Keynesian economics.

Keynes argued that government spending on public works projects and social programs during times of economic recession could create jobs and increase demand for goods and services, which would, in turn, help to stimulate economic growth. He also believed that governments should use monetary policy tools, such as lowering interest rates, to encourage borrowing and investment during economic downturns.

John Maynard Keynes supported economic policies that aimed to protect citizens during periods of economic difficulty by advocating for government intervention to stimulate demand and prevent unemployment.

Therefore the correct answer is (b)

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A taxpayer, age 64, purchases an annuity from an insurance company for $64,000. She is to receive $533 per month for life. Her life expectancy is 20.8 years from the annuity starting date. Assuming that she receives $6,400 this year, what is the exclusion percentage, and how much is included in her gross income?

Answers

Answer:

Exclusion percentage = 48.10

$3321.6 IS included in her gross income

Explanation:

Exclusion Percentage = Investment in Total /(Payments made * Life Expectancy *Total months in a year)

Exclusion Percentage = $64,000 / ($533 * 20.8 *12)

Exclusion Percentage = 0.4810

= 48.10%

The Included in income amount can be calculated using the following formula:

Included in Income = (Received amount - Return on Capital)

& Return on Capital = ( Received amount * Exclusion percentage)

When  ROC = $6,400 * 0.4810 = $3078.4

Hence, Included in income = $6,400 - $3078.4 = $3,321.6

For cost-based pricing in multiple-product companies, which of the following is most likely to be used as a possible cost basis?
a. Direct materials costs
b. Variable selling costs
c. Administrative costs
d. Corporate overhead costs

Answers

Answer:

A. i think

Explanation:

The correct answer is A direct materials costs

Please review example below and indicate what is wrong with the bucket. (2 points)

Output • S Output 01/02/2019 CURS PODE 109,316,00 1265013000 135,28,000.00 18,517,00.00 4,04,000 125,738,000 15,424,0.00 147.540,000

Output · S Output 01/02/2019 CURS 100E 109,314,000 126,013,000.00 125,28,000.00 18,517,000 46,04,000 125,788,00.00 135,424,00 147,540,000

Output : 5 Output - 01/02/2019 CURA PODE -109,316,00 -26,013,000.00 -15.20,000.00 184,517,00.00 49,04,000 -125,758,00 -135,424,000.00 - 149,500.00

A) A sign should be flipped

B) A label is incorrect

C) Scaling is incorrect

D) A value label is incorrect

Answers

Answer:

A) A sign should be flipped

Explanation:

The given value labels are correct as output. The signs place should be flipped as then there will be negative sign with the output which will make the output invalid. The brackets and values are correctly entered which are giving the desired results.

Last year a small accounting firm paid each of its five clerks $25,000; two junior accountants received $60,000 each; and the firm’s owner got paid $255,000. This year the firm gave no raises to the clerks and the junior accountants, but the owner’s salary is increased to $455,000. How does this year’s raise affect the average salary for the accounting firm

Answers

Answer:

the firm's average salary increased by 40%

Explanation:

the average salary for last year = [(5 x $25,000) + (2 x $60,000) + $255,000] / 6 = $500,000 / 6 = $83,333.33

this year's average salary = [(5 x $25,000) + (2 x $60,000) + $455,000] / 6 = $700,000 / 6 = $116,666.67

this means that the average salary has increased by = [($116,666.67 - $83,333.33) / $83,333.33] x 100 = 40%

Ordonez Lumber Yard has a current accounts receivable balance of $442,016. Credit sales for the year just ended were $9,358,610. What is the receivables turnover? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Receivables turnover times What is the days’ sales in receivables? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Days’ sales in receivables days How long did it take on average for credit customers to pay off their accounts during the past year? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Average collection period days

Answers

Answer:

Receivables turnover= Sales/ Accounts Receivables

Receivables turnover= $9,358,610 / $442,016

Receivables turnover= 21.173 times

Days' sales in receivables= 365 days/ Receivables turnover

Days' sales in receivables= 365 days/ 21.173 times

Days' sales in receivables= 17.239 days

Average collection period= Days' sales in receivables = 17.239 days

You bought 600 shares of stock at 24.20 each. At the end of year you received a total of $720 in dividends and your stock was worth a total of $15,678. What was your total dollar capital gain and total dollar return.

Answers

Answer:

Total dollar capital gain= 1,158

Total dollar return= $1,878

Explanation:

600 shares is bought at $24.20 each

At the end of the year $720 is received as dividend

The stock is worth a total of $15,678

The total dollar capital gain can be calculated as follows

=$15,678-600×24.20

= 15,678-14,520

= 1,158

The total dollar return can be calculated as follows

=720+15,678-600×24.20

= 16,398-14,520

= $1,878

Hence the total dollar capital gain is 1158 and the total dollar return is $1,878

You are given the following long-run annual rates of return for alternative investment instruments: U.S. Government T-bills 3.80 % Large-cap common stock 11.65 Long-term corporate bonds 5.35 Long-term government bonds 4.40 Small-capitalization common stock 12.70 The annual rate of inflation during this period was 2 percent. Compute the real rate of return on these investment alternatives. Do not round intermediate calculations. Round your answers to two decimal places.

Answers

Answer:

0.0176

0.0946

0.0328

0.0235

0.1049

Explanation:

The formular that is used to calculate the real rate of return is

(1+return)/(1+inflation) -1

The real rate of return for U.S. Government T-bills 3.80% can be calculated as follows

Inflation rate = 2%

Return= 3.80%

Real rate of return= (1+3.80/100) / (1+2/100)

= (1+0.038)/(1+0.02) -1

= 1.038/1.02 -1

= 1.0176 -1

= 0.0176

The real rate of return for large cap common stock 11.65% can be calculated as follows

Inflation rate= 2%

Return= 11.65%

Real rate of return= (1+11.65/100)/(1+2/100)-1

= (1+0.1165)/(1+0.02)-1

= 1.1165/1.02 -1

= 1.0946 -1

= 0.0946

The real rate of return for long term corporate bond 5.35% can be calculated as follows

Inflation rate= 2%

Return= 5.35%

Real rate of return= (1+5.35/100)/(1+2/100) -1

(1+0.0535)/(1+0.02) -1

1.0535/1.02 -1

= 1.0328 -1

= 0.0328

The real rate of return for long term government bond 4.40%

Inflation= 2%

Return= 4.40%

Real rate of return= (1+4.40/100)/(1+2/100) -1

= (1+0.044)/(1+0.02) -1

= 1.044/1.02 -1

= 1.0235-1

= 0.0235

The real rate of return for small capitalization common stock 12.70% can be calculated as follows

Inflation rate= 2%

Return= 12.70%

Real rate of return= (1+12.70/100)/(1+2/100) -1

= (1+0.127)/(1+0.02) -1

= 1.127/1.02 -1

= 1.1049-1

= 0.1049

Devin transfers a building (adjusted basis of $15,000 and fair market value of $90,000) to Suns Corporation. In return, Devin receives 80% of Suns Corporation's stock (worth $65,000) and an automobile (fair market value of $5,000). In addition, there is an outstanding mortgage of $20,000 (taken out 15 years ago) on the building, which Suns Corporation assumes. With respect to this transaction, Devin’s recognized gain is

Answers

Answer:

$62,000

Explanation:

Calculation for Devin’s recognized gain

Fist step in to calculate the Consideration amount received by Devin’s

Consideration received by Devin’s=$65,000×0.80+$5,000+$20,000

Consideration received by Devin’s=$77,000

Second step is less the adjusted basis to the Consideration received by Devin’s in order to know the gain

Consideration received by Devin’s $77,000

Less Adjusted basis $15,000

Gain $62,000

($77,000-$15,000)

Therefore Devin’s recognized gain is $62,000

A higher interest rate (discount rate) would:________
A) Reduce the price of corporate bonds.
B) Reduce the price of preferred stock.
C) Reduce the price of common stock.
D) all of the above.

Answers

Answer: C) Reduce the price of common stock.

Explanation:

A Rise in interest rates would tend to contradict the economy. Because Everyone cuts back on thier spending because there is less money to spend. This results in earnings falling or dropping, next affected are stock prices. Conversely, when rates drops everyone has more money to spend and earnings tend to rise along with prices.

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