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s2008m [1.1K]
2 years ago
11

An athlete signs a five-year endorsement deal with a prominent sponsor. Under this deal, the athlete will receive $5,000 each ye

ar for the first three years and $6,500 each year for the final two years. What is the present value of the total deal if the payments are discounted 6%
Business
1 answer:
Iteru [2.4K]2 years ago
3 0

Answer:

PV= $23,370.85

Explanation:

Giving the following information:

Cash flow (1-3)= $5,000

Cash flow (4-5)= $6,500

Discount rate= 6%

To calculate the present value, first, we need to calculate the final value:

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

A= annual cash flow

Year 1-3:

FV= {5,000*[(1.06^3) - 1] / 0.06

FV= 15,918

Year 4-5:

FV= {6,500*[(1.06^2) - 1]} / 0.06

FV= 13,390

Now, the present value:

PV= FV/(1+i)^n

PV= 15,918/(1.06^3)= 13,365.06

PV= 13,390/(1.06^5)= 10,005.79

PV= $23,370.85

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Pachacha [2.7K]

Answer:

The required return on equity is 17%.

Explanation:

The required rate of return is the minimum return required by the investors to invest in a stock. The required rate of return is calculated under the CAPM approach based on the the stock's beta, the risk free rate and the market risk premium. The formula for the required rate of return is,

r = rRF + beta * rpM

r = 0.05 + 1.5 * 0.08

r = 0.17 or 17%

3 0
2 years ago
Relevant financial information for Gordon, Inc. andJordan, Inc. for the current year is provided below. ($ in millions) Net sale
Yakvenalex [24]

Answer:

C) Return on Assets is 7.8% for Gordon and 6.2% for Jordan. Thus, Gordon is more profitable than Jordan

Explanation:

please find attached a clear image of the table used in answering this question

Return on assets = net income / average total assets

average total assets = (beginning assets  + ending asset) / 2

for gordon

average total assets = (1420 + 1600) / 2 = 1510

ROA = 118 / 1510 = 0.078146 = 7.8%

For Jordan,

average total assets = (2,230 + 2,020) / 2 = 2125

ROA = 132 /  2125 = 0.062118 = 6.2118%

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3 0
2 years ago
The first step in the decision-making process requires you to do what?
Semmy [17]

Answer:

think.....all you have to do is think XD

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4 0
2 years ago
Symon's Suppers Co. has announced that it will pay a dividend of $4.23 per share one year from today. Additionally, the company
sweet-ann [11.9K]

Answer:

$68.23

Explanation:

In this question, we apply the dividend growth rate model which is shown below:

The computation of the current share price is shown below:

= (Current year dividend) ÷ (Rate of return on company stock - growth rate)

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= ($4.23) ÷ (6.2%)

= $68.23

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2 years ago
Which action would most likely cause the equal employment opportunity commission to intervene?
Alenkasestr [34]
Answer;
The action that would most likely cause the Equal employment opportunity commission to intervene; 
- A company posts an ad looking to hire a male computer programmer. 

Explanation; 
Equal employment opportunity entails the provision of equal opportunity for employment and advancement within a company or an organization to all individuals, including those that fall under the protected classes. The protected classes include, race, color, age, national origin, disability, reprisal and sex.  
6 0
2 years ago
Read 2 more answers
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