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Blizzard [7]
2 years ago
8

You are considering two insurance settlement offers. The first offer includes annual payments of $36,000, $42,000, and $50,000 o

ver the next three years, respectively, with the first payment being made one year from today. The other offer is the payment of one lump sum amount today. The relevant discount rate is 7 percent. What is the minimum amount you should accept today if you are to select the lump sum offer?
Business
1 answer:
Svetradugi [14.3K]2 years ago
5 0

Answer:

The answer is: Today you could accept any lump sum ≥ $111,144.18

Explanation:

First we must calculate the present value of the three cash flows. We can do it manually or in an excel spreadsheet using the PV formula.

Using an excel spreadsheet the present value is $111,144.18

Today you could accept any lump sum ≥ $111,144.18

You can do this calculation manually also:

pv = [$36,000 / (1 + 7%)] + [$42,000 / (1 + 7%)²] + [$50,000 / (1 + 7%)³] = $111,114.18

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All the airlines that fly to the island country of Klerwada distribute tourist information pamphlets in their flights. These pam
ivann1987 [24]

Answer:

Place Marketing

Explanation:

Based on the scenario being described it can be said that the marketing strategy that is being illustrated is known as Place Marketing. This is a business strategy that focuses on mainly attracting different investors, visitors (tourists) or talent to the company/business. This is term brings in potential customers that increase revenue for the businsess.

7 0
2 years ago
Henderson Co. has fixed costs of $36,000 and a contribution margin ratio of 24%. If expected sales are $200,000, what is the mar
Studentka2010 [4]

Answer:

25%

Explanation:

the margin of safety is the percent of sales which the company is above the break even point.

We solve for the break even point:

\frac{Fixed\:Cost}{Contribution \:Margin \:Ratio} = Break\: Even\: Point_{dollars}

\frac{36,000}{0.24} = Break\: Even\: Point_{dollars}

BEP  = 150,000

We solve for the margin of safety:

$ 200,000 - $ 150,000 = $ 50,000

Now we compare against our sales:

$ 50,000 / $ 200,000 = 0.25

5 0
2 years ago
Donny, of Donny's Doughnuts, bakes and sells 100 dozen doughnuts a day using one mixer and one fryer. His rival, Sunshine, of Su
Svetlanka [38]

Answer:

Which shop will benefit the most from its expansion?

  • B. Donny, because his workers currently have less available capital to work with

The law of marginal returns applies here, that is why Sunshine donuts didn't produce twice as many by using more machines

How much should Donny realistically expect his production to increase with the new equipment?

  • A. about 80 dozen

Similar to the additional production that Sunshine had in the past.

How much should Sunshine realistically expect her production to increase with the new equipment?

  • A. about 50 dozen

Maybe even a little more than 50 dozen, but definitely less than 80 or 100.

7 0
2 years ago
MarketPoint Sales currently has a credit limit of $5,000. Because MarketPoint Sales has an excellent credit rating, BITS is incr
azamat

Yes , the given statement is true

Explanation:

Since the credit limit is now 10k for purchases of Marketpoint, the demand requires them.

You will apply for an increasing or decreasing in the loan cap electronically and will actually receive an immediate decision.

You should wait 4 months before your credit limit is extended and wait 6 months after a drop in your credit ceiling for an increase.

8 0
2 years ago
Hubbard Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-
Ghella [55]

Answer:

Instructios are listed below.

Explanation:

Giving the following information:

Hubbard Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During January, the kennel budgeted for 2,100 tenant-days, but its actual level of activity was 2,060 tenant-days.

Wages and salaries:

Fixed= $ 2,300

Variable=  $ 7.20

Estimated Wages and Salaries= 2,300 + 7.2*2,100= $17,420

3 0
2 years ago
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