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Anit [1.1K]
2 years ago
4

Geraldine was injured in a car accident, and the insurance company has offered her the choice of $25,000 per year for 15 years,

with the first payment being made today, or a lump sum. If a fair return is 7.5%, how large must the lump sum be to leave her as well off financially as with the annuity?
A. $225,367
B. $237,229
C. $249,090
D .$261,545
E. $274,622
Business
1 answer:
Alinara [238K]2 years ago
7 0

Answer:

$237228.84

Explanation:

FV = $25,000 per year

for 15 years, with the first payment being made today, or a lump sum. If a fair return is 7.5%

we calculate present value as

PV = 25000×(1+.075)×(1-(1+.075)^-15)/0.075 = 237228.84

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Green Company is planning to introduce a new product with a 75 percent incremental unit-time learning curve for production in ba
sweet-ann [11.9K]

Answer:

210 hours

Explanation:

The learning curve rate can be found by log75%

Ln0.75 = 0.12249

1 batch requires 200 hours

The 1500 units batch will require 200 hours

For 3000 units there will be two batches of 1500 units each

200 hours * 2 batches * 0.12249 * 4.5 = 210 hours

6 0
2 years ago
Alima has invested $50,000 in an S&P 500 index ETF that charges a total expense ratio of 8 basis points per year. How much w
katrin [286]

Answer:

Alima will pay 40 dollars in management of her fund.

Explanation:

A basis point is equivalent of 1/100th of 1%  

an expense ratio of 8 baiss point will be equivalent to 0.08%

0.08/100 = 0.0008

The managenement will get this as expense ratio while invesotr will see their investment yield decreases for this amount.

On a yearly basis Alima will pay $50,000 x 0.0008 = 40 dollars

7 0
2 years ago
Triad common stock is selling for $27.80 a share and has a dividend yield of 2.8 percent. What is the dividend amount?
7nadin3 [17]

Answer:

B. $.78

Explanation:

Shares are units of ownership of a company that is sold to investors in order to get funds needed to run operations and other business needs.

The investors receive a payment on their shares form the profit made by the business. This is called dividend.

In the given instance Triad common stock is selling for $27.80 a share with dividend yield of 2.8 percent.

To get the dividend amount multiply share price by the dividend percentage.

Dividend = 0.028 * 27.80 ~ $0.78

3 0
1 year ago
Collins Group The Collins Group, a leading producer of custom automobile accessories, has hired you to estimate the firm's weigh
hammer [34]

Answer: B.) 18.67%

Explanation:

WACC = Debt/(Depth +Equity)

Equity Details ;

Stock price = $15.25 per share

Total stock = 10,000,000

DEBT details :

Total bond = 40,000

Interest on bond = $875

WACC =(40,000×875) ÷ [(40,000 × 875)+(10, 000,000×15.25)]

WACC =[ 35,000,000 ÷ (35,000,000 +152500000) ]

WACC =35,000,000 ÷ 187500000

WACC = 0.18666666666666

WACC = 18.67%

6 0
2 years ago
Read 2 more answers
How do you know if you are eligible to open and make contributions to a Roth IRA?
Whitepunk [10]

Answer:

The correct answer is letter "B":You have to earn below a certain amount to make contributions .

Explanation:

A Roth Individual Retirement Account (IRA) is the type of retirement account where contributions grow tax-free and allows individuals to withdraw funds under certain conditions. <em>People are eligible to open a Roth IRA as long as their income is less than $139,000 for singles and $206,000 for married couples- </em>information that applies for the year 2020.

7 0
2 years ago
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