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poizon [28]
2 years ago
13

You are in talks to settle a potential lawsuit. The defendant has offered to make annual payments of $27,000, $31,000, $64,000,

and $96,000 to you each year over the next four years, respectively. All payments will be made at the end of the year. If the appropriate interest rate is 4.9 percent, what is the value of the settlement offer today
Business
1 answer:
Citrus2011 [14]2 years ago
5 0

Answer:

$188,625.23

Explanation:

Data provided in the question:

Annual payments made : $27,000, $31,000, $64,000, and $96,000

Now,

Present value = ( Cash flow ) ÷ ( 1 + r )ⁿ

Here,

r is the interest rate = 4.9% = 0.049

n = year

thus,

Year         Cash flow           Present value

  1             $27,000              $25,738.79

  2            $31,000              $28171.55

  3            $64,000             $55443.86

  4            $96,000             $79281.03

======================================

Value of settlement today = $188,625.23

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A higher discount rate applied to a given flow of returns in the future (e.g., $5,000 at the end of 5 years, $10,000 at the end
zhannawk [14.2K]

Answer:

The correct option is B,decrease.

Explanation:

In calculating present value , the future value is divided by the discounting factor,hence, the higher the discounting rate, the higher the discounting factor.

Besides,since the relationship between future value and discounting factor is that of numerator-denominator relationship, it would be logical to say the higher the discounting factor , the lower the output of the mathematical operation,present value and vice versa.

From the foregoing, it is very clear a higher discount rate triggers a lower present value and vice versa

8 0
2 years ago
Please hep me solve this thank you!Tevebaugh Corporation is a manufacturer that uses job-order costing. The company closes out a
jarptica [38.1K]

Answer:

$546,750

Explanation:

Sales                  2,498,000

COGS                (1,376,000)

gross profit        1,  112,000

S&A salaries        (219,000)

other S&A           (346,000)

underapplied MO  (10,250) *

net income           536.750‬

*we need to compare the actual voerhead with the applied overhead:

<u>actual overhead:</u> 176,000 + 420,000 = 596,000

<u>applied overhead:</u>

overhead rate:

\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate

568,000 / 32,000 = 17.75

33,000 x 17.75 = 585.750

      overhead

<u>debit              credit</u>

596,000    585,750

                    10,250 underapplied overhead

As the applied was lower it is underapplied we need to recognzie more cot thus, the net income decrease.

4 0
2 years ago
Alt Corp. issues 5,000 shares of $10 par value common stock at $14 per share. When the transaction
TiliK225 [7]

Answer:

c. Common Stock $50,000 and Paid-in Capital in Excess of Par Value $20,000.

Explanation:

The journal entry is shown below:

Cash $70,000  (5,000 shares × $14)

     To Common stock $50,000  (5,000 shares × $10)

      To Additional Paid in capital in excess of par value - Common stock   $20,000  (5,000 shares × $4)

(Being the issuance of the common stock is recorded)

For recording this we debited the cash as it increased assets and at the same time it also increased the overall stockholder equity so common stock and the additional paid in capital for common stock is credited

6 0
2 years ago
Otis, the manager of a camera store, believes that his store may be closed by corporate in the near future, so he cannot sleep w
Wewaii [24]

Answer: His district manager may be influenced by <u><em>availability bias. </em></u>

Explanation:

Availability bias may influence his manager because the district manager has this information in his recent memory. He may consider this to be an accurate description of Otis's behavior all of the time, and not just in recent times. Since everything has occurred since the last evaluation he may be judged solely on these actions and not of his overall actions and work ethic in the past.

There are several ways to avoid availability bias such as:

  • Set high standards
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  • Utilize your network
  • Seek input from your team

7 0
2 years ago
Calculate the product of savings and growth_multiplier. Store the result in year1. What do you think the resulting type will be?
alexandr1967 [171]

<u>Explanation:</u>

<u></u>

growth_multiplier  is 1.1

savings = 100

desc = "compound interest "

# Place product of growth_multiplier and savings  to year 1

Year 1 =  growth_multiplier* savings  

# Print  

print(type(year1))

Now,

# Place addition of desc & desc  

doubledesc  will be  desc + desc

# Print doubledesc

print(doubledesc)

<u></u>

8 0
2 years ago
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