Assume that you are going to receive $50,000 in 10 years. The current market rate of interest
Question:
a. Using the present value of $1 table in Exhibit 5, determine the present value of this amount compounded annually.
b. Why is the present value less than the $50,000 to be received in the future?
Exhibit 5: Partial Present Value of an Annuity Table
Transcribed Image Text:
Present Value of an Annuity of $1 at Compound Interest 6% 0.943 1.833 2.673 3.465 4212 4.917 5.582 6.210 6.802 .360 10% 0.909 1.736 2.487 3.170 3.791 4.355 4.868 5.335 5./59 6.145 12% 0893 1690 2.402 3.037 3.605 15% 0.870 1.626 2.283 2.855 3.353 3.785 4.160 4.487 Year 20% 0.833 1.528 2.106 2.589 2.991 3.326 3.605 3.837 4.031 4.192 4564 4968 5328 650 10 5.019
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 70% (10 reviews)
a 50 000 067556 33 778 b Cash o...View the full answer
Answered By
Srikar Kusuma
Since my schooling onwards I've been keen on teaching my fellow peers about the concepts and subjects etc. My friends also used to ask me certain doubts which i was more than happy to help with. There began the tutoring experience for me. In my undergraduation as well, I used to tutor my juniors and fellow peers in the major i took in. It was a worthy experience for me as i was able to brush up my technical skills through knowledge transfer in this way.
0.00
0 Reviews
10+ Question Solved
Related Book For
Financial And Managerial Accounting
ISBN: 9781337119207
14th Edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
Question Posted:
Students also viewed these Managerial Accounting questions
-
Assume that you are going to buy a new car for $25,000. You will be able to make a down payment of $3,000. The remaining $22,000 will be financed by the dealer. The dealer computes your monthly...
-
Assume that you are going to test computerized controls that your client has put in place. Consider the concept related to program changes. What is the important concept for you to consider when...
-
Assume that you are going to hire three new employees for the department store you manage. One will sell shoes, one will manage the toy department, and one will work in the stockroom. Identify the...
-
The time it takes to get a cars oil changed at Speedy Lube is distributed normally with a mean of 12 min and a standard deviation of 2 min. Compute the probability that a customer will have her or...
-
The financial statements of P&G are presented in Appendix 5B or can be accessed at the books companion website, www.wiley.com/college/kieso. Instructions Refer to P&Gs financial statements and the...
-
Specify the moment estimators for the p and er2 for the lognormal distribution.
-
Instant Computing is a contract manufacturer of laptop computers sold under brand named companies. Presented are Instants budgeted and actual contribution income statements for October. The company...
-
Use Worksheet 5.3. Jennie and Caleb McDonald need to calculate the amount that they can afford to spend on their first home. They have a combined annual income of $47,500 and have $27,000 available...
-
Classify the two given samples as independent or dependent. Sample 1: Sample 2: The number of hours 41 kids spend playing video games in a week The number of hours 48 adults spend playing video games...
-
Alpine Expeditions operates a mountain climbing school in Colorado. Some clients pay in advance for services; others are billed after services have been performed. Advance payments are credited to an...
-
Mia Breen Corp. produces and sells wind-energy-driven engines. To finance its operations, Mia Breen issued $18,000,000 of 20-year, 4% callable bonds on May 1, Year 1, at their face amount, with...
-
Seventy-Two Inc., a developer of radiology equipment, has stock outstanding as follows: 80,000 shares of cumulative preferred 3% stock, $20 par and 400,000 shares of $25 par common. During its first...
-
In your own words, what is an inventory driver? What is the difference between a controllable inventory driver and an uncontrollable inventory driver? Give examples.
-
Q1 a) If conditions in the atmosphere are isothermal and the temperature at zero altitude is 15C and the pressure is 101kNm2, what is the density of air at 12,000m. Assuming conditions are instead...
-
Please write this code in Java and place comments where necessary to understand. Also, please comment the classes etc. Please complete everything. Ignore the mentions of GitHub. For this project,...
-
3. A symmetrical framework consisting of three pinconnected bars is loaded by a force P (see figure 3). The angle between the inclined bars and the horizontal is a 52. The axial strain in the middle...
-
Problem 6 Find a new basis in which the vectors A and B from Problem 5 are aligned with the 2 and 3 basis vectors, respectively.
-
8.9 LAB: Function calls Given the following C program and the mapping of registers to variables, complete the MIPSzy implementation of Main. Do not implement return 0; in main(). int Dif (int a, int...
-
(a) Find the vertical and horizontal asymptotes. (b) Find the intervals of increase or decrease. (c) Find the local maximum and minimum values. (d) Find the intervals of concavity and the inflection...
-
Extend Algorithms 3.4 and 3.5 to include as output the first and second derivatives of the spline at the nodes.
-
The law firm of Clark and Lankau accumulates costs associated with individual cases, using a job order cost system. The following transactions occurred during May: May 2. Charged 200 hours of...
-
The Crosby Company provides advertising services for clients across the nation. The Crosby Company is presently working on four projects, each for a different client. The Crosby Company accumulates...
-
Churchill Co. uses a job order cost system. The following data summarize the operations related to production for November: a. Materials purchased on account, $ 528,000. b. Materials requisitioned, $...
-
On January 1, Davis issued $800,000 in 10 year, 7% bonds. The bonds were priced to yield 9%. Interest payments are made on June 30 and December 31. Make all necessary entries for 2022 through Dec....
-
Original Schedule Bracket (0) SS $ $ $ 132,900.00 Rate (1) 132,900.00 12.40% 0.00% New Schedule Bracket Rate (0) (1) S - $ 132,900.00 12.40% $ 132,900.00 $ 250,000.00 0.00% SS $ 250,000.00 $...
-
TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false. 1) Low-volume products often require more special handling than high-volume products.. 2) When overhead is properly...
Study smarter with the SolutionInn App