Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

QUESTION 13 Sammy wants to help a felow small business owner. The other owner, Mr. Noles offers to pay Sammy $4800 a year for 10

image text in transcribed
QUESTION 13 Sammy wants to help a felow small business owner. The other owner, Mr. Noles offers to pay Sammy $4800 a year for 10 years in exchange for a loan of $40,000. If the Interest rate is 4%, is this a good investment for Sammy? What is the present value of this annuity? A. The PV is 538,932.30 so this is a good investment for Sammy B. The PV is 548,932.30 so this is a good investment for Sammy OC The PV is $38,932.30 so this is NOT a good investment for Sammy D. The PV is $48.932.30 so this is NOT a good investment for Sammy QUESTION 14 Sammy decides to buy a stock that pays an annual dividend of $3.55. Let us assume the interest rate is 5. What is the PV of this? HINT: The maturity of a stock is considered indefinite O A 51.00 B. 510.00 OC 5100.00 0.571.00

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

More Books

Students also viewed these Accounting questions

Question

Derive the expected mean squares shown in Table 13.10.

Answered: 1 week ago