A property will provide $6,325 a year forever. If its value is $115,000, what must be...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A property will provide $6,325 a year forever. If its value is $115,000, what must be the discount rate? Note: Enter your answer as a percent rounded to 2 decimal places. Discount rate % A property will provide $6,325 a year forever. If its value is $115,000, what must be the discount rate? Note: Enter your answer as a percent rounded to 2 decimal places. Discount rate %
Expert Answer:
Answer rating: 100% (QA)
To find the discount rate we can use the formula for the present val... View the full answer
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
Posted Date:
Students also viewed these finance questions
-
A firm offers terms of 2/10, net 30 a-What effective annual interest rate does the firm earn when a customer does not take the discount? (Use 365 days a year. Do not round intermediate calculations....
-
Sundae Inc. is deciding whether to undertake a new project. The project is expected to be riskier than the firm's current operations. For cost of capital estimation management wants to use the...
-
A bond with a face value of $1,000 has 10 years until maturity, carries a coupon rate of 8.7%, and sells for $1,130. Interest is paid annually. a. If the bond has a yield to maturity of 9.3% 1 year...
-
Does the customer buying process end when a customer buys some merchandise? Explain your answer.
-
Abandonment Decisions Allied Products, Inc., is considering a new product launch. The firm expects to have annual operating cash flow of $25 million for the next 10 years. Allied Products uses a...
-
Figure P32.41 shows resistors \(R_{1}=10.0 \Omega\) and \(R_{2}=20.0 \Omega\) connected in parallel to an AC source. (a) If the maximum current in the circuit is \(12 \mathrm{~A}\), what is the...
-
For the goodness-of-fit test to be valid, each of the _______________ frequencies must be at least 5. In Exercises 9 and 10, fill in each blank with the appropriate word or phrase.
-
Bordner Company manufactures HVAC (heating, ventilation, and air conditioning) systems for commercial buildings. For each new design, Bordner faces a 90 percent learning rate. On average, the first...
-
What elements made the ALDUB and Think Different Campaign of Apple viral using the lens of the Rules of Epidemics * The Law of the Few * The Stickiness Factor *The Power of Context
-
REPCO performs warranty repair work for name-brand kitchen appliances. REPCO bills appliance manufacturers on a costplus basis. It has a job-costing system that computes the cost of each order by...
-
Let A, B, and C be sets. Using an element argument, prove (ANB)-C (A-C)n (B-C)
-
What is the magnitude and direction of the magnetic force on the rod when the switch is closed? The current can be found by using I=V/R , where R is the resistance in ohms. T X 0.40 m 0.25 m B =...
-
Isabella is a 10-year-old 5th grader and an English learner. She was born in Mexico. Both of her parents work in entry-level positions in the hospitality industry. Her extended family includes aunts,...
-
Suppose the Bank of Canada sells $50,000 in bonds to Bank 1, and Bank 1 and all other banks have no excess reserves prior to this purchase. a. What type of policy is this? A. Contractionary fiscal...
-
Coulomb's law for the magnitude of the force F between. wo particles with charges Q and Q' separated by at distance d is |F| = K 20 1 where K = and 4760 08.854 x 10-12 C2/(N m) is the permittivity of...
-
You are looking to purchase a house valued at $325,000 in the suburbs of Kansas City. You decide to pay 20% of the value of the house as down payment and borrow the rest at an APR of 3.20% for 20...
-
Scaly Pete's son, Kyle, has decided to not go to college and be a DJ. Pete has consistently been putting annuity payments into a savings account for Kyle's college fund. Pete gives the account over...
-
Per Bag Direct materials: 25 pounds of CWhiz-2000 @ $0.08/lb. = $ 2.00 Direct labor: 0.05 hour @ $32.00/hr. = $ 1.60 The company manufactured 100,000 bags of Cheese-Be-Good in December and used...
-
Ken (age 31) and Amy (age 28) Booth have brought you the following information regarding their income, expenses, and withholding for the year. They are unsure which of these items must be used to...
-
Fisafolia Corporation has gross income from operations of $220,000 and operating expenses of $160,000 for 2012. The corporation also has $20,000 in dividends from publicly traded domestic...
-
John Williams (age 42) is a single taxpayer, and he lives at 1324 Forest Dr., Reno, NV 89501. His Social Security number is 555-94-9358. John's earnings and withholdings as the manager of a local...
-
Assume that an account has the following characteristics: Number of items in the account-300 Recorded amount- \(\$ 600,000\) Sample size-100 Required: a. If the sample mean is \(\$ 1,800\) and mean...
-
You desire to estimate the amount of the inventory of your client. Draper. Inc. You satisfied yourself earlier as to the inventory quantities. During the audit of the pricing and extension of the...
-
The following data for a substantive test using sampling are available: Population recorded amount- \(\$ 200,000\) Tolerable misstatement \(\$ 10,000\) Number of items in the population-200 Risk of...
Study smarter with the SolutionInn App