Today is May 1, 2016. Elmaan Ngyuen has just been drafted by the Toronto Raptors. He...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Today is May 1, 2016. Elmaan Ngyuen has just been drafted by the Toronto Raptors. He will be earning $3,000,000 for 2016, $4,000,000 per year from 2017 to 2020, $5,000,000 per year from 2021 to 2026, $6,000,000 per year from 2027 to 2033, $4,000,000 for 2034, $3,000,000 for 2035, and $2,000,000 for 2036. Assume all payments are made on December 31; therefore first payment will be on December 31, 2016. Assume the discount rate of 9.7618% per year compounded semiannually till the end of year 2026, and 7.7706% per year compounded quarterly from 2027 to 2036. a. Determine the present value of the above payments on May 1, 2016. b. If he were to receive an equal annual salary at the end of each of the year 2016 to 2026 (11 payments) then what would that salary be? Assume the first payment is on Dec 31, 2016. Today is May 1, 2016. Elmaan Ngyuen has just been drafted by the Toronto Raptors. He will be earning $3,000,000 for 2016, $4,000,000 per year from 2017 to 2020, $5,000,000 per year from 2021 to 2026, $6,000,000 per year from 2027 to 2033, $4,000,000 for 2034, $3,000,000 for 2035, and $2,000,000 for 2036. Assume all payments are made on December 31; therefore first payment will be on December 31, 2016. Assume the discount rate of 9.7618% per year compounded semiannually till the end of year 2026, and 7.7706% per year compounded quarterly from 2027 to 2036. a. Determine the present value of the above payments on May 1, 2016. b. If he were to receive an equal annual salary at the end of each of the year 2016 to 2026 (11 payments) then what would that salary be? Assume the first payment is on Dec 31, 2016.
Expert Answer:
Answer rating: 100% (QA)
answer We shall first find the discounted value of all payments on Jan 12016 1 Finding effective Annual rates EAR for discounting Discount rate till D... View the full answer
Related Book For
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura
Posted Date:
Students also viewed these finance questions
-
Exercise 2. Direct Proofs [3 points] Prove in formal detail, and with the correct notation, that an integer is odd if, and only if, it is the sum of two consecutive integers. Exercise 3. Proofs by...
-
Suppose any tax payments are made on the due date, and the annual tax bill is $12,000. Compute who owes who (seller vs buyer) and how much, if closing is (a) on December 22, and (b) September 10. (c)...
-
Calculate the following (assume all payments are made at the end of the year). a. What is the value today of a $10,000 payment made in perpetuity assuming a 8% discount rate? b. Assume the same...
-
Calculate the following ratios for both 2021 and 2020 years: current ratio, quick ratio, debt to equity ratio, debt ratio, gross profit ratio, net profit ratio, return on equity, return on total...
-
What is serial correlation, and why can it be a problem when time series data are analyzed?
-
Classify each of the following cost items as mostly fixed or variable: Raw materials ...............................Administrative salaries Direct labor ..................................Payroll...
-
The acentric factor for all materials is always (a) 0 (b) 1 (c) \( <1\) (d) \(>1\).
-
Johnston Information Services, Inc., has two service departments: human resources and billing. Johnstons operating departments, organized according to the special industry each department serves, are...
-
Barry Yellow started his painting business on September 1, 2021. He employed John Wilson, as an accounting assistant. John recently graduated from college with a postgraduate diploma in...
-
Auditor Changes at Daily Journal Corporation Charlie Munger is vice chairman of Berkshire Hathaway Inc. and is informally known as War- ren Buffett's "right arm." Munger also serves as chairman of...
-
a)1.08 coulomb b)10.8 coulomb c) 108 coulomb d)1.8 coulomb A current of 0.9A is received by a filament of an electric bulb for two minutes. What is the charge flowing through the circuit?
-
The population density of a city is given by P(x,y) = -20x - 25y +480x + 300y + 180, where x and y are miles from the southwest corner of the city limits and P is the number of people per square...
-
You are hired as an investment consultant by a hedge fund that focuses on the following five US stocks: Exxon Mobile (ticker XOM), Nike (ticker NKE), Amazon (ticker AMZN), Goldman Sachs (ticker GS),...
-
Techie Technology Company (TTC) is a publicly traded technology company that specializes in the creation and maintenance of finance and accounting software programs for a variety of specialty areas....
-
The graph below shows the velocity V (t) of a particle A moving along the x-axis and can be defined by a continuous linear piecewise-defined function over the interval 0 t 9. (0,2) 3 (2,-2) s 5 9 9.-...
-
ASSIGNMENT 1 - FILING OF CAPITAL GAINS TAX RETURN ON SALE OF UNLISTED SHARES OF STOCKS Instructions: 1. Download file of BIR Form 1707 Version 2021 at www.bir.gov.ph. 2. Input ALL the necessary...
-
Some questions to consider when writing the self-reflective essay: Have the course materials and role play activities led to personal development and an increase in your communication skills? Reflect...
-
What is the amount of total interest dollars earned on a $5,000 deposit earning 6% for 20 years?
-
Grover Theater Production Companys partially completed worksheet as of December 31, 2016, follows. Requirements 1. Analyze the worksheet to determine the adjusting entries that account for the...
-
Stewart, Inc. sells tire rims. Its sales budget for the nine months ended September 30, 2016, follows: In the past, cost of goods sold has been 40% of total sales. The director of marketing and the...
-
On June 15, 2015, Perfect Furniture discarded equipment that had a cost of $ 12,000, a residual value of $0, and was fully depreciated. Journalize the disposal of the equipment.
-
The maximum velocity attained by the mass of a simple harmonic oscillator is \(10 \mathrm{~cm} / \mathrm{s}\), and the period of oscillation is \(2 \mathrm{~s}\). If the mass is released with an...
-
A spring-mass system has a natural frequency of \(10 \mathrm{~Hz}\). When the spring constant is reduced by \(800 \mathrm{~N} / \mathrm{m}\), the frequency is altered by \(45 \%\). Find the mass and...
-
Three springs and a mass are attached to a rigid, weightless bar \(P Q\) as shown in Fig. 2.51. Find the natural frequency of vibration of the system. 0000 0000 k 12. 13 m + FIGURE 2.51 Rigid bar...
Study smarter with the SolutionInn App