Two payments of $3000 each are due in 50 and 100 days. What is their combined economic
Question:
a. 9%?
b. 11%?
c. Explain why the answer in Part (b) is smaller.
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 60% (15 reviews)
a Equivalent value today b Equivalent value today ...View the full answer
Answered By
PALASH JHANWAR
I am a Chartered Accountant with AIR 45 in CA - IPCC. I am a Merit Holder ( B.Com ). The following is my educational details.
PLEASE ACCESS MY RESUME FROM THE FOLLOWING LINK: https://drive.google.com/file/d/1hYR1uch-ff6MRC_cDB07K6VqY9kQ3SFL/view?usp=sharing
3.80+
3+ Reviews
10+ Question Solved
Related Book For
Question Posted:
Students also viewed these Accounting questions
-
Two payments of $3000 each are due today and five years from today. The creditor has agreed to accept three equal payments due one, three, and five years from now. Assuming that money can earn 7.5%...
-
Two payments of $5000 are scheduled six months and three years from now. They are to be replaced by a payment of $3000 in two years, a second payment in 42 months, and a third payment, twice as large...
-
Waldon Toys owes $3000 due in 2 years with interest at 11% compounded semi-annually and $2500 due in 15 months at 9% compounded, quarterly. If the company wants to discharge these debts by making two...
-
Quick Fix-it Corporation was organized in January 2011 to operate several car repair businesses in a large metropolitan area. The charter issued by the state authorized the following capital stock:...
-
Refer to the financial statements of Best Buy in Appendix A near the end of the book. To what level of significance are dollar amounts rounded? What time period does its income statement cover?
-
KellyMarie Griffin works for the City of Portland, Oregon, as a clerical employee in the Parks and Recreation Department. She complains of conflict with her coworkers. In particular, Therea Lareau,...
-
Costopoulos Company Ltd is considering the purchase of equipment that will produce net after-tax cash savings over the useful life of the equipment of 5 years as follows. Required (a) What is the...
-
The following assets are owned by the Dinnell Company: In the year of acquisition and retirement of an asset, the company records depreciation for one-half year. During 2008, asset A was sold for...
-
An x-ray machine uses a high frequency circuit. For one operating condition, the input voltage and current for the high voltage transformer are V p = 271 V and I p = 60 A, which produces an x- ray...
-
Moobys is considering building a new theme park. After estimating the future cash flows, but before the project could be evaluated, the economy picked up and with that surge in the economy interest...
-
Two payments of $2000 each are to be received six and twelve months from now. If money is worth 10%, what is the total equivalent value of the payments: a. Today? b. Six months from today? c. Explain...
-
Payments of $850 and $1140 were scheduled to be paid today and nine months from now, respectively. What total payment today would place the payee in the same financial position as the scheduled...
-
An empirical equation for the velocity distribution in a horizontal, rectangular, open channel is given by u = u max (y/d) n , where u is the velocity at a distance y meters above the floor of the...
-
RPM Pizza, Inc., issued a check for $96,000 to Systems Marketing for an advertising campaign. A few days later, RPM decided not to go through with the deal and placed a written stop-payment order on...
-
Assume that any money lent by a bank is always deposited back in the banking system as a checkable deposit and that the reserve ratio is 10%. Trace out the effects of a $100 million open-market...
-
As a pharmacist, you inform a patient that the patients copay will be $15 less if the pharmacist substitutes the generic drug for the brand prescribed. The patient is concerned about quality and asks...
-
Under the revised Article 4, a bank is no longer required to include the customers canceled checks when it sends monthly statements to the customer. A bank may simply itemize the checks (by number,...
-
A pharmacist who is a member of a managed care formulary evaluation committee is evaluating whether to include on the formulary a newly marketed drug. The drug is much more expensive than other drugs...
-
If G is an infinite p-group (p prime), then either G has a subgroup of order p n for each n 1 or there exists m N* such that every finite subgroup of G has order p m .
-
Which, if any, of the dichloroethene molecules drawn in Data Table II (3.) (4.) and (5.) are geometric isomers? A. B. C. D. cis-1,2-dichloroethene and trans-1,2-dichloroethene...
-
The maturity value of an investment after 42 months is $8689.32. What was the original investment if it earned 4.25% compounded semiannually?
-
CompuSystems was supposed to pay a manufacturer $19,000 on a date four months ago and another $14,000 on a date two months from now. Instead, CompuSystems is proposing to pay $10,000 today and the...
-
To what amount will $10,000 grow after 25 years if it earns a. 6% compounded annually? b. 6% compounded semiannually? c. 6% compounded quarterly? d. 6% compounded monthly?
-
An airline will purchase 2 million gallons of jet fuel in one month and hedges using heating oil futures. From historical data, the standard deviation of heating oil futures contract is sF =0.031...
-
A European call option for a share costs $5.00. The exercise price of the call option is $100.00. An investor buys one call and holds it until maturity: a. Under what circumstances will the holder of...
-
You have been asked to estimate the cost of capital for the UTX corporation. The company has 7 million shares and 150,000 bonds outstanding at par value $10,000. In addition, it has $300 million in...
Study smarter with the SolutionInn App