Homework Answers
Fair market value of product sold = $834,000
Interest rate = 10%
Present value Factor = 4.17
Each payment over the 5 years = Fair market value of product sold/Present value Factor
= 834,000/4.17
= $200,000
Total payment to be made over 5 years = 200,000 x 5
= $1,000,000
Interest income generated over 5 years = Total payment to be made over 5 years-Fair market value of product sold
= 1,000,000-834,000
= $166,000
Kindly comment if you need further assistance. Thanks‼!
Add Answer to:
NEW PROBLEM A SALE OCCURS ON JAN 1, 2018 (ANNUITY DUE) N=5 YEARS AND THE INTEREST...
Problem 9-27 Annuity due [LO9-4] Annuity payments are assumed to come at the end of each...
Problem 9-27 Annuity due [LO9-4] Annuity payments are assumed to come at the end of each payment period (termed an ordinary annuity). However, an exception occurs when the annuity payments come at the beginning of each period (termed an annuity due). What is the future value of a 8-year annuity of $3,600 per period where payments come at the beginning of each period? The interest rate is 7 percent. Use Appendix C for an approximate answer, but calculate your final...
An 8-year annuity due has a present value of $1,000. If the interest rate is 5...
An 8-year annuity due has a present value of $1,000. If the interest rate is 5 percent, what is the amount of each annuity payment?
1.Future Value: Ordinary Annuity versus Annuity Due What is the future value of a 3%, 5-year...
1.Future Value: Ordinary Annuity versus Annuity Due What is the future value of a 3%, 5-year ordinary annuity that pays $250 each year? Round your answer to the nearest cent. $ If this were an annuity due, what would its future value be? Round your answer to the nearest cent. $ 2. Present and Future Value of an Uneven Cash Flow Stream An investment will pay $100 at the end of each of the next 3 years, $400 at the...
ya so how do I do this... thanks Example: Ordinary Annuity On Jan 1, 20x1 Sparky...
ya so how do I do this...
thanks
Example: Ordinary Annuity On Jan 1, 20x1 Sparky sold some new equipment to ABC Co. on an installment contract basis. The contract required five equal annual payments of principal & interest in the amount of $10,000, and the first payment is due on December 31, 20x1. The customer's normal cost to borrow is 6% APR. From PVOA table: the factor for 6%, 5n = 4.2124 Jan'x1 Dec 'x1 Dec 'x2 Dec 'x3...
A perpetuity-due paying 5 every year has a present value of 90. An annuity-immediate paying 10...
A perpetuity-due paying 5 every year has a present value of 90. An annuity-immediate paying 10 monthly for 5 years has the same effective rate of interest what is the present value of this annuity? Hint: To calculate the monthly annuity, you should find the present value of a 60 payment annuity using the monthly effective rate of interest that is equivalent to to the annual effective rate of interest that you derived from the perpetuity. That is find i...
Investing $13,000 for each of eight years in an annuity due with a 6% interest rate,...
Investing $13,000 for each of eight years in an annuity due with a 6% interest rate, the value at the end will be: ____________________________________________ Last year Blueridge Corporation's sales were $280 million. If sales grow at 10% per year, how large (in millions) will they be 5 years later? $14000(.10)=1400 How much would $200,000 due in 50 years be worth today if the discount rate were 7.5%? =PV(7.5%,,50,,-20000) =537.78426453 =$537.78 Five years ago, Glow Go Inc. earned $7.50 per share. Its earnings...
#8 of 10 On August 31, 2018, you closed on your new condominium and obtained a...
#8 of 10
On August 31, 2018, you closed on your new condominium and obtained a $300,000, thirty-year mortgage at an APR of 4.2%. The first monthly payment was due at that time (August 31, 2018), and then monthly thereafter this is an "annuity in advance" or an "annuity due") 8. a. What was the amount of your required monthly payment? Assuming that you made all payments exactly when due, how much interest will you pay on the mortgage in...
please answer all question with details for full review ! thanks. Problem 5-34 Annuity Due (L03)...
please answer all question with details for full review !
thanks.
Problem 5-34 Annuity Due (L03) Your landscaping company can lease a truck for $8,800 a year (paid at year-end) for 5 years. It can instead buy the truck for $38.000 The truck will be valueless after 5 years. The interest rate your company can earn on its funds is 6%. a. What is the present value of the cost of leasing? (Do not round intermediate calculations. Round your answer...
Month 1: $2,000,000 sale of stock occurs with all cash received by the company. $3,000,000 bank...
Month 1: $2,000,000 sale of stock occurs with all cash received by the company. $3,000,000 bank loan received from the company’s bank at the end of the month – interest will start accruing next month (interest rate is 1% per month). Principal and interest cash payments will be made in a lump-sum payment at the end of the loan period. Factory is leased at the beginning of the month and prepaid for the entire year up-front at a cost of $720,000. The...
Problem 1 On Jan. 1 2018, Pan Corporation acquired 60% of the outstanding common stock of Smith Company for $104,600. F...
Problem 1 On Jan. 1 2018, Pan Corporation acquired 60% of the outstanding common stock of Smith Company for $104,600. Fair Value of noncontrolling interest at the outstanding is $65,400. Smith is to continue its corporate existence as a subsidiary of Pan Company. Smith's stockholders' equity Jan 1, 2018, was as follows Common Stock-$20,000 Additional Paid in Capital- $30,000 Retained Earnings- $30,000 Total Stockholders' Equity- $80,000 At the time of the acquisition, all of Smith's assets and liabilities were reported...
ya so how do I do this...
thanks
Example: Ordinary Annuity On Jan 1, 20x1 Sparky sold some new equipment to ABC Co. on an installment contract basis. The contract required five equal annual payments of principal & interest in the amount of $10,000, and the first payment is due on December 31, 20x1. The customer's normal cost to borrow is 6% APR. From PVOA table: the factor for 6%, 5n = 4.2124 Jan'x1 Dec 'x1 Dec 'x2 Dec 'x3...
#8 of 10
On August 31, 2018, you closed on your new condominium and obtained a $300,000, thirty-year mortgage at an APR of 4.2%. The first monthly payment was due at that time (August 31, 2018), and then monthly thereafter this is an "annuity in advance" or an "annuity due") 8. a. What was the amount of your required monthly payment? Assuming that you made all payments exactly when due, how much interest will you pay on the mortgage in...
please answer all question with details for full review !
thanks.
Problem 5-34 Annuity Due (L03) Your landscaping company can lease a truck for $8,800 a year (paid at year-end) for 5 years. It can instead buy the truck for $38.000 The truck will be valueless after 5 years. The interest rate your company can earn on its funds is 6%. a. What is the present value of the cost of leasing? (Do not round intermediate calculations. Round your answer...
Problem 1 On Jan. 1 2018, Pan Corporation acquired 60% of the outstanding common stock of Smith Company for $104,600. Fair Value of noncontrolling interest at the outstanding is $65,400. Smith is to continue its corporate existence as a subsidiary of Pan Company. Smith's stockholders' equity Jan 1, 2018, was as follows Common Stock-$20,000 Additional Paid in Capital- $30,000 Retained Earnings- $30,000 Total Stockholders' Equity- $80,000 At the time of the acquisition, all of Smith's assets and liabilities were reported...
Most questions answered within 3 hours.
-
What are the characteristics and behavior of an ethical
manager?
Explain, in your words, what ethics...
asked 13 minutes ago -
1. Which of the following is NOT an argument that McMahan uses
to show that jus...
asked 34 minutes ago -
A crate slides up a frictionless slope. At the end of 3 seconds
its velocity is...
asked 52 minutes ago -
Use the following information to answer the next seven
questions.
Suppose there are three potential states...
asked 48 minutes ago -
If we only have interstitial and substitutional diffusion, then
what do we consider the process of...
asked 1 hour ago -
You look at yourself in a shiny 9.6-cm-diameter Christmas tree
ball.
If your face is 21.0...
asked 1 hour ago -
If we were to measure the relaxation time of a muscle after
undergoing tetanus compared to...
asked 1 hour ago -
4CO(g) + 8H2(g) -----> 3CH4(g) +
CO2(g) + 2H2O(l)
Use the following data as needed to...
asked 1 hour ago -
without using map
1. Write a C++ program to find out the top 10 words in...
asked 1 hour ago -
1)Calculate the percent ionization of a
0.330 M solution of hypochlorous
acid.
% Ionization = %...
asked 1 hour ago -
1a) How many grams of K2SO4 are in 250mL
of 0.11 M K2SO4 solution?
_____ g...
asked 1 hour ago -
The vapor pressure of a solution containing 38.7 g glycerin
(C3H8O3) in 146.2 g ethanol (C2H5OH)...
asked 1 hour ago