Question

Question 22 of 38 Question 22 3 points Se Answer R&K inc. plans on saving $42,000, $54,000, and $58,000 at the end of each year for the next three years, respectively. How much will the firm have saved at the end of the three years if it can earn 5% on its savings? CA $165,212.57 OB $161,005.00 oc$158,098.15 co $160,295.05

Answer 1

Question 1 The Correct answer is B "161005"

To calculate the Amount at the end of 3 years.

We have to calculate the Amount of each Savings at the end of 3 years.

Savings at First year $42000.

Amount = Principal * (1 + Rate of Interest ) ^ Number of period

So, Amount = $42000 * (1 + 5/100) ^2

= $42000 * (1.05) ^2

= $42000 * 1.1025

= $46305

Savings at end of 2 years.

Amount = Principal * (1 + Rate of Interest ) ^ Number of period

So, Amount = $54000 * (1 + 5/100) ^1

= $54000 * (1.05)

= $56700

The Savings at 3rd year will remain same as it receives at the end of period

Total Amount = $46305 + $56700 + $58000

= $ 161005

Question 2 Option C "The Stockholders"

When the firm liquidates Secured creditors has the first right to claim the proceeds from the sale of assets of the company and it includess bondholders and asset lenders then the unsecured creditors are paid which includes suppliers of the company and then the common stockholders are paid. the company pays the tax to government on the profit so, they are paid first before distributing profit to shareholders.