Business, 22.02.2020 01:48 karolmolina49
A series of cash flows may not always necessarily be an annuity. Cash flows can also be uneven and variable in amount, but the concept of the time value of money will continue to apply.
Consider the following case:
The Purple Lion Beverage Company expects the following cash flows from its manufacturing plant in Palau over the next five years:
Annual Cash Flows
Year 1
Year 2
Year 3
Year 4
Year 5
a$250,000 $37,500 $180,000 $300,000 $550,000
The CFO of the company believes that an appropriate annual interest rate on this investment is 6.5%. What is the present value of this uneven cash flow stream, rounded to the nearest whole dollar? (Note: Do not round your intermediate calculations.)
a.$1,692,500
b.$467,500
c.$1,475,000
d.$1,051,448
Identify whether the situations described in the following table are examples of uneven cash flows or annuity payments:
Description
Uneven Cash Flows
Annuity Payments
You recently moved to a new apartment and signed a contract to pay monthly rent to your landlord for a year.
SOE Corp. hires an average of 10 people every year and matches the contribution of each employee toward his or her retirement fund.
Franklinia Venture Capital (FVC) invested in a budding entrepreneur’s restaurant. The restaurant owner promises to pay FVC 10% of the profit each month for the next 10 years.
You have committed to deposit $600 in a fixed interest–bearing account every quarter for four years.
Answers: 2
Business, 22.06.2019 07:10
9. tax types: taxes are classified based on whether they are applied directly to income, called direct taxes, or to some other measurable performance characteristic of the firm, called indirect taxes. identify each of the following as a “direct tax,” an “indirect tax,” or something else: a. corporate income tax paid by a japanese subsidiary on its operating income b. royalties paid to saudi arabia for oil extracted and shipped to world markets c. interest received by a u.s. parent on bank deposits held in london d. interest received by a u.s. parent on a loan to a subsidiary in mexico e. principal repayment received by u.s. parent from belgium on a loan to a wholly owned subsidiary in belgium f. excise tax paid on cigarettes manufactured and sold within the united states g. property taxes paid on the corporate headquarters building in seattle h. a direct contribution to the international committee of the red cross for refugee relief i. deferred income tax, shown as a deduction on the u.s. parent’s consolidated income tax j. withholding taxes withheld by germany on dividends paid to a united kingdom parent corporation
Answers: 2
Business, 22.06.2019 23:00
The sign at the bank reads, "wait here for the first available teller," suggests the use of a waiting line system.a. multiple server, single phaseb. random server, single phasec. single server, multiphased. multiple server, multiphasee. dynamic server, single phase
Answers: 2
Business, 23.06.2019 02:00
Here are the expected cash flows for three projects: cash flows (dollars) project year: 0 1 2 3 4 a − 6,100 + 1,275 + 1,275 + 3,550 0 b − 2,100 0 + 2,100 + 2,550 + 3,550 c − 6,100 + 1,275 + 1,275 + 3,550 + 5,550 a. what is the payback period on each of the projects? b. if you use a cutoff period of 2 years, which projects would you accept?
Answers: 2
Business, 23.06.2019 02:10
Ben is the owner of a small organization with a few employees. he plans to have a data warehouse for the limited number of users in his organization. which data warehouse is most suited for ben's organization? o a. lan-based o b. stationary o c. distributed od. virtual
Answers: 2
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