Financial Accounting Plus MyLab Accounting with Pearson eText -- Access Card Package (12th Edition)
12th Edition
ISBN: 9780134833132
Author: C. William Thomas, Wendy M. Tietz, Walter T. Harrison Jr.
Publisher: PEARSON
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Chapter F, Problem 4QC
To determine
To identify: The present value of $50,000 winnings over 20 years, estimating the earnings at a 5% on investments.
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A new investment opportunity for you is an annuity that pays $650 at the beginning of each year for 3 years. You could earn 5.5% on your money in other investments with equal risk. What is the most you should pay for the annuity?
Select the correct answer.
a. $1,903.81
b. $1,885.91
c. $1,850.11
d. $1,832.21
e. $1,868.01
You deposit $2500 each year into an investment account that earns 8.5% interest for 20 years.Find the value of sn\i.
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11.76470588
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A lottery winner will receive
$1
million at the end of each of the next
twelve
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8.1%
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A.
$19.09
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B.
$30.54
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C.
$26.73
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Chapter F Solutions
Financial Accounting Plus MyLab Accounting with Pearson eText -- Access Card Package (12th Edition)
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- You have a chance to buy an annuity that pays $2,500 at the end of each year for 3 years. You could earn 5.5% on your money in other investments with equal risk. What is the most you should pay for the annuity? A. $5,493.71 B. $5,782.85 C. $6,087.21 D. $6,407.59 E. $6,744.83arrow_forward1. You just won the PA lottery! The lottery offers you a choice: you may choose a lump sum today, or $89 million in 26 equal annual installments at the end of each year. Assume the funds can be invested (yield) at an annual rate of 7.65%. What is the lump sum that would equal the present value of the annual installments? : $89,000,000 $38,163,612 $41,083,128 $13,092,576arrow_forwardA.You just inherited some money, and a broker offers to sell you an annuity that pays $16,800 at the end of each year for 20 years. You could earn 5% on your money in other investments with equal risk. What is the most you should pay for the annuity? a. $209,365.13 b. $180,054.02 c. $255,425.46 d. $244,957.21 e. $236,582.60 B. New Business is just being formed by 10 investors, each of whom will own 10% of the business. The firm is expected to earn $1,000,000 before taxes each year. The corporate tax rate is 34% and the personal tax rate for the firm's investors is 35%. The firm does not need to retain any earnings, so all of its after-tax income will be paid out as dividends to its investors. The investors will have to pay personal taxes on whatever they receive. How much additional spendable income will each investor have if the business is organized as a partnership rather than as a corporation? a. $20,332 b. $19,006 c. $22,763…arrow_forward
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