Question
In: Finance
Present value of an annuity Consider the following case. (Click on the icon located on the...
Present value of an annuity Consider the following case. (Click on the icon located on the top-right corner of the data table below in order to copy its contents into a spreadsheet.)
|
Amount of annuity |
Interest rate |
Period (years) |
|
|
$58,000 |
5% |
6 |
a. Calculate the present value of the annuity assuming that it is
1) An ordinary annuity.
(2) An annuity due.
b. Compare your findings in parts a(1) and a(2).
All else being identical, which type of annuitylong dash—ordinary or annuity duelong dash—is preferable? Explain why.
The present value of the ordinary annuity is $_____
Solutions
Expert Solution
Ordinary annuity:
Ordinary annuity $294,390.14.
------------------------------------------------------------------------
Annuity due:
Annuity due is $309,109.65.
--------------------------------------------------------
Annuity due is preferable.
------------------------------------------
In case of Annuity due payments begin from the beginning of the period but in case of ordinary annuity payment begins at the end of the year.
jeff jeffy answered 2 months agoRelated Solutions
Present value of an annuity Consider the following case. Amount of annuity Interest rate Period (years)...
Present value of an annuity
Consider the following case.
Amount of annuity
Interest rate
Period (years)
$44,000
12%
13
a. Calculate the present value of the annuity assuming that it
is
(1) An ordinary annuity.
(2) An annuity due.
b. Compare your findings in parts a(1) and a(2). All else
being identical, which type of annuity—ordinary or annuity due—is
preferable? Explain why.
The present value of the ordinary annuity is____. (Round to the
nearest cent.)
Determine the t-value in each of the cases. Click the icon to view the table of...
Determine the t-value in each of the cases.
Click the icon to view the table of areas under the
t-distribution.
(a) Find the t-value such that the area in the right tail is
0.10 with 10 degrees of freedom.
Determine the t-value in each of the cases. Click the icon to view the table of...
Determine the t-value in each of the cases.
Click the icon to view the table of areas under the
t-distribution.
(a) Find the t-value such that the area in the right tail is
0.10 with 5 degrees of freedom. __ (Round to three decimal places
as needed.)
(b) Find the t-value such that the area in the right tail is
0.025 with 29 degrees of freedom.__ (Round to three decimal places
as needed.)
(c) Find the t-value such that the...
Determine the t-value in each of the cases. LOADING... Click the icon to view the table...
Determine the t-value in each of the cases. LOADING... Click
the icon to view the table of areas under the t-distribution.
(a) Find the t-value such that the area in the right tail is
0.25 with 6 degrees of freedom. nothing (Round to three decimal
places as needed.)
(b) Find the t-value such that the area in the right tail is
0.025 with 19 degrees of freedom. nothing (Round to three decimal
places as needed.)
(c) Find the t-value such...
Present Value of an Annuity What is the present value of a $400 annuity payment over...
Present Value of an Annuity What is the present
value of a $400 annuity payment over 6 years if interest rates are
9 percent?
$670.84
$2,013.18
$238.51
$1,794.37
Click on the following icon in order to copy its contents into a spreadsheet.) Balance...
Click on the following icon
in order to copy its contents into a spreadsheet.)
Balance Sheet Accounts of Roman Corporation
Account
Balance
12/31/2016
Balance
12/31/2017
Accumulated depreciation
$2,030
$2,668
Accounts payable
$1,797
$2,070
Accounts receivable
$2,479
$2,690
Cash
$1,307
$1,095
Common stock
$4,990
$4,990
Inventory
$5,807
$6,038
Long-term debt
$7,799
$8,192
Plant, property, and equipment
$8,407
$9,195
Retained earnings
$1,384
$1,098
Balance sheet. From the following balance sheet accounts in the
popup window,
,a. construct a balance sheet...
Click on the following icon in order to copy its contents into a spreadsheet.) Balance...
Click on the following icon
in order to copy its contents into a spreadsheet.)
Balance Sheet Accounts of Athens Corporation
Account
Balance
12/31/2016
Balance
12/31/2017
Accumulated depreciation
$4,232
$4,863
Accounts payable
$2,894
$3,205
Accounts receivable
$3,167
$3,640
Cash
$1,214
$1,490
Common stock
$4,781
$7,280
Inventory
$4,348
$5,166
Long-term debt
$3,598
$2,437
Plant, property, and equipment
$8,682
$9,850
Retained earnings
$1,906
$2,361
Balance sheet. From the following balance sheet accounts in the
popup window,
,a. construct a balance sheet for...
PRESENT VALUE OF AN ANNUITY - (a) What is the present value of an asset that...
PRESENT VALUE OF AN ANNUITY -
(a) What is the present value of an asset that pays $10,000 per
year at the end of the next four years if the appropriate discount
rate is 5 percent? What total return would you earn if you bought
this asset and it paid its expected cash flows on time each year
for the next four years? Prove that you earned the same return that
you would have, had you put your money in...
Harmony Corporation reported these figures: (Click the icon to view the balance sheet.) LOADING... (Click the...
Harmony Corporation reported these figures:
(Click the icon to view the balance
sheet.)
LOADING...
(Click the icon to view the income statement.)
Harmony Corporation has 2,000,000 shares of common stock
outstanding. Its stock has traded recently at $ 33.30 per share.
You would like to gain a better understanding of Harmony
Corporation's financial position. Assume all sales are on
credit.Read the requirement
LOADING...
.
a. Inventory turnover
Enter the formula on the first line, then calculate the
inventory turnover on...
The budgets of four companies yield the following information: LOADING... (Click the icon to view the...
The budgets of four companies yield the following
information:
LOADING...
(Click the icon to view the budget information for the four
companies.)Read the requirements
LOADING...
.
Requirement 1. Fill in the blanks for each missing value.
(Round the contribution margin per unit to the nearest cent. Use a
minus sign or parentheses to enter an operating loss.)
Up
Net Sales Revenue
$992,000
Variable Costs
Fixed Costs
Operating Income (Loss)
$42,500
Units Sold
155,000
Contribution Margin per Unit
$3.20
Contribution Margin...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- More and more adults are considering commuting to work by bicycle rather than car, but few...
- Please answer these questions Data Processing and Analysis using python. Thank you In statistics, an outlier...
- Write a function file that accepts each of the four vectors as inputs. The function file...
- Kant says that to act morally is to act out of duty. How does this differ...
- Suppose you are trying to determine the capacity (in gallons) of the gas tank needed on...
- List the arithmetic operators used in BASIC and state their priorities of execution in a statement....
- Describe the espoused values of a company you have worked for (or been exposed to -...
ADVERTISEMENT