Question

In: Finance

Congratulations! You are the inventor of a new technological marvel and you have received several offers...

Congratulations! You are the inventor of a new technological marvel and you have received several offers from various tech companies for the rights to market your new invention. To decide which offer to accept, you must determine the PV of each offer and choose the one that is the highest.
Calculate the PV of each offer listed below using an 8% discount rate. Use the Appendices and then verify your answers using the time value functions on your calculator.
7. __________________ $150,000 per year for 5 years + $200,000 per year for the next 5 years.
The best option is _________________.

Solutions

Expert Solution

Discount rate = 8%

PV of $150,000 per year for 5 years

PV of $200,000 per year for the next 5 years.

The best option is $150,000 per year for 5 years as it has the highest PV

jeff jeffy answered 2 years ago
Next > < Previous

Related Solutions

Congratulations! You are the inventor of a new technological marvel and you have received several offers...
Congratulations! You are the inventor of a new technological marvel and you have received several offers from various tech companies for the rights to market your new invention. To decide which offer to accept, you must determine the PV of each offer and choose the one that is the highest. Calculate the PV of each offer listed below using an 8% discount rate. Use the Appendices and then verify your answers using the time value functions on your calculator. 1....
Congratulations! You have been appointed as a new product manager with Samsung and have been tasked...
Congratulations! You have been appointed as a new product manager with Samsung and have been tasked to introduce the latest smartphone in a new country. Choose and research a country other than the United States and India, and then formulate a plan to effectively integrate this product from a global and social standpoint. Speculate on the major challenges and opportunities you anticipate facing in this role. Provide a reference source.
Congratulations! You have just won $1,000,000 in the New York Lottery. You will receive payments of...
Congratulations! You have just won $1,000,000 in the New York Lottery. You will receive payments of $40,000 per year (at the end of each year) for the next 25 years. If the discount rate is 14 percent, what are your winnings worth today?
Several technological trends are occurring in the new economy. Which of the following is not one...
Several technological trends are occurring in the new economy. Which of the following is not one of these trends? a. The internet, World Wide Web, computers and information technology have transformed and continue to transform the modern workplace b. Computer competency must be mastered and continuously developed as a foundation for career success c. The rate of technological change will continue to accelerate d. Low-skill worker who are displaced from declining industries will not need to re-tool their skills to...
Schmidt Business Forms Background Congratulations! As a new salesperson for Schmidt Business Forms, you have just...
Schmidt Business Forms Background Congratulations! As a new salesperson for Schmidt Business Forms, you have just completed training and have been assigned the southwest territory. Schmidt Business Forms designs and manufactures a full line of stock and customized forms for use in all types of business. Operating throughout the United States and Canada, Schmidt is recognized as one of the three leaders in the industry. Current Situation Doctors’ General Hospital was once a major account in your territory. Over this...
You have just received job offers from both of these banks. Assuming that the starting salaries,...
You have just received job offers from both of these banks. Assuming that the starting salaries, employee benefits, and job responsibilities are the same for each bank, explain the reasons why you would accept the offer of one bank and not the other. the banks are RBC AND TD BANK 200 - 300 words
Congratulations! After passing your course in Business Statistics, you received a job as a statistical analyst...
Congratulations! After passing your course in Business Statistics, you received a job as a statistical analyst at a major business corporation. Your first task is to decide which statistical test would be the most appropriate to use to analyze the following   problems.    Luckily, you remember learning about the following statistical tests in your favorite (and only) business statistics course. A.   z-test for one sample mean                                           H.    t- test for paired data B. z -test for one sample proportion                                   I.   ...
CONGRATULATIONS!!!  You just agreed to a deal that will make you the proud new owner of a...
CONGRATULATIONS!!!  You just agreed to a deal that will make you the proud new owner of a beautiful new convertible.  The car comes with a three-year warranty. Please consider the purchase of the extended warranty which has a purchase price of $1,800, today (the day you purchased your NEW car).  The extended warranty covers the 4 years immediately after the three-year warranty expires.  You estimate that the yearly expenses that would have been covered by the extended warranty are $400 at the end of...
You have been hired as a financial advisor to Raheel Abbas. He has received two offers...
You have been hired as a financial advisor to Raheel Abbas. He has received two offers for playing professional basketball and wants to select the best offer, based on considerations of money only. Offer A is a Rs.10m (offer for Rs.2m a year for 5 years). Offer B is a Rs.11m (offer of Rs.1m a year for four years and Rs.7m in year 5). Required: Calculate the present value of each contract by assuming a range of interest rate (8%...
You have just started a new job that offers a retirement savings account. You have two...
You have just started a new job that offers a retirement savings account. You have two options: You can invest 5% of your monthly wages at 2% OR You can invest 4% of your monthly wages at 4%. Both are compounded monthly. b. Assume that you will always make $45,000 annually, how much will you have saved with the better plan after 15 years? c.Assume that you will always make $45,000 annually, how much will you have saved with the...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT