ABC tool and die company wants to invest $5 million in new equipment. no added working capital wil be required. the additional revenue expected from this new equipment will be $2.5 million per year for 5 years and the added expenses will be $700,000 a year also for 5 years. the company has a 25% tax rate, the equipment will be depreciated on a straight line basis over 5 years and it will have no salvage value. the cost of capital for ABC is 12%
1. additional net income generated from the new equipment
$800,000 ; $1,350,000 ; 600,000 ; none ; $1.6 million
2. annual cash flow from the new equipment
1.35 million, 1.6 million, 1.0 million, 2.5 million, 1.5 million
3. present value of cash flows less the cost of equipment (NPV of the new product)
positive $767,642 ; negative 5 millioin , negative $2,116,179 ; positive $4,011,941
4. should ABC tool and die company go forward with the purchase of the new equipment
yes, no

Answers

Answer 1

ABC tool and die company is planning to invest $5 million when the  additional revenue expected is $2.5 million per year for 5 years with added expenses of $700,000 a year. Based on this, A.  $1,350,000, B.  $2,350,000, C. $767,642.4, D. Yes.

Explanation:

1. Calculation of additional net income generated from the new equipment

Revenue from the new equipment = $2.5 million

Additional expenses from the new equipment = $700,000

Depreciation expense = ($5,000,000 - $0) / 5 years = $1,000,000 per year

Tax rate = 25%

Additional net income = Revenue - Expenses - Depreciation expense x (1 - tax rate)= $2,500,000 - $700,000 - $1,000,000 x (1 - 0.25)=$1,350,000

Therefore, the additional net income generated from the new equipment is $1,350,000.

2. Calculation of annual cash flow from the new equipment

Annual cash flow = Additional net income + Depreciation expense= $1,350,000 + $1,000,000= $2,350,000

Therefore, the annual cash flow from the new equipment is $2,350,000.

3. Calculation of present value of cash flows less the cost of equipment (NPV of the new product)

Cost of the new equipment = $5,000,000

Present value of cash flows = (Annual cash flow x Present value annuity factor) - Cost of the equipment

Present value annuity factor =[tex]\frac{1 - (1 + r)^{n} }{r}[/tex]

Where r = cost of capital = 12%

n = number of years = 5 years

Present value annuity factor = [tex]\frac{1 - (1 + 0.12)^{5} }{0.12}[/tex]= 3.60478

Present value of cash flows = ($2,350,000 x 3.60478) - $5,000,000= $767,642

Therefore, the present value of cash flows less the cost of equipment (NPV of the new product) is positive $767,642.4.

4. Should ABC tool and die company go forward with the purchase of the new equipment?

As the NPV of the new product is positive, it is recommended that ABC tool and die company should go forward with the purchase of the new equipment.

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a farmer produces lemons and sells them to fresh juice, which makes lemon juice. the lemons produced by the farmer are called

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The lemons produced by the farmer are called raw materials.

A farmer produces lemons and sells them for fresh juice, which makes lemon juice. In this case, the farmer's lemons are the raw materials for the production of lemon juice.

Raw materials are substances or components that are required for the manufacturing or production of finished products that are sold to customers.

They are used to make goods and are either extracted from nature or made using synthetic processes.

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Master Co. hired Snow, CPA to assess and provide a report on the efficiency of Master's internal control over financial reporting. Snow will audit Master's internal control over financial reporting.

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veronica deposited $1,000 into an account two years ago. the first year she earned 7 percent interest; the second year she earned 5 percent. how much money does veronica have in her account today?

Answers

Veronica currently has $1,123.50 in her account when veronica deposited $1,000 into an account two years ago. the first year she earned 7 percent interest; the second year she earned 5 percent.

How much money does veronica have in her account today?

We must add the interest earned by year to the initial investment in order to determine how much money Veronica currently has in her account.

Veronica's initial $1,000 deposit earns 7% interest after the first year, or $70:

$1,000 x 0.07 = $70

So, Veronica's account balance at the conclusion of the first year is $1,000 + $70 = $1,070.

Her $1,070 account balance after the second year earns 5% interest, or $53.50:

$1,070 x 0.05 = $53.50

Veronica's account balance at the conclusion of the second year is therefore $1,070 + $53.50 = $1,123.50.

Thus, Veronica currently has $1,123.50 in her account.

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summarize the performance coatings business. what is its potential long-term value to dupont? why might an outside party (or outside investors, in the case ofspinoff or carve-out) perceive more value than dupont does?

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The performance coatings business of DuPont has the potential to be of long-term value to DuPont due to its ability to help the company remain competitive in the global market. An outside party may perceive more value in the performance coatings business than DuPont does because they can use it to increase their market share and capitalize on new opportunities.

The performance coatings business of DuPont is a specialized line of products that are designed for use in highly demanding applications, such as aerospace and automotive. An outside party may also see the potential to increase profits by investing in new technologies and developing new products.

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kamiya plans to open a business writing software. while researching her strategy, kamiya discovered a profitable niche in children's educational software. how will pursuing this niche help kamiya outperform her competitors?

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Focusing on a profitable niche like children's educational software can help Kamiya differentiate herself from her competitors, develop a loyal customer base, and ultimately grow her business more effectively.

Reduced competition: By targeting a niche market, Kamiya can reduce the number of competitors she faces. This can make it easier for her to stand out and attract customers.Customer loyalty: If Kamiya creates high-quality educational software for children, she can develop a loyal customer base. Parents are often willing to invest in their children's education, and if they find a product that works well for them, they are likely to stick with it.Higher profit margins: By focusing on a niche market, Kamiya can charge higher prices for her software. Parents are often willing to pay a premium for educational products that they believe will help their children succeed.Opportunities for innovation: A niche market can provide Kamiya with opportunities to innovate and develop new products. By understanding the specific needs of her target market, she can create products that meet those needs in unique and effective ways.

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Beginning three months from now, you want to be able to withdraw $2,200 each quarter from your bank account to cover college expenses over the next five years. If the account pays .44 percent interest per quarter, how much do you need to have in your bank account today to meet your expense needs over the next five years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

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In order to meet your college expense needs of $2,200 each quarter for the next five years, you will need to have $103,944.44 in your bank account today. This amount is determined by using the formula for calculating the future value of an ordinary annuity.

The future value of an ordinary annuity is equal to the regular payments multiplied by the sum of the present value of an annuity factor and the inflated annuity factor. The present value of an annuity factor is equal to (1 - (1 + interest rate) ^-number of periods) divided by the interest rate. The inflated annuity factor is equal to (1 + interest rate)^number of periods - 1.

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The decrease in demand could cause the efficiency of the price ceiling to decrease, resulting in less than optimal market outcomes.

The efficiency of the price ceiling on housing in the city would increase due to the decrease in demand. With a price ceiling in place, the price of housing cannot rise above a certain level, even when demand is high. This can result in a shortage of housing, as the quantity supplied is less than the quantity demanded.

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People who suffer chronic depression are at high risk for experiencing
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Answer:
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New York City could lose  tourism revenue, public recreation space, and the environmental benefits provided, no longer be accessible to the public as a park and would only benefit the wealthy individuals, Additionally, the loss of Central Park would negatively impact the city's reputation and potentially harm other industries that rely on the park's presence, such as the entertainment and hospitality sectors.


Central Park is a significant natural area in the heart of Manhattan, one of the world's busiest cities. It provides a plethora of environmental benefits such as air purification, carbon storage, and flood reduction, as well as recreational opportunities for the residents of New York City and the millions of visitors who flock to the park every year.

Central Park has also played a significant role in promoting tourism in New York City, with the park being a popular destination for people from all over the world. If Central Park were to be sold to developers and transformed into private real estate, the city's environmental health would be compromised, and the loss of a vital green space would have negative consequences for the public's mental and physical well-being.

Furthermore, losing Central Park would harm the city's reputation, which is one of the world's leading tourist destinations, and it would have a severe impact on industries such as hospitality and entertainment.

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there are six steps to follow in conducting global market research. the first step is to:o a. develop the research design.b. define the research problem.000 c. determine information needs.d. collect the data (secondary and primary).e. analyze the data and interpret the results.

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There are six steps to follow in conducting global market research. The first step is to define the research problem. The remaining steps are as follows:

Develop the research design. Determine information needs. Collect the data (secondary and primary).Analyze the data and interpret the results. The first step in conducting global market research is to define the research problem.

The remaining steps involve developing a research design, determining information needs, collecting data (secondary and primary), analyzing the data, and interpreting the results. The definition of the research problem should be broad and clear. This includes the definition of the purpose of the research and the overall goals of the project.

The research design should include all of the information needed to answer the research problem. This may include the specific research questions, the methods used to collect data, and the types of analysis used. The information needs of the research should be determined prior to conducting the research.

This includes identifying the types of data that will be collected, the sources of the data, and the methods used to collect the data. Data can be collected from secondary and primary sources. Secondary data is information that is already available, while primary data is collected specifically for the research project.

The data collected should be analyzed and interpreted. This includes analyzing the data to identify patterns, trends, and correlations. The results of the analysis should be interpreted to draw conclusions and make recommendations.

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the mission of the grand union supermarket chain is probably to provide food, beverages, and related merchandise (all of high quality) to the general public. true false

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The mission of the Grand Union Supermarket chain is probably to provide food, beverages, and related merchandise (all of high quality) to the general public. This statement is TRUE.

Grand Union Supermarkets was a chain of supermarkets that operated in the Northeastern United States. Grand Union was an American chain of grocery stores that went bankrupt in the late 20th century. The chain's trademark and slogan, "The Independent Grocers Alliance," are now owned by C&S Wholesale Grocers, which uses the name for a business-to-business operation that supplies retail stores.

A union supermarket is a cooperative grocery store that is operated and controlled by the people who work in it. The workers own the store and share in the profits. They are also responsible for running the store and making decisions about what to stock, how to price things, and other important aspects of the business.

The Grand Union Supermarket chain's mission was likely to provide food, beverages, and related products of high quality to the general public. High-quality items may have included fresh produce, bakery goods, and meats, as well as a selection of frozen and pre-packaged meals. In general, the mission of any supermarket chain is to provide a wide variety of products to customers at reasonable prices while also ensuring that those products are of high quality. Furthermore, supermarket chains are committed to offering excellent customer service to their customers, which includes keeping their stores clean and well-stocked while also providing a pleasant shopping experience.

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Assume that on September 1, Office Depot had an inventory that included a variety of calculators. The company uses a perpetual inventory system. During September, these transactions occurred.
Sept. 6 Purchased calculators from Dragoo Co. at a total cost of $1,740, terms n/30.
9 Paid freight of $40 on calculators purchased from Dragoo Co.
10 Returned calculators to Dragoo Co. for $56 credit because they did not meet specifications.
12 Sold calculators costing $450 for $650 to Fryer Book Store, terms n/30.
14 Granted credit of $45 to Fryer Book Store for the return of one calculator that was not ordered. The calculator cost $34.
20 Sold calculators costing $560 for $730 to Heasley Card Shop, terms n/30.

Answers

On September 1, Office Depot had an inventory that included a variety of calculators. The company uses a perpetual inventory system. During September, these transactions occurred is initial inventory plus $748.

A perpetual inventory system is a way of keeping track of inventory levels constantly. Businesses that use the perpetual inventory system record all sales and purchases of inventory in real-time. Companies that use this system typically have a point-of-sale system that records inventory levels at the time of purchase or sale.In a perpetual inventory system, inventory records are updated in real-time as transactions occur. This ensures that businesses have a constant understanding of their inventory levels.
In September, Office Depot had the following transactions under a perpetual inventory system:
1. On September 6, Office Depot purchased calculators from Dragoo Co. at a total cost of $1,740. The inventory increased by $1,740.
2. On September 9, Office Depot paid $40 for freight on calculators purchased from Dragoo Co. The inventory increased by $40.
3. On September 10, Office Depot returned calculators to Dragoo Co. for $56 credit as they did not meet specifications. The inventory decreased by $56.
4. On September 12, Office Depot sold calculators costing $450 for $650 to Fryer Book Store. The inventory decreased by $450.
5. On September 14, Office Depot granted a credit of $45 to Fryer Book Store for the return of one calculator that was not ordered. The calculator cost $34. The inventory increased by $34.
6. On September 20, Office Depot sold calculators costing $560 for $730 to Heasley Card Shop. The inventory decreased by $560.In summary, the net change in inventory during September is:
Initial inventory + ($1,740 + $40 - $56 - $450 + $34 - $560) = Initial inventory + $748.

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increased size of financial institutions resulting from financial consolidation increases the problem, because there are now more large institutions whose failure would expose the financial system to systemic risk. a. transactions costs b. economies of scale c. too-big-to-fail d. asset transformation

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A country's financial system comprises banks and nonbank lenders, insurers, securities exchanges, and investment funds. It also covers clearing counterparties, payment providers, central banks, and financial regulators and supervisors.

What is financial system?

A financial system is a collection of institutions and procedures that are used to facilitate the exchange of funds on a global, regional, or firm-specific level. Market-based principles, centralised planning, or a combination of the two can be used to organise financial systems.

A financial system serves as a middleman between investors and savers. It makes it easier for money to move from regions of surplus to areas of deficit. It is worried about finances, credit, and money. These three parts are very closely interrelated with each other and depend on each other.

The Federal Reserve System (FRS) is the central bank of the United States. Commonly simply dubbed the Fed, it is perhaps the most powerful financial organisation in the world.

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Janice, it is recommended by the undersigned that you install a particular mechanism utilizing a matrix-based structural approach to measure previously identified performance outcomes. Determine which sentence has achieved a casual, yet professional tone.

Answers

The selection "We will be implementing new performance measures" uses a conversational but professional tone. Thus, B is correct.

This sentence strikes a balance between being informative and clear while also avoiding overly formal or informal language. The use of "we" suggests a collaborative approach to decision-making, while the use of "implementing" and "performance measures" demonstrates a professional level of expertise and knowledge. The sentence also avoids slang or overly casual language, which might detract from its professionalism.

Overall, this selection is effective in conveying important information in a manner that is both approachable and authoritative, making it a good example of conversational but professional tone.

This question should be provided as:

Which one of the following selections uses a conversational but professional tone?

A. be so ticked off that she scored that account.B. We will be implementing new performance measures.C. Janice, it is recommended by the undersigned that you install a particular mechanism utilizing a matrix-based structural approach to measure previously identified performance outcomes.

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Use the following check register for the month of april and the monthly account summary to a swer the following question:

Answers

The correct option is B, the month of April and the monthly account summary the reconciled balance in the checking account is $1027.

If we go by Bank account balance then reconciled balance should be $1105 less $78 outstanding check that comes to $1027.

If we go by Checking account balance then reconciled balance should be $1032 less $5 service charges that also comes to $1027

A reconciled balance refers to the final balance of an account after all transactions have been reviewed, compared, and adjusted between two parties, typically a company and a financial institution. This process is known as bank reconciliation, where a business verifies that the transactions recorded in their accounting system match the transactions processed by the bank.

The reconciled balance takes into account any outstanding transactions that have not yet been cleared, such as checks that have been written but not yet cashed, or deposits that have been made but not yet credited. The goal of bank reconciliation is to ensure that the account balance in the company's books is accurate and up-to-date, which helps to prevent overdrafts, minimize errors, and identify any fraudulent activity.

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Complete Question:-

Use the following check register for the month of April and the monthly account summary to answer the following question:

What is the reconciled balance in the checking account?

a. $1032

b. $1027

c. $750

d. $1105

after a complaint was filed against him, broker ike was found guilty of a license law violation. he was fined and had to pay legal fees totaling $8,900. this was paid by the recovery fund. what else is likely to happen to broker ike?

Answers

After being found guilty of a license law violation and having legal fees paid by the recovery fund, Broker Ike may face additional consequences, depending on the severity of the violation and the regulations in his jurisdiction.

What are some possible outcomes for the license law violation?License suspension or revocation: Depending on the severity of the violation, Broker Ike's real estate license may be suspended or revoked. This would prevent him from practicing real estate for a certain period of time or permanently.Probation: Instead of a license suspension or revocation, Broker Ike may be placed on probation for a certain period of time. During this time, he may be required to meet certain conditions or restrictions, such as taking additional courses or not engaging in certain business practices.Fine or additional penalties: In addition to the fine paid by the recovery fund, Broker Ike may be required to pay additional fines or penalties for the license law violation.Loss of reputation and business: Even if Broker Ike's license is not suspended or revoked, the license law violation and legal proceedings may damage his reputation and cause clients to seek services elsewhere etc.

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apple, a company with a strong product line, has strong bargaining power of multiple choice traders. suppliers. buyers. substitutes.

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Apple, one of the largest and most recognizable technology companies in the world, has strong bargaining power when it comes to its multiple choice traders, suppliers, buyers, and substitutes.

Traders are suppliers that Apple deals with directly, and because Apple is a major customer for them, they have to offer competitive prices and terms. Suppliers have to compete to provide Apple with the best quality products and services, since Apple is one of their main customers. Buyers have to accept Apple's pricing and terms, as Apple is one of the largest technology companies in the world. Lastly, substitutes have to offer Apple's products and services at competitive prices, as they are trying to take away market share from Apple. Apple's strong bargaining power comes from its large customer base and reputation, which gives it an advantage over traders, suppliers, buyers, and substitutes.

In conclusion, Apple has strong bargaining power over its multiple choice traders, suppliers, buyers, and substitutes due to its large customer base, reputation, and overall market presence.

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fatuma invests a total of $28,000 in two accounts paying 12% and 9% annual interest, respectively. how much was invested in each account if, after one year, the total interest was $3,015.00.

Answers

Fatuma invested $16,500 in the 12% account and $11,500 in the 9% account.

Fatuma invests a total of $28,000 in two accounts that pay 12% and 9% annual interest, respectively. The total interest she earned after one year was $3,015.

Determine how much she invested in each account.Let us first assign variables for the two accounts. Let x be the amount of money invested in the 12% account, and y be the amount invested in the 9% account.Then we can use the following system of linear equations to represent the problem:x + y = 28000 (the total amount invested is $28,000)x(0.12) + y(0.09) = 3015 (the total interest earned is $3,015)

To solve for x and y, we can use the substitution method. Solving the first equation for x gives us:x = 28000 - ySubstituting this into the second equation, we get:(28000 - y)(0.12) + y(0.09) = 3015Simplifying, we have:3360 - 0.12y + 0.09y = 3015Collecting like terms:0.03y = 345Dividing by 0.03, we get:y = 11500This means Fatuma invested $11,500 in the 9% account.

To find how much she invested in the 12% account, we can substitute y = 11500 into either of the original equations. Using x + y = 28000:x + 11500 = 28000x = 16500Fatuma invested $16,500 in the 12% account and $11,500 in the 9% account.

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suppose you buy a share of stock today for $5,000 and sell it for $8,000 at the end of five years. what interest rate will you have earned on your investment

Answers

Answer:

To calculate the interest rate earned on the investment, we can use the formula for compound interest:

FV = PV*(1 + r)^n

Where:

FV = Future value of the investment

PV = Present value of the investment

r = Annual interest rate (in decimal form)

n = Number of compounding periods

We can rearrange this formula to solve for the interest rate, which gives us:

r = (FV/PV)^(1/n) - 1

Substituting the given values, we get:

r = ($8,000/$5,000)^(1/5) - 1

r = 0.099 - 1

r = 0.098 or 9.8%

Therefore, the interest rate earned on the investment is 9.8%.

when a chef prepares a dinner for a customer, which factor is physical capital? a. the oven b. the food ingredients c. the chef d. the chef's training and experience

Answers

The physical capital in a restaurant kitchen when a chef prepares a dinner for a customer is the oven.

What is physical capital?

Physical capital is the equipment, machinery, and infrastructure used in a company or economy's production processes. These are physical objects that aid in the development of goods and services, such as machinery, computers, and structures like buildings, roads, and bridges. Physical capital is one of the three main factors of production, along with labor and natural resources.

Here, the oven is the physical capital in a restaurant kitchen when a chef prepares a dinner for a customer. The chef uses the oven to cook the food, and without it, the meal cannot be prepared. The other options, such as food ingredients, the chef, and the chef's training and experience, may be essential factors in the meal's preparation, but they are not physical capital.

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which of the following is a purpose of organizational development? multiple choice question. investigating the competition providing training designing products managing conflict

Answers

Organizational development has the following goals: Hence, "offering training" is the appropriate response to the multiple-choice query.

What is The goal of organisational development (OD)?

The goal of organisational development (OD), which includes a variety of interventions including training, leadership development, process improvement, and cultural change, is to increase an organization's effectiveness and productivity. Although researching the competition, creating goods, and handling conflict are all crucial tasks for firms, they are not the main goal of OD.

What does organisational development (OD) stand for?

Every successful organisation has a commitment to the organisational development (OD) concept at its core. When an organisation expands and develops, the term itself is believed to be the key to performance and sustainability.

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The purpose of organizational development providing training and manage conflict. The correct options are B and D.

Enhancing organizational effectiveness, easing change, and raising overall performance are the main goals of organizational development. It entails a number of actions designed to enhance an organization's systems, structures, processes, and overall culture. To educate people, improve communication, and promote a healthy work environment, OD projects frequently include training programs and conflict management techniques.

Thus, the ideal selections are options B and D.

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the sarbanes-oxley act applies to multiple choice question. companies that are formed as partnerships. companies that are required to file with the sec. any company organized in the united states. companies that operate internationally.

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The Sarbanes-Oxley Act (SOX) applies to any company organized in the United States, whether it is a corporation, partnership, or limited liability company. SOX is designed to protect shareholders and the general public from fraudulent financial reporting by public companies. It also provides guidelines and regulations to ensure that corporate governance is conducted responsibly and transparently.


SOX requires all public companies to maintain an effective system of internal control and financial reporting. It also requires companies to perform a thorough review and audit of their financial records. This review includes an assessment of the accuracy of financial statements, the adequacy of internal controls, and the integrity of management's assessments. Additionally, SOX requires public companies to disclose the results of the review and any related material changes in their financial statements.

Companies that are required to file with the Securities and Exchange Commission (SEC) must also comply with SOX. The SEC has the authority to impose fines and other punishments on companies that fail to comply with SOX. Additionally, SOX applies to companies that operate internationally as well, although different countries may have additional requirements that must be met in order to be compliant with SOX.

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A political pundit argues that the government should impose a tariff on steel rods because they are a necessary input into the production of various weapons. Free trade, she contends, would make the United States overly dependent on foreign countries for the supply of steel rods and thus, in case of war, unable to make enough weapons to defend itself.Which of the following justifications is the pundit using to argue for the trade restriction on steel rods?1. Using-protection-as-a-bargaining-chip argument2. Infant-industry argument3. Unfair-competition argument4. Jobs argument5. National-security argument

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The political pundit is using the national-security argument to argue for the trade restriction on steel rods.(option 5)

What is the national-security argument?

The national-security argument is used to defend trade restrictions. It is when a country limits trade or a particular product to protect its national security or military interests.

A government might use this argument to justify trade restrictions that restrict the flow of goods or services across its borders to protect its national security interests. In the given student question, the political pundit is using the national-security argument to argue for the trade restriction on steel rods.

She argues that the government should impose a tariff on steel rods because they are a necessary input into the production of various weapons. She contends that free trade would make the United States overly dependent on foreign countries for the supply of steel rods and thus, in case of war, unable to make enough weapons to defend itself.

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there is no way to limit your liability if you are the single owner in a business. group of answer choices true false

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False. As the single owner of a business, there are certain ways to limit your liability. These include forming a corporation or limited liability company (LLC), obtaining business insurance, and separating business and personal assets.

A single owner of a business, also known as a sole proprietor, is an individual who owns and operates a business on their own. In this type of business ownership, there is no legal distinction between the owner and the business entity. This means that the owner is personally responsible for all debts and liabilities of the business. As a single owner of a business, the owner has complete control over all aspects of the business, including decision-making, financial management, and operations. They are also entitled to all profits generated by the business, but are responsible for paying all expenses and taxes associated with running the business.

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the ceo of a well-established firm wants to change the production pattern for the betterment of the company. he is supported by a group of influential people from all levels in the organization who work to lead the change effort. this is an example of

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The CEO of a well-established firm wants to change the production pattern for the betterment of the company. He is supported by a group of influential people from all levels in the organization who work to lead the change effort. This is an example of a Bottom-Up Change Management approach.

A bottom-up approach is where management solicits feedback from employees and frontline workers before making decisions. It entails allowing those at the bottom of an organization to have a say in the company's decision-making process. It's also known as a grassroots approach.Bottom-up change management is a type of change management in which business decisions are made by individuals who are closer to the end-user, and then the decisions are passed up the hierarchy.

It's a type of organizational change in which middle and frontline employees are empowered to provide input and impact the direction of the organization. Therefore, the CEO's idea of changing the production pattern for the betterment of the company and being supported by a group of influential people from all levels in the organization who work to lead the change effort is an example of Bottom-Up Change Management approach.

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keith riggins expects an investment of $82,014 to return $10,000 annually for several years. if riggins earns a return of 10%, how many annual payments will he receive?

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Keith Riggins expects an investment of $82,014 to return $10,000 annually for several years. If Riggins earns a return of 10%, Keith Riggins expects an investment of $82,014 to return $10,000 annually for several years.

To figure out how many annual payments he will receive, use the Present Value Annuity Formula which is:

The present value of an annuity formula determines the value of a stream of equal payments at the end of each period, for a specified number of periods, discounted at a specified rate.

The formula for calculating the present value of an annuity is:

PV = C × [(1 – (1 / (1 + r)t)) / r]

Where, PV is the present value of the annuity stream

C is the payment amount per period

r is the interest rate per period

t is the total number of periods.

Present Value Annuity Formula :

PV = C × [(1 – (1 / (1 + r)t)) / r]

Where, PV = $82,014

C = $10,000

r = 10%

PV = $82,014

$82,014 = $10,000 × [(1 – (1 / (1 + 0.10)t)) / 0.10]

Now solve for t:

10 × $82,014 = $10,000 × (1 – (1 / (1 + 0.10)t))

$8,201.40 = 1 – (1 / (1 + 0.10)t)1 / (1 + 0.10)t

= 1 - $8,201.401 / (1 + 0.10)t

= 0.8194745t

= ln(0.8194745) / ln(1.10)t

≈ 6.987

Therefore, Keith Riggins will receive approximately 7 annual payments.

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