The value after 4 years will be $10327.71 with the present value of $9000.
What is compound interest?Compound interest, often known as interest on interest, is the practice of adding interest to the principal amount of a loan or deposit. It occurs when interest is reinvested rather being paid out, resulting in interest being generated on both the principal amount and any accumulated interest over the next period.
What is the investment?An asset that is developed with the purpose of enabling money to accumulate is essentially what an investment is. The wealth generated can be used for a variety of objectives, including bridging income gaps, saving for retirement, or carrying out certain particular commitments like loan repayment, tuition payment, or the acquisition of other assets.
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The Venezuelan bolivar (VEF) is currently officially pegged to the U.S. dollar at a rate of $0.10/bolivar. However, in practice no one cares about this pegged rate because capital controls prevent anyone from actually trading at this rate. Without capital controls, investors would bankrupt the Venezuelan government by demanding dollars in exchange for bolivars. Which scenario is consistent with this description
Answer:
the options are missing, so I looked for a similar question:
A. A black market exchange rate of $0.05/VEF because the government peg overvalues the bolivar
B. A black market exchange rate of $0.20/VEF because the government peg overvalues the bolivar
C. A black market exchange rate of $0.05/VEF because the government peg undervalues the bolivar
D. A black market exchange rate of $0.20/VEF because the government peg undervalues the bolivar
The answer should be:
A. A black market exchange rate of $0.05/VEF because the government peg overvalues the bolivarThe bolivar should be worth much less if anyone could buy or sell dollars freely, thereofre, this means that the bolivar is overvalued by the Venezuelan government.
If you want to use a method of dispute resolution other than a trial and you want someone else to decide the issues between you and a business partner, what type of dispute resolution would you select? O A. Conciliation O B. Arbitration O C. Negotiations D. Mediation
Answer:
b
Explanation:
Distanet Corporation, an Ohio corporation, is a competitor of Telenex Corporation in the smart phone market. After examining past and future price and sales data, and after consulting an accountant and an economist, the board of directors of Distanet voted to reduce the price of the company's line of phones, believing that by reducing the price of their product the corporation would be able to compete more successfully with Telenex. The plan was put into operation but did not prove effective. In fact, Distanet lost a significant amount of money as a result of implementing the plan and its share of the smart phone market became miniscule. Aileen, a shareholder of Distanet, made a demand that the corporation sue the directors, seeking to hold them liable for the failure of the plan to improve Distanet's position in the smart phone market and for the losses experienced by the corporation as a result. The board rejected the demand and Aileen organized other shareholders to file a derivative suit. Will she succeed in her suit
Answer: b. No, under the Business Judgment Rule, the members of the Board of Directors will not be held liable in this case.
Explanation:
The Board cannot be held liable for the failure of the plan because they acted in good faith when making the decision as they sincerely believed that it would help the company by making it more competitive.
They are therefore protected by the Business Judgement Rule which espouses that when the directors in a company make a decision, they do so in good faith and so should not be held liable if the decision does not achieve its desired objective. Of course this not not apply to illegal decisions.
Cultural differences that might influence the guest service experience include all of the following except
diet
greetings
humor
marriage
Answer: marriage
Explanation: You are correct! Diet, greetings, humor, and marriage are all cultural differences that can influence the guest service experience. However, marriage is not a cultural difference and therefore would not be included in this list.
4) An investor has $60,000 to invest in a $280,000 property. She can obtain either a $220,000 loan at 9.5 percent for 20 years or a $180,000 loan at 9 percent for 20 years and a second mortgage for $40,000 at 13 percent for 20 years. All loans require monthly payments and are fully amortizing. a. Which alternative should the borrower choose, assuming she will own the property for the full loan term
Answer:
A. Alternative 1
B. No
C. No
Explanation:
a) Calculation to determine Which alternative should the borrower choose
First step is to calculate the EMI of Alternative 1 and Alternative 1 using this formula
EMI=[P∗R∗(1+R)^N]/[(1+R)N^−1]
Where:
P represent principal = $180,000
R represent interest rate per month = 9%/12 = 0.0075
N represent number of months = 240
Let Plug in the formula
EMI=[180000∗0.0075∗(1+0.0075)^240]/[(1+0.0075)^240^−1]....(1)
EMI=$1,619.51
EMI of the second mortgage in Alternative 2 = $468.63
Second step is to calculate the Total EMI
Total EMI=$1,619.51+$468.63
Total EMI=$2,088.14
Third step is to assume that the average cost of debt in Alternative (2) = R
$2,088.14=[220000∗R/12∗(1+R/12)^240]/[(1+R/12)^240−1]...(2)
Now let solve for the value of R in (2)
R=9.76%
Based on the above calculation we can that Alternative 2 which is 9.76% is greater that Alternative 1 which is 9.5% which means that the borrower should choose ALTERNATIVE 1 $220,000 loan at 9.5 percent for 20 years
b) Calculation to determine if your answer would change if the borrower plans to own the property for only five years
First step is to calculate the loan balance in Alternative 2 after 5 years
Ending balance Loan 1 in Alternative 2 = $159,672.69
Add Ending balance Loan 2 in Alternative 2= $37,038.78
Total balance $196,711.47
Now let assume that the cost of debt in Alternative 2 = R
Hence,
$220,000=$2,088.14∗PVIFA (60payments,R/12)+$196,711.47/(1+R/12)^60....(3)
Let solve for R in the equation (3)
R=9.74%
NO. Based on the above calculation my answer would NOT change if the borrower plans to own the property for only five years reason been that the cost of debt is greater in Alternative 2 which means that Alternative 1 will be preferable.
c) Calculation to determine if your answers to (a) and (b) would change if the second mortgage had a 10-year term
First step is to calculate EMI in the case of 10 year term in Alternative 2
First mortgage EMI $2,280.16
Add Second mortgage EMI $597.24
Total EMI $2,877.40
($2280.16+ $597.24)
Second step is to consider that R is the cost of debt
Hence,
$2,877.40=[220000∗R/12∗(1+R/12)^120]/[(1+R/12)^120−1]...(4)
R = 9.75%
Based on the above calculation Alternative I is preferable because of the lower cost of debt.
Let calculate the ending balance after 5 years in Alternative 2
Ending balance Loan 1 in Alternative 2 109,843.19
Add Ending balance Loan 2 inAlternative 2 26,248.89
Total balance $136,092.08
Now let assume that the cost of debt in Alternative 2= R
Hence,
$22,000=$2,877.40∗PVIFA(60 payments,R/12)+$136,092.08/(1+R/12)^60....(4)
Let solve for R in equation (3)
R=9.74%
NO. Based on the above calculation my answers to (a) and (b) would NOT change if the second mortgage had a 10-year term reason been that the cost of debt is greater in Alternative 2 which means that Alternative 2 will be preferable.
which term best completes the diagram
A) Captial
B) Goods
C) Wages
D) Natural resources
Answer:
C) Wages
Explanation:
A.P.E.X.
$1,500 in investment account with 8.5 percent interest
Explanation:
Results
At the end of 20 years, your savings will have grown to $4,811.
You will have earned in $3,311 in interest.
Jazmine loves posting on social media. She loves spreading the word about projects she's working on and helping others do the same through advertisements. Which organization is the best for Jazmine?
Answer: DECA
Explanation:
Month’s transaction for Alem Photographic Studio are use based on their occurrence during March, 2012.
Hill Photographic Studio is a service-oriented business owned and run by Ann Hill. The balance sheet accounts, income statement accounts, and the chart of accounts serve as its foundation.
What is Transaction?An agreement or communication between a buyer and a seller to trade products, services, or assets in exchange for money is a financial transaction. Any trade involves a shift in the financial situation of two or more entities, whether they be people or businesses. There are always one or even more financial assets involved in a financial transaction, most frequently money or another pricey object like gold or silver. Financial transactions come in a wide variety of forms. The most frequent kind, purchases, take place when a consumer is sold a thing, service, or other commodity in exchange for cash. The majority of purchases are done with cash, which can be physical money, debit cards, or checks. Credit, which provides instant access to funds in return for payback at a later time, is the other primary method of payment.
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Based on the following information for GreenTurf's proposed new line of battery-operated grass trimmers, you estimate the incremental cash flows (excluding sales, COGS, and depreciation) for the project to be closest to:
Market focus group expense for research conducted last month: $25,000
Current income from lease of warehouse space to be used for new assembly line: $120,000
Annual maintenance contract on new assembly line equipment: $9,000
Anticipated additional sales of battery chargers: $150,000
a. $46,000.
b. $21,000.
c. $141,000.
Earth Farm arranges to have Fresh Express Inc., a common carrier, transport a load of almonds. Fresh Express will be liable for any loss or damage to the almonds a. unless the carrier exercised reasonable care. b. unless the loss or damage is caused by a natural disaster. c. under no circumstances. d. under any circumstances.
Answer:
b. unless the loss or damage is caused by a natural disaster.
Explanation:
A contract can be defined as an agreement between two or more parties (group of people) which gives rise to a mutual legal obligation or enforceable by law.
There are different types of contract in business and these includes: fixed-price contract, cost-plus contract, bilateral contract, implies contract, unilateral contract, adhesion contract, unconscionable contract, option contract, express contract, etc.
Mutual assent is a legal term which represents an agreement by both parties to a contract. When two parties to a contract both have an understanding of the parameters, terms and conditions surrounding a contract, it ultimately implies that they are in agreement; this is generally referred to as mutual assent.
In this scenario, Earth Farm enters a contractual agreement with Fresh Express Inc., a common carrier, to have them transport a load of almonds.
By law, Fresh Express will be liable for any loss or damage to the almonds unless the loss or damage is caused by a natural disaster such as earthquake, volcanoes, flood, tsunami, etc.
This ultimately implies that, any loss or damage to the almonds incurred by Fresh Express based on intentional or artificial actions.
Answer:
b. unless the loss or damage is caused by a natural disaster.
Explanation:
Hope this helps
A run on banks will cause the supply
rate to do which of the following?
A bank run happens when significant numbers of depositors withdraw money from banks at the same time out of concern that the institution will fail. With more customers withdrawing money, banks will deplete their cash reserves and eventually default.
What happens when a bank fails?A default happens when a borrower fails to make the due debt installments. Defaults on secured debt, such as a mortgage loan backed by a home, as well as unsecured debt, such as credit cards or a college loan, can occur. Borrowers who default are vulnerable to legal claims and may have limited future access to credit.
When a bank fails, the FDIC takes control and either sell the bankrupt bank to a more solvent bank or takes over the bank's functioning.
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Which of the following is a disadvantage of the corporation form of ownership?
An inability to accumulate capital
The unlimited liability to the members of the board
Double taxation on profits and individuals
The lack of continuity
Answer:
Option C, Double taxation on profits and individuals
Explanation:
The disadvantages of the corporation form of ownership are as follows -
a) It takes lot of time and hence is time consuming
b) The taxation gets double
c) Also, the formalities/protocols are very tough
Hence, the option C is correct
Explain why different communication methods are used in the business environment?
Answer:
Different communication methods are used in different circumstances because sometimes a certain method will be more effective in terms of cost, time and impact, and sometimes it will be more appropriate.
Explanation:
Different communication methods are used in the business environment to suit different situations and needs. It is important to choose the right method of communication to ensure effective communication and to avoid misunderstandings.
There are some important communication methods are:
Face-to-face communication is utilized when there needs to be rapid clarification, feedback, or discussion.
When a written record of the conversation is required or the receiver cannot be reached in person, email is the preferred means of communication.
When a formal debate or presentation is required, this approach is employed in business meetings.
Social media is a technique utilized when a wide audience has to be reached fast.
Applications for team messaging are utilized when quick, informal communication is required among team members.
As a result, the significance of the different communication methods are used in the business environment are the aforementioned.
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A company with $690,000 in operating assets is considering the purchase of a machine that costs $78,000 and which is expected to reduce operating costs by $20,000 each year. These reductions in cost occur evenly throughout the year. The payback period for this machine in years is closest to (Ignore income taxes.): (Round your answer to 1 decimal place.)
Answer:
It will take 3 years and 37 days to cover the initial investment.
Explanation:
Giving the following information:
Initial investment= $78,000
Cash flow= $20,000
The payback period is the time required for the cash flows to cover the initial investment:
Year 1= 20,000 - 78,000=-58,000
Year 2= 20,000 - 58,000= 38,000
Year 3= 20,000 - 38,000= 18,000
Year 4= 20,000 - 18,000= 2,000
To be more accurate:
(2,000/20,000)= 0.1*365= 37
It will take 3 years and 37 days to cover the initial investment.
A contractual vertical marketing system is exemplified by: Group of answer choices a florist shop that buys from a wholesale plant nursery. a coffee producer who owns a chain of coffee shops. the relationship of a popular grocery chain of stores with its suppliers. the franchise system of a reputed sandwich brand.
Answer:
the franchise system of a reputed sandwich brand.
Explanation:
The contractual vertical marketing system would be the organization that is the retail cooperative, wholesaler i.e. chain who do sponsor and many franchising programs. In this the parties are maintaining their independene and operate as individually but they work together in order to accomplish thir goals and objectives by having high efficiency
so according to the given situation, the last option is correct
1. Issued $45000 of par value common stock for cash. 2. Repaid a 6 year note payable in the amount of $21000. 3. Acquired land by issuing common stock of par value $95000. 4. Declared and paid a cash dividend of $1500. 5. Sold a long-term investment (cost $2500) for cash of $7500. 6. Acquired an investment in IBM stock for cash of $14500. What is the net cash provided used by investing activities
Answer:
($7,000)
Explanation:
According to the scenario, computation of the given data are as follows,
Sold a long term investment = $7,500
Acquired investment in IBM = $14,500
So, we can calculate the net cash provided by using following formula,
Net cash provided = Sold a long term investment - Acquired investment in IBM
By putting the value, we get
Net cash provided = $7,500 - $14,500
= ($7,000)
Historically, demand has averaged 1447 units per week with a standard deviation of 715. The company currently has 2855 units in stock. What is the probability of a stockout?
Answer:
c. 97.558%
Explanation:
Options are "A. 50.0.% B. 2.442% C. 97.558% D.197.0% E. 47,442%"
Mean = μ = 1447
Standard deviation = σ = 715
Observed value = X = 2855
Using z-score formula, Z = (X - μ) / σ
Z = (2855 - 1447) / 715
Z = 1.97
P(Z<1.97) = 0.97558
P(Z<1.97) = 97.558%
So, the probability of a stock-out is 97.558%.
On January 1, 2020, Shay Company issues $700,000 of 10%, 15-year bonds. The bonds sell for $684,250. Six years later, on January 1, 2026, Shay retires these bonds by buying them on the open market for $731,500. All interest is accounted for and paid through December 31, 2025, the day before the purchase. The straight-line method is used to amortize any bond discount. 1. What is the amount of the discount on the bonds at issuance
Answer:
Discount on bonds issuance = $15750
Explanation:
A bond is issued at a discount when the issue price of the bond is less than the face value of the bond. This usually happens when the coupon rate paid by the bond is less than the market interest rate. To calculate the amount of discount on bonds issuance, we simply deduct the issue price from the face value of the bond. Thus,
Discount on Bonds = Face value - Issue price
As we know the face value of the bonds is $700000 and the issue price is $684250, we can calculate the discount on issuance to be,
Discount on bonds issuance = 700000 - 684250
Discount on bonds issuance = $15750
Select all that apply) Alberto is a prior client, but you are having trouble locating him when you enter his name, phone number and date of birth. How else can you search for Alberto in Appointment Manager?
Using an email address.
Using his full Social Security number.
Using his spouse’s name.
Using a zip code.
One can search for Alberto in Appointment Manager by Using an email address.
What is Social security number?A social security number, often known as an SSN, is a special identification number used by citizens of the United States and other inhabitants of the nation.
The tool designed to manage your appointments is called appointment manager. With plenty of options, including the ability to specify opening days and hours, lunch breaks, numerous appointments at once, recurring appointments, and search and book services from other providers, it is simple to use, adaptable, and suitable with the majority of business and personal schedules.
Therefore, Option (a) is correct.
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Meredith is looking for work as a computer programmer. Although her prospects are good, she hasn't yet taken a job. Julie is looking for work in a steel mill, but there aren’t many job ads for steel workers and every time she shows up for an interview, there are any more people than openings. Which statement best describes the nature of their unemployment?
a. Meredith and Julie are both frictionally unemployed.
b. Meredith and Julie are both structurally unemployed.
c. Meredith is frictionally unemployed, and Julie is structurally unemployed.
d. Meredith is structurally unemployed, and Julie is frictionally unemployed.
Answer:
C
Explanation:
Frictional unemployment: the period of time a person is unemployed from the period he leaves his current job and the time he gets another job. Meredith is searching for a job. Thus she is frictionally unemployed.
structural unemployment is an unemployment that occurs as a result of changes in the economy. These changes can be as a result of changes in technology, polices or competition. Structural unemployment tends to be permanent.
There seems to be a reduction in the demand for steel workers. Thus, Julie is structurally unemployed
GlaxoSmithKline sponsored a weight-loss community in preparation for the launch of its first weight-loss drug, Alli. Which of the following could be a key marketing benefit of forming an online community? A) A community enables GlaxoSmithKline to create opinion leaders. B) Users generate their own content, so ads may appear near a variety of messages. C) Two-way information flow can give the company customer information and insights. D) The community can become a point of contact for product recalls. E) An online community offers controllable one-way communication with customers.
Answer: C) Two-way information flow can give the company customer information and insights.
Explanation:
An online community, can also be referred to as the also web community, and this simply means a community whereby the members can interact with one another through the Internet.
A key marketing benefit of forming an online community by GlaxoSmithKline is that there'll be a two-way information flow that can give the company customer information and insights.
For example, through the use of social media, the company can communicate with the customers and also get feedbacks from them.
There is a small fictitious island country, called Noil, floating in the south Pacific ocean. Many years ago there was an abundance of fish and the population grew rapidly. Now the adult population has reached a total of 35 thousand people. This year fishing and other jobs have been on the decline and now 1 thousand people are looking to find work. With an increasing elderly population 3 thousand are now retired. Boil does not have an army, but it does have a small coast guard of 432 citizens serving the country and patrolling the waters where needed. What is the country of Nails unemployment rate
Answer: 3.2%
Explanation:
The labor force of a nation consists of its working class population who are not retired, willing to work, and are not part of the military or defense bodies such as the Coast guard.
The labor force of this nation is therefore:
= Adult population - Retired people - Coast guard
= 35,000 - 3,000 - 432
= 31,568 people
If a thousand people are unemployed, the unemployment rate is:
= Unemployed / Labor rate
= 1,000 / 31,568
= 3.1568 %
= 3.2%
A bank account is opened in the name of 'X' with full KYC of 'X'. 'X' later sells his account to 'Y', who is now using the account and 'X' is not aware of the trasnactions in the account. Such an account is called_
Answer:
abcdefu
Explanation:
Such an account is called a "benami account"
The scenario you described, where a bank account is opened in the name of 'X' with full KYC (Know Your Customer) of 'X', but 'X' later sells the account to 'Y' who uses it without 'X' being aware of the transactions, does not have a specific term commonly used to describe it. It seems to be an unauthorized use of someone else's bank account.
However, it is important to note that such a scenario raises significant legal and ethical concerns. Using someone else's bank account without their knowledge or consent is generally considered fraudulent and illegal in many jurisdictions. It's crucial for individuals to protect their personal information, including bank account details, and to promptly report any suspicious or unauthorized activity to their bank or relevant authorities.
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Una compañía de cemento aceptó un préstamo por $18.500 por un trabe o completado en un edificio
comercial. El préstamo fue por 180 dias a un 7.5% de interés simple. Si la nota fue vendida a una tasa de
descuento de 9% por 30 dias después de recibido, calcule el bank discount.
Select one:
a
a. $715.88
b. $720.49
c. $723.69
d. $719.77
Answer:
b
Explanation:
Which of these is NOT considered an "out-of-pocket" expense?
O Your monthly premium
O A copay of $15 to fill a prescription
O A $1000 deductible if you're in an auto accident
O Excess bills from a car accident once you've gone over your maximum coverage limit
Answer:
c
Explanation:
a $1000 deduct because your insurance covers it.
The Real Estate Products Division of McKenzie Co. is operated as a profit center. Sales for the division were budgeted for 2019 at $1,250,000. The only variable costs budgeted for the division were cost of goods sold ($610,000) and selling and administrative ($80,000). Fixed costs were budgeted at $130,000 for cost of goods sold, $120,000 for selling and administrative and $95,000 for noncontrollable fixed costs. Actual results for these items were:
Answer:
Requirement: Prepare a responsibility report for the Real Estate Products Division of McKenzie Co for 2019.
Note: See missing word attached as picture below
Responsibility report 2019
Budget Actual Difference
Sales $1,250,000 $1,175,000 75000 U
Variable costs
Cost of goods sold 610,000 545,000 65000 F
Selling & Admin 80,000 82,000 2000 U
Total $690,000 $627,000 63000 F
Contribution Margin $560,000 $548,000 12000 U
Controllable fixed cost
Cost of goods sold 130,000 140,000 10000 U
Selling & Admin 120,000 100,000 20000 F
Total $250,000 $240,000 10000 F
Controllable Margin $310,000 $308,000 2000U
Prepare the general journal entries for Infinity Diner for the following notes receivable transactions (assuming there are 28 days in February). When required, enter amounts to the nearest cent. If an amount box does not require an entry, leave it blank. Dec. 3 Sold merchandise to Brian Chan on account, $6,900. 11 Sold merchandise to Gloria Lupo on account, $3,600. Jan. 2 Received a $6,900, 10%, 30-day note from Brian Chan in payment of account. 10 Received a $3,600, 12%, 30-day note from Gloria Lupo in payment of account. Feb. 1 Received $600, plus interest on January 2 note, and a new, 14% 60-day note for the remaining balance. Feb. 9 On the maturity date, note dated January 10 was dishonored. Apr. 2 On the maturity date, Infinity Diner received principal and interest for February 1 note.
Answer:
Infinity Diner
General Journal Entries:
Dec. 3 Debit Accounts receivable (Brian Chan) $6,900
Credit Sales Revenue $6,900
To record the sale of merchandise on account.
Dec. 11 Debit Accounts receivable (Gloria Lupo) $3,600
Credit Sales Revenue $3,600
To record the sale of merchandise on account.
Jan. 2 Debit 10% Notes receivable (Brian Chan) $6,900
Credit Accounts receivable (Brian Chan) $6,900
To record the acceptance of a 30-day note in payment of account.
Jan. 10 Debit 12% Notes receivable (Gloria Lupo) $3,600
Credit Accounts receivable $3,600
To record the acceptance of a 30-day note in payment of account.
Feb. 1 Debit Cash $657.50
Debit 14% Notes receivable (Brian Chan) $6,300
Credit 10% Notes receivable (Brian Chan) $6,900
Credit Interest revenue $57.50
To record the acceptance of a 60-day note for the remaining balance.
Feb. 9 Debit Accounts receivable (Gloria Lupo) $3,636
Credit 12% Notes receivable (Gloria Lupo) $3,600
Credit Interest revenue $36
To record the dishonor of note on maturity date.
Apr. 2 Debit Cash $6,447
Credit 14% Notes receivable (Brian Chan) $6,300
Credit Interest revenue $147
To record the receipt of cash for full settlement on account.
Explanation:
a) Data and Analysis:
Dec. 3 Accounts receivable (Brian Chan) $6,900 Sales Revenue $6,900
Dec. 11 Accounts receivable (Gloria Lupo) $3,600 Sales Revenue $3,600
Jan. 2 10% Notes receivable (Brian Chan) $6,900 Accounts receivable (Brian Chan) $6,900 30-day note in payment of account.
Jan. 10 12% Notes receivable (Gloria Lupo) $3,600 Accounts receivable $3,600 30-day note in payment of account.
Feb. 1 Cash $657.50 14% Notes receivable (Brian Chan) $6,300 10% Notes receivable (Brian Chan) $6,900 Interest revenue $57.50 60-day note for the remaining balance.
Feb. 9 Accounts receivable (Gloria Lupo) $3,636 Notes receivable (Gloria Lupo) $3,600 Interest revenue $36
Apr. 2 Cash $6,447 14% Notes receivable (Brian Chan) $6,300 Interest revenue $147
Firm 1 and firm 2 are competing for a franchise. The present value of the net revenues generated by the franchise are equal to R. Each firm’s probability of winning the franchise is given by its proportion of the total spent by the two firms on lobbying the local government committee that awards the franchise. That is, if I1 and I2 represent the lobbying expenditures of firms 1 and 2, respectively, then firm 1’s probability of winning is given by I1/(I1 + I2), while firm 2’s probability of winning is I2/(I1 + I2). If each firm assumes that the other firm’s spending is independent of its own, what is the equilibrium level of spending for each firm?
Answer:
Equilibrium level of spending = R
Explanation:
Firm 1 : I1 ( lobbying expenditure ) , P of firm 1 = I1/(I1 + I2 )
Firm 2 : I2( lobbying expenditure) , P of firm 2 = I2/(I1 + I2 )
The equilibrium level of spending for each firm will be = present value of net revenues that is being generated by the Franchise
i.e. equilibrium level of spending = R
M Corporation has provided the following data concerning an investment project that it is considering: Initial investment$220,000 Annual cash flow $129,000per year Expected life of the project 4years Discount rate 9% Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using the tables provided. The net present value of the project is closest to:
Answer:
$197,923.86
Explanation: