This topic contains a solution. Click here to go to the answer
« previous next »

Author Question: Michael received a professional baseball contract paying 7,000,000 per year for 5 years, Bert ... (Read 95 times)

OSWALD

  • Hero Member
  • *****
  • Posts: 580
on: Jul 11, 2018
Michael received a professional baseball contract paying 7,000,000 per year for 5 years, Bert received a two-year contract for 16,000,000 per year. For purposes of calculations, treat these contracts as ordinary annuities.
 
  Who's contract has a greater present value if we assume a discount rate of 6?
  A) Bert = 29,334,283
  B) Michael = 29,486,547
  C) Bert = 39,459651
  D) Michael = 39, 743,196

Question 2

Which of the following equations for the Book value Plus Adjustment method is correct?
 
  A) Value of equity (VE) = market value of equity - adjustments
  B) Value of equity (VE) = book value of equity + adjustments
  C) Value of equity (VE) = book value of equity - adjustments
  D) Value of equity (VE) = market value of equity + adjustments


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
Marked as best answer by a Subject Expert

johnharpe

  • Sr. Member
  • ****
  • Posts: 338
Reply #1 on: Jul 11, 2018
Answer to Question 1

B
Explanation: B) Michael: Via Calculator: N = 5, I =6, PMT = 5,000,000, Solve for PV = 29,486,547.
Bert: Via Calculator: N = 2, I =6, PMT = 16,000,000, Solve for PV = 29,334,283.

Answer to Question 2

B


OSWALD

  • Member
  • Posts: 580
Reply 2 on: Jul 11, 2018
YES! Correct, THANKS for helping me on my review

Jsherida

  • Member
  • Posts: 314
Reply 3 on: Yesterday
Excellent

« previous next »
 

Did you know?

Methicillin-resistant Staphylococcus aureus or MRSA was discovered in 1961 in the United Kingdom. It if often referred to as a superbug. MRSA infections cause more deaths in the United States every year than AIDS.

Methicilli ...
Did you know?

There are more sensory neurons in the tongue than in any other part of the body.

Did you know?

Amphetamine poisoning can cause intravascular coagulation, circulatory collapse, rhabdomyolysis, ischemic colitis, acute psychosis, hyperthermia, respiratory distress syndrome, and pericarditis.

Did you know?

It is difficult to obtain enough calcium without consuming milk or other dairy foods.

Did you know?

Approximately one in four people diagnosed with diabetes will develop foot problems. Of these, about one-third will require lower extremity amputation.

20,000 year old Arctic ground squirrel mummy 20,000 year old Arctic ground squirrel mummy
Possible Earth 5 billion years from now Possible Earth 5 billion years from now
Parenting Tips for Teen Years Parenting Tips for Teen Years
This 80-year old man in a village in Hubei, China, has slowed down, but he has not retired. He is ... This 80-year old man in a village in Hubei, China, has slowed down, but he has not retired. He is ...
Literacy Development in the Early Years: Helping Children Read and Write Literacy Development in the Early Years: Helping Children Read and Write
A non-interest-bearing five-year note for $54600.00 issued May 1, 2015, is discounted April 1, ... A non-interest-bearing five-year note for $54600.00 issued May 1, 2015, is discounted April 1, ...
Video: Cellular Defects - Osteoblasts, Osteoclasts and Osteocytes

For a complete list of videos, visit our video library