Author Question: Assume the information in Figure 13-1 is correct, EXCEPT the market value of property is now ... (Read 37 times)

misspop · **on:** Jul 11, 2018

Assume the information in Figure 13-1 is correct, EXCEPT the market value of property is now estimated to be 450,000.

Use the Book value Plus Adjustment method along with the information from 13-1 and the new estimated value of property to value the firm's equity.
A) 1,100,000
B) 1,200,000
C) 1,300,000
D) 1,400,000

Question 2

Annuity A has a greater present value than annuity B when cash flows are discounted using the same positive interest rate for each annuity. Which annuity will have the larger future value if compounded at the same interest rate?

A) Annuity A will have a larger future value.
B) Annuity B will have a larger future value.
C) The future values will be the same.
D) There is not enough information to determine which annuity will have a greater future value.

Zack0mack0101@yahoo.com · **Reply #1 on:** Jul 11, 2018

Answer to Question 1

A
Explanation: A) BV + Adjustments = 1,200,000 + (450,000 - 550,000 ) + (100,000 - 60,000 ) + (180,000 - 220,000 ) = 1,100,000.

Answer to Question 2

A