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 105 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
:D TYSM

amit

  • Member
  • Posts: 364
Reply 3 on: Yesterday
Great answer, keep it coming :)

« previous next »
 

Did you know?

There are approximately 3 million unintended pregnancies in the United States each year.

Did you know?

There are major differences in the metabolism of morphine and the illegal drug heroin. Morphine mostly produces its CNS effects through m-receptors, and at k- and d-receptors. Heroin has a slight affinity for opiate receptors. Most of its actions are due to metabolism to active metabolites (6-acetylmorphine, morphine, and morphine-6-glucuronide).

Did you know?

Never take aspirin without food because it is likely to irritate your stomach. Never give aspirin to children under age 12. Overdoses of aspirin have the potential to cause deafness.

Did you know?

The tallest man ever known was Robert Wadlow, an American, who reached the height of 8 feet 11 inches. He died at age 26 years from an infection caused by the immense weight of his body (491 pounds) and the stress on his leg bones and muscles.

Did you know?

People about to have surgery must tell their health care providers about all supplements they take.

Hong Kong is a strange situation. A British colony since 1842, it was handed back to China in 1997 a Hong Kong is a strange situation. A British colony since 1842, it was handed back to China in 1997 a
Correctly administering and interpreting an intelligence test is a skill that takes many years for ... Correctly administering and interpreting an intelligence test is a skill that takes many years for ...
Hospitalization per year Hospitalization per year
Average Years of Schooling versus GDP per Capita Average Years of Schooling versus GDP per Capita
One year ago, Christos bought 1000 units of the Dominion Aggressive Growth Fund at $20.35 per ... One year ago, Christos bought 1000 units of the Dominion Aggressive Growth Fund at $20.35 per ...
Chinese Dragon new year 2024 Chinese Dragon new year 2024
Video: Wound Care

For a complete list of videos, visit our video library