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 39 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
Gracias!

triiciiaa

  • Member
  • Posts: 349
Reply 3 on: Yesterday
Thanks for the timely response, appreciate it

« previous next »
 

Did you know?

In 1835 it was discovered that a disease of silkworms known as muscardine could be transferred from one silkworm to another, and was caused by a fungus.

Did you know?

Bacteria have been found alive in a lake buried one half mile under ice in Antarctica.

Did you know?

Less than one of every three adults with high LDL cholesterol has the condition under control. Only 48.1% with the condition are being treated for it.

Did you know?

Only 12 hours after an egg cell is fertilized by a sperm cell, the egg cell starts to divide. As it continues to divide, it moves along the fallopian tube toward the uterus at about 1 inch per day.

Did you know?

During the twentieth century, a variant of the metric system was used in Russia and France in which the base unit of mass was the tonne. Instead of kilograms, this system used millitonnes (mt).

Changes in boreal forest composition along a chronosequence in Quebec. Dates refer to the year of th Changes in boreal forest composition along a chronosequence in Quebec. Dates refer to the year of th
Uranus revolves around the Sun once every 84 Earth years. Its average distance from the Sun is rough Uranus revolves around the Sun once every 84 Earth years. Its average distance from the Sun is rough
Approximately 40 percent of farmers in the United States are 55 years old or older Approximately 40 percent of farmers in the United States are 55 years old or older
Top Eleven Countries in Year 2009 According to Three Different Measures Top Eleven Countries in Year 2009 According to Three Different Measures
Research that has examined babies' ability to recognize themselves develops in the 2 year Research that has examined babies' ability to recognize themselves develops in the 2 year
A promissory note has a face value of $6000 and it has a date of issue of June 1 this year. The ... A promissory note has a face value of $6000 and it has a date of issue of June 1 this year. The ...
Video: Enzyme-Catalyzed Reactions

For a complete list of videos, visit our video library