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Galina-37
1 month ago
6

Tom Adams has received a job offer from a large investment bank as a clerk to an associate banker. His base salary will be $59,0

00. He will receive his first annual salary payment one year from the day he begins to work. In addition, he will get an immediate $15,000 bonus for joining the company. His salary will grow at 3.9 percent each year. Each year he will receive a bonus equal to 10 percent of his salary. Mr. Adams is expected to work for 20 years. What is the present value of the offer if the discount rate is 10 percent?
Business
1 answer:
Scilla [3.8K]1 month ago
3 0
The present value of the offer is $739,018.03 The cash flows mentioned, spanning from the end of year 1 to the end of year 20, form a growing annuity for 20 years. The present value formula for a growing annuity is as follows: PV= where P represents the annuity payment in the first year, i is the interest rate per period, g is the growth rate, and n denotes the number of payment periods. The first year’s P is the base salary of $59,000 along with a 10% bonus of $5,900, totaling $64,900; g is 3.9%; i=0.1, and n=20. The present value of the offer equals 15,000 received immediately plus the present value of the growing annuity = 739,018.03.
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This statement is inaccurate.
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Question Six
harina [3808]

Answer:

The estimated 90% confidence interval for the average depth of all frames in the consignment ranges from a lower boundary of 105.419 mm to an upper boundary of 106.581 mm.

Explanation:

The confidence interval for the mean is calculated as mean +/- margin of error (E)

mean = 106 mm

sample sd = 3.5mm

n is the sample size = 100

degree of freedom = n-1 = 100-1 = 99

confidence level (C) = 90% = 0.9

significance level = 1 - C = 1 - 0.9 = 0.1 = 10%

the critical value (t) for 99 degrees of freedom at a 10% significance level is 1.6602

E = t × sample sd/√n = 1.6602×3.5/√100 = 0.581 mm

Lower limit of mean = mean - E = 106 - 0.581 = 105.419 mm

Upper limit of mean = mean + E = 106 + 0.581 = 106.581 mm

The 90% confidence interval is (105.419 mm, 106.581 mm)

5 0
1 month ago
On July 1, 1990, John invested $300 in an account that earned 8% simple interest. On July 1, 1993 he closed this account and dep
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Response:

The interest rate is 5.7%          $21.204

Clarification:

The formula for calculating simple interest is

I =

\frac{P*R*T}{100}

Given that

I = Interest, T = time;;R is rate; P = principal

John earned this interest by July 1, 1993 as follows:

           I = \frac{300*1* 8}{100} = 72

Consequently, the total amount in John's account by July 1, 1993 would then be

= $300 + $72= $372

This indicates he utilized these funds at an interest rate of q.

On July 1, 1998, John’s total was $520, meaning the interest accumulated in these five years equals $520 - $372 = $148.

Using the simple interest formula: Interest = PRT/100

148 =

\frac{520*5*q }{100}        = 14,800 =2600q

       q = \frac{14,800}{2,600}

Thus, the rate is found to be 5.7%

The interest amount between July 1, 1993, and July 1, 1994 calculates as

    I = \frac{PRT}{100} = \frac{372*5.7*1}{100}

          = $21.204

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