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Question
You have recently accepted a one year employment term by a firm. The firm has given you the option of receiving your salary as a lump sum value of $30,000 at the end of the year or as 12 monthly payments of $2,400 starting one month after you start work. If your relevant discount rate is 2 percent per month, then which salary options would you prefer? (Ignore taxes, risk, and consumption needs.) Choose the best answer.
a. The lump sum payment, since it has the larger future value.
b. Monthly payments, since you do not have to wait so long to receive your money.
c. Either one, since they have the same present value.
d. The lump sum payment, since it has the larger present value.
e. Monthly payments, since it has the larger present value.
Answer
This answer is hidden. It contains 377 characters.
Related questions
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Because an investor borrowing funds for margin trading pays a fixed rate to borrow funds from his broker, the margin trading returns are magnifies the returns on the assets value.
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b. False
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a. True
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a. True
b. False
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a. $100,000
b. $200,000
c. $500,000
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Q:
Refer to Foxy Ladies Investment Club. What was the portfolio's geometric average return per year from 2010 through 2012?
a. 20.0%
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Q:
Refer to Foxy Ladies Investment Club. What was the portfolio's simple arithmetic average return per year from 2010 through 2012?
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Q:
The one-year holding period returns for Cherokee Adventures for 2010 and 2011 are given below. If Cherokee's geometric average return for 2010 through 2012 was 15 percent, what was its implied one-year holding period return for 2012? Year 1-year holding
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Q:
The simple arithmetic average return for the common stock of Saltwater Expeditions Incorporated for the eight-year period from 2005 through 2012 was 21 percent. The one-year holding period returns from 2005 through 2011 are given below. What is the implied one-year holding period return for 2012?
Year 1-year holding
period return
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2006 22
2007 25
2008 20
2009 38
2010 25
2011 24
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a. 21.4%
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Q:
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b. $26.25
c. $30.25
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e. $28.25
Q:
A stock purchased for $52 paid a dividend of $1 six days after it was purchased. The stock was sold for $51 ninety days after it was purchased. What is the annualized rate of return? Assume the dividend was not reinvested.
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Q:
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a. True
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a. True
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a. True
b. False
Q:
Use the information below to solve for the earnings per share for Adobe.
52 Weeks Yld Vol Net
Hi Lo Stock Sym % PE 100s Hi Lo Close Chg
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Q:
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e. None of the above.
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a. True
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Q:
Temporary current assets are assets used specifically to finance particular projects in the firm's capital budget.
a. True
b. False
Q:
Net working capital is defined as
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b. current liabilities
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d. current assets minus current liabilities
Q:
The cash conversion cycle is the length of time from
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b. the payment of accrued wages to manufacture a product until the collection of accounts receivable associated with the sale of that product.
c. the payment for the purchase of raw materials to manufacture a product until the sale of that product.
d. the payment for the purchase of raw materials to manufacture a product until the collection of accounts receivable associated with the sale of that product.
Q:
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d. u2212$315,000 (bad debt losses would decline)
e. $0 (no change would occur)
Q:
Reston Inc. has expected sales of $17,000,000. While 10 percent of its customers pay cash, the remaining 90 percent pay on credit with 40 percent paying on Day 10, 30 percent paying on Day 20, 15 percent paying on Day 25, and 15 percent paying on Day 30. Assume that the cost of funds invested in receivables is 10 percent. Suppose that the firm's customers begin paying later, such that the new DSO increases to 24 days, that the firm uses a 360-day year, and that the firm's variable cost ratio is 80 percent. What is the additional interest cost to Reston of the additional investment in A/R caused by the delay in payment by its customers? a. $19,550 b. $24,438 c. $42,500 d. $78,625 e. $102,000
Q:
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Q:
A firm purchases raw materials on June 1st. It converts the raw materials into inventory by the last day of the month, June 30th. However, it pays for the materials on June 15th. On July 31st, it sells the finished goods inventory. Then the firm collects cash from the sale one month later on August 31st. If this sequence accurately represents the firm's average working capital cycle, what is the firm's cash conversion cycle in days?
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c. 26.1%
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