What would you pay for an investment

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Q1. What would you pay for an investment that pays you $41000 at the beginning of each year for the next ten years? Assume that the relevant interest rate for this type of investment is 11%.

Q2. Gary won a lottery that will pay him $650000 at the end of each of the next twenty years. Assuming an appropriate interest rate is 9% compounded annually, what is the present value of this amount?

Q3. Find the present value of an investment in plant and equipment if it is expected to provide annual earnings of $71000 for 15 years and to have a resale value of $131000 at the end of that period. Assume a 12% rate and earnings at year end. The present value of 1 at 12% for 15 periods is 0.18270. The present value of an ordinary annuity at 12% for 15 periods is 6.81086. The future value of 1 at 12% for 15 periods is 5.47357.

Q4. Concord Corporation sold $113000 of goods and accepted the customer's $113000 11%, 1-year note receivable in exchange. Assuming 11% approximates the market rate of return, what would be the debit in this journal entry to record the sale?

Q5. Concord Corporation had a 1/1/20 balance in the Allowance for Doubtful Accounts of $30500. During 2020, it wrote off $22500 of accounts and collected $5890 on accounts previously written off. The balance in Accounts Receivable was $640000 at 1/1 and $740000 at 12/31. At 12/31/20, Concord estimates that 6% of accounts receivable will prove to be uncollectible. What is Bad Debt Expense for 2020?

Reference no: EM133185932

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