26. You have received a settlement from an insurance company which will pay you $100,000 per year for 12 years at the end of each year and J.G. Wentworth wants to buy your annuity. What is JG Wentworth's annual rate of return (interest rate) if they are willing to pay you $500,000 today? A. 7.56% B. 18.21% C. 16.94% D. Interest rate cannot be calculated. 27. The Merrymount Company has budgeted sales of $400,000 and budgeted cash receipts of $380,000 for the month of July. The company sells beach bags for $40 each. The Company has also budgeted inventory purchases of 10,500 units at a cost of $20 each. If the company incurred $125,000 of selling and administrative expenses during July, what is the company's budgeted operating income for the month of July? A. $75,000 B. $65,000 C. $45,000 D. None of the above 12
26. You have received a settlement from an insurance company which will pay you $100,000 per year for 12 years at the end of each year and J.G. Wentworth wants to buy your annuity. What is JG Wentworth's annual rate of return (interest rate) if they are willing to pay you $500,000 today? A. 7.56% B. 18.21% C. 16.94% D. Interest rate cannot be calculated. 27. The Merrymount Company has budgeted sales of $400,000 and budgeted cash receipts of $380,000 for the month of July. The company sells beach bags for $40 each. The Company has also budgeted inventory purchases of 10,500 units at a cost of $20 each. If the company incurred $125,000 of selling and administrative expenses during July, what is the company's budgeted operating income for the month of July? A. $75,000 B. $65,000 C. $45,000 D. None of the above 12
Chapter11: Capital Budgeting Decisions
Section: Chapter Questions
Problem 3PA: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...
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Please do 26, 27
Transcribed Image Text:26. You have received a settlement from an insurance company which will pay you $100,000 per year
for 12 years at the end of each year and J.G. Wentworth wants to buy your annuity. What is JG
Wentworth's annual rate of return (interest rate) if they are willing to pay you $500,000 today?
A. 7.56%
B. 18.21%
C. 16.94%
D. Interest rate cannot be calculated.
27. The Merrymount Company has budgeted sales of $400,000 and budgeted cash receipts of $380,000
for the month of July. The company sells beach bags for $40 each. The Company has also budgeted
inventory purchases of 10,500 units at a cost of $20 each. If the company incurred $125,000 of selling
and administrative expenses during July, what is the company's budgeted operating income for the
month of July?
A. $75,000
B. $65,000
C. $45,000
D. None of the above
12
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