Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. hi all, can someone please answer this question. p

Hi all, Can someone please answer this question. Please, list all steps. Thanks! Mr. Art Deco will be paid...

50.1K

Verified Solution

Question

Finance

Hi all,

Can someone please answer this question. Please, list all steps.Thanks!

Mr. Art Deco will bepaid $150,000 one year hence. This is a nominal flow, which hediscounts at a nominal discount rate of 8%.

PV = $150,000 / (1 +.08) = $138,889

The inflation rate is5%.

  

Calculate the PV ofMr. Deco’s payment using the equivalent real cash flow andreal discount rate. (You should get exactly the sameanswer as he did.) (Do not round intermediate calculations.Round your "Real cash flow" and "Present value" answers to thenearest whole dollar amount. Enter the "Real discount rate" as apercent rounded to 3 decimal places.)

  

Real cashflow$
Real discountrate%
Presentvalue$

Answer & Explanation Solved by verified expert
3.8 Ratings (712 Votes)
    See Answer
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Transcribed Image Text

Hi all,Can someone please answer this question. Please, list all steps.Thanks!Mr. Art Deco will bepaid $150,000 one year hence. This is a nominal flow, which hediscounts at a nominal discount rate of 8%.PV = $150,000 / (1 +.08) = $138,889The inflation rate is5%.  Calculate the PV ofMr. Deco’s payment using the equivalent real cash flow andreal discount rate. (You should get exactly the sameanswer as he did.) (Do not round intermediate calculations.Round your "Real cash flow" and "Present value" answers to thenearest whole dollar amount. Enter the "Real discount rate" as apercent rounded to 3 decimal places.)  Real cashflow$Real discountrate%Presentvalue$

Other questions asked by students

Q

Review the claims of the Atkins diet from the Atkins website. Applying what was presented in...

Biology
Q

Show all work. Label and clearly explain your answer. This is very important. 1) You must...

Finance
Q

\"Here we report results of a field experiment in which the number of plant species was...

Biology
Q

A. The most commonly used single-subject designs are the ABAB design and the multiple-baseline design. Describe...

Psychology
Q

E field of a uniform and planar distribution of charge A uniform surface charge density of...

Physics
Q

Professional values are intrinsic to socail work. What personal experience demonstrates you awareness of and sensitivity...

Psychology
Q

Maximum 15 120 28 Displacement between maximum potential energy position and maximum kinetic energy position...

Physics
Q

16 m KLY x 33 m KLM 180 and m YLM x 157 Find m...

Geometry
Q

6 DETAILS Use an Addition or Subtraction Formula to write the expression as a trigonometric...

Basic Math
Q

Simplify 2 27 2 12 Provide your answer below

Algebra
Q

W Inc. accepted a three-year noninterest-bearing note for $750,000 on January 1, 2021. The note...

Accounting
Q

How do states ensure auditors "...possess the required skills to evaluate the accounting entries"

Accounting