Congratulations! You are the proud winner of the multi-state Sour Ball Lottery. You are to receive
$2,000,000 at the end of each year for the next 20 years.
While the Lottery Commission refers to this
as a $40,000,000 jackpot, if you choose the "cash option" they will give you much less than that; you
can receive a lump sum payment today equal to the present value of the ordinary annuity instead
of the 20 annual payments. If the discount rate that the Lottery Commission uses to determine the
lump sum payoff is 7%, what is your payoff if you select the cash option?
A) $26,945,332 B) $42,977,401 C) $21,188,028 D) $39,707,503
C
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Orlov Corporation purchased 22,000 shares of Matsey Corporation common stock for $40 per share on January 1, 2009 . Matsey reported net income of $120,000 for 2009 and paid dividends of $45,000 during 2009 . As of December 31, 2009, the market value of Matsey Corporation common stock was $39 per share. Assuming the shares owned by Orlov represent 10 percent of the total outstanding stock of
Matsey, the year end adjustment entry in Orlov Corporation's books is: a. Cash 22,000 Dividend Income 22,000 b. Cash 22,000 Long-Term Investments 22,000 c. Unrealized Loss on Long-term Investments 22,000 Allowance to Adjust Long-Term Investments to Market 22,000 d. Loss on Long-Term Investments 22,000 Allowance to Adjust Long-Term Investments to Market 22,000
If a firm raises its product prices beyond reasonable levels, it will simply lose its market share.?
Answer the following statement true (T) or false (F)
Which of the following statements is true ofopen-end mutual funds?
A. Theyredeem old shares when investors want to cash in. B. Theyhave a fixed number of shares. C. Their shares are traded like stocks. D. They do not issue additional shares when demand increases.
Under the Second Restatement, which of the following is correct with regard to a contract entered into with a third person by an agent of an undisclosed principal?
A) The agent has no liability to the third person if the agent has acted within the scope of her authority. B) The agent is personally liable upon the contract unless the third person discovers the existence and identity of the principal and elects to hold the principal to the contract. C) Once the third person learns of the existence and identity of the principal, that third person may hold both the principal and the agent to the performance of the contract. D) If the third party obtains a judgment against the principal, the agent may still have liability to that third party.