Handout 11 - Students

# Plaintiff alleges that the defendants formed an

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Unformatted text preview: ff alleges that the defendants formed an unlawful joint venture and drove it out of business. The case is expected to go to trial later this year. The likelihood of payment is reasonably possible. 2. Environmental Printing is the plaintiff in an \$8 million lawsuit filed against a competitor in the high-end color-printer market. Environmental Printing expects to win the case and be awarded between \$5.5 and \$8 million. 3. Environmental Printing recently became aware of a design flaw in one of its ink-jet printers. A product recall appears probable. Such an action would likely cost the company between \$400,000 and \$800,000. Requirement: 1. Determine if each event results in a contingency that should be recorded, and if so, record the transaction. Present Value of an Annuity Calculate the present value of the following annuities, assuming each payment is made at the end of each compounding period. # Annuity Payment Annual Rate 1 2 3 \$4,000 \$9,000 \$3,000 7% 8% 8% Interest Compounded Annually Semi-Annually Quarterly Period Invested 5 years 3 years 2 years 1.0% 0.99010 0.98030 0.97059 0.96098 0.95147 0.94205 0.93272 0.92348 0.91434 0.90529 0.89632 0.88745 0.87866 0.86996 0.86135 0.85282 0.84438 0.83602 0.82774 0.81954 1.5% 0.98522 0.97066 0.95632 0.94218 0.92826 0.91454 0.90103 0.88771 0.87459 0.86167 0.84893 0.83639 0.82403 0.81185 0.79985 0.78803 0.77639 0.76491 0.75361 0.74247 2.0% 0.98039 0.96117 0.94232 0.92385 0.90573 0.88797 0.87056 0.85349 0.83676 0.82035 0.80426 0.78849 0.77303 0.75788 0.74301 0.72845 0.71416 0.70016 0.68643 0.67297 2.5% 0.97561 0.95181 0.92860 0.90595 0.88385 0.86230 0.84127 0.82075 0.80073 0.78120 0.76214 0.74356 0.72542 0.70773 0.69047 0.67362 0.65720 0.64117 0.62553 0.61027 3.0% 0.97087 0.94260 0.91514 0.88849 0.86261 0.83748 0.81309 0.78941 0.76642 0.74409 0.72242 0.70138 0.68095 0.66112 0.64186 0.62317 0.60502 0.58739 0.57029 0.55368 n\i 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 1.0% 0.99010 1.97040 2.9...
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## This document was uploaded on 02/09/2014.

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