You are going to pay $800 into an account at the beginning of each of 20 years. The account will
then be left to compound for an additional 20 years until the end of year 40, when it will turn into a
perpetuity.
You will receive the first payment from the perpetuity at the end of the 41st year. If the
account pays 14%, how much will you receive from the perpetuity each year (rounded to nearest
$1,000)?
A) $150,000 B) $160,000 C) $170,000 D) $140,000
B
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Brandy made and sold decorative floral arrangements. For each arrangement, she purchased a container in which to hold the arrangement, silk flowers, and ribbon, which averaged $30 per arrangement. It took her about one hour to complete each and she set her hourly rate at $20/hour. This makes $50 her ____________________.
a. Variable costs b. Fixed costs c. Economies of scale d. Breakeven
Which of the following would NOT be discharged in a bankruptcy?
A) a student loan taken out three years ago B) debt on a bank guarantee C) credit card debts under $10,000 D) bank loans E) loans from a non-arm's length party