1. Mike Carlson will receive $12,000 a year from the end of the third year to the end of the 12th year (10 payments). The discount rate is 10%. The present value today of this deferred annuity is ____. (Please Explain Work Done To Get Answer)
A. $61,450
B. $42,185
C. $60,909
D. $55,379
2. To save for her newborn son's college education, Lea Wilson will invest $1,000 at the end of each year for the next 20 years. The interest rate if 10%. What is the future value? (Please Explain Work Done To Get Answer)
A. $8,514
B. $2,980
C. $63,440
D. $57,275
3. Price Corp. is considering selling to a group of new customers and creating new annual sales of $90,000. Five percent will be uncollectible. The collection cost on all accounts is 3% of new sales, the cost of producing and selling is 80% of sales, and the firm is in the 30% tax bracket. What is the profit on new sales? (Please Explain Work To Get Answer)
A. $7,560
B. $9,660
C. $7,245
D. $10,710