Aunt Is About to Retire, and She Wants to Sell

question 69

Multiple Choice

aunt is about to retire, and she wants to sell some of her stock and buy an annuity that will provide her with income of $50,000 per year for 30 years, beginning a year from today.The going rate on such annuities is 7.25%.How much would it cost her to buy such an annuity today?

• A)$574,924
• B)$605,183
• C)$635,442
• D)$667,214
• E)$700,575

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Definitions:

Business Combination

A transaction or event in which an acquirer gains control over one or more businesses, often involving mergers, acquisitions, or consolidations.

Impairment

A decrease in the recoverable amount of an asset to below its carrying amount on the balance sheet, resulting in a charge to the company's earnings.

Cash-Generating Units

The smallest identifiable group of assets that generates cash inflows independently of other assets or groups of assets.

Business Combination

A transaction or event in which a buyer obtains control of one or more businesses.