The Following Problem Requires Some of the Following Present Value

question 44

Essay

The following problem requires some of the following present value information:
$\begin{array} { | l | l| } \hline \text { PV af an arthary annuity for } 20 \text { periods at } 12 \% & 7.46944 \\\hline \text { PV af an ardinary annuty for } 19 \text { periods at } 12 \% & 8.36497 .36578 \\\hline \text { PV af an arthary annuty for } 18 \text { periods at } 10 \% 12 \% & 8.20147 .24967 \\\hline \text { PV af } 1 \text { for } 20 \text { periods at } 10 \% 12 \% & 0.10367\\\hline\end{array}$
Bioco sold a patent on a new laser process to Agent Co.The sales agreement,which was signed on January 1,2011,requires Agent Co.to pay Bioco $2 million immediately.In addition,Agent is required to pay 500,000 each December 31 for 20 years starting with December 31,2011.Agent and Bioco estimate that 12 percent is an appropriate interest rate for this arrangement.
Required:
a.Compute the present value of the receivable on Bioco's books on January 1,2011 immediately after receiving the $1 million down payment.
b.Compute the present value of the receivable on Biotech's books on December 31,2011.
c.Compute the present value of the receivable on Biotech's books on December 31,2012.

Estimate employer payroll taxes based on given tax rates and payroll data.

Understand the classification and reporting of current liabilities on the balance sheet.

Calculate and journalize estimated expenses associated with gift card issuance and redemption.

Calculate, journalize, and understand product warranty liabilities and their impact on financial statements.

---

Definitions:

Effect Size Statistic

A quantitative measure of the magnitude of a phenomenon or the strength of the relationship between variables in statistical research.

Independent Variable

A variable that is intentionally changed by the researcher to examine its impact on the dependent variable.

Type I Error

A statistical error that occurs when a true null hypothesis is incorrectly rejected, falsely indicating a significant effect.

Type II Error

The mistake of failing to reject a null hypothesis when it is actually false, leading to a false negative conclusion.