6.A friend who owns an annuity that will pay $5,000 at the end of each year, in perpetuity, comes to you and offers to sell you all of the payments to be received after the 20th year for $12,000. At a discount rate of 8%, should you pay $12,000 today to receive payments on to infinity? What is the present value today of the annuity payments after the 20th yea
7. Use the following information to calculate the cash flow from assets, cash flow to creditors, and cash flow to stockholders. Show the cash flow identity.
2004 2005
Accounts payable $ 8,401 $ 12,300
Accounts receivable 9,815 10,400
Cash 1,412 212
Cost of goods sold 1,641,000 1,812,000
Depreciation 215,412 219,500
Dividends 120,000 200,000
Interest 23,000 19,000
Inventory 14,720 16,400
Long-term debt 314,000 214,000
Net fixed assets 926,500 1,017,000
Other expenses 215,000 214,000
Pre-paid expenses 541 1,400
Sales 2,414,000 2,719,000
Shareholders equity 614,947 800,612
Short-term notes payable 15,640 18,500
The tax rate for this firm is 43.5%.