a. An investment of $10,000 made now will, 10 years from now, result in a receipt of $23,674? b. An investment of $2,000 made 18 years ago has increased in value to $15,380? c. An investment of $2,500 made now will, 5 years from now, result in a receipt of $4,212?

a. An investment of $10,000 made now will, 10 years from now, result in a receipt of $23,674? b. An investment of $2,000 made 18 years ago has increased in value to $15,380? c. An investment of $2,500 made now will, 5 years from now, result in a receipt of $4,212?

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 15PROB

See similar textbooks

Related questions

Q: a computer is purchased for P35,000, it is expected to be used for six years and will be sold for…

A: Purchase cost = P 35000 Annual cost = P 10,000 Salvage value = P 5000 Period = 6 Years Rate of…

Q: An investment of $100,000 resulted in income of $25,000 per year for 10 years. The rate of…

A: Investment = $ 100,000 Annual income = $ 25,000 Period = 10 Years

Q: An asset is purchased for 240 000 It is expected to provide an additional 56 000 of annual net cash…

A: A method of capital budgeting that helps to evaluate the present worth of cash flow and a series of…

Q: company projects an increase in net income of $157500 each year for the next five years if it…

A: Average investment = (Initial investment+ salvage value)/2 = (900000+300000)/2 = $600000

Q: [3] On January 1, a company invested in an asset with a useful life of 3 years. The company’s…

A: Solution: PV of Cash inflows = ($8,000*0.91) + ($9,000*0.83) + ($10,000*0.75) = $7,280 + $7,470 +…

Q: An investment in Machinery will yield annual cash earnings of P 12,000. The investment can be…

A: Given, Payback period = 4 years Annual cash earnings = P12,000 First of all, from the payback period…

Q: Compute the equivalent annual cost to own equipment with an initial investment of $54,000, yearly…

A: Equivalent annual cost (EAC) is the total annual cost of owning, operating, and maintaining an asset…

Q: PhP 20,000.00 was invested at simple interest, part at 11% for two years and the rest at 8% for…

A: Time value of money :— According to this concept, value of money in present day is more than the…

Q: An investment of $100,000 resulted in income of $25,000 per year for 10 years. The rate of…

A: Since this is called an investment which is giving annual return, we assume that after 10 years, the…

Q: On January 1, a company invested in an asset with a useful life of 3 years. The company’s expected…

A: Let CFn be the cashflow in year n. CF1 = $8000 CF2 = $9000 CF3 = $10000 r = 10% Present value factor…

Q: Minal Enterprise invests RM10000 now, RM 5000 two years from now and RM 3000 five years from now. a)…

A: Note: We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: 29) The capitalized cost of an initial investment of $200,000 and annual investments of $30,000…

A: Since you have asked multiple questions, we will solve one question for you (question no.29 as the…

Q: A property was purchased 5 years ago for $1mil and provided NOI of $70,000 in Year 1, increasing at…

A: Purchase price of the property five years ago (P0) = $1,000,000 NOI for year 1 (NOI1) = $70,000 NOI…

Q: An investment of $100,000 resulted in income of $25,000 per year for 10 years. The rate of…

A: The rate of return earned can be calculated with the help of RATE function of Excel The RATE…

Q: If Uptown Clinic invested $3,000 in excess cash today, what would be the value of its investment at…

A: Formula: Future value = Present value ( 1+Rate)^years

Q: Asset A was purchased six months ago for $25,000 and has generated $1,500 cash flow during that…

A: In this question we need to find out the Holding period return for Asset A from the below…

Q: The annual worth for years 1 through infinity of $50,000 now, $10,000 per year in years 1 through…

A: Computation:

Q: Cullumber Company earns 8% on an investment that pays back $96,800 at the end of each of the next 10…

A: The present value of investment can be calculated using the below excel formula:

Q: sh of Php 50,000 invested today will realized an annual cash returns for five (5) years at 8% rate…

A: The given problem can be solved using PMT function in excel. PMT function computes savings/…

Q: Precision Engineering invested $95,000 at 5.5 percent interest, compounded annually for 2 years. How…

A: According to the time value of money concept, the money available today has some different…

Q: 3. An asset costs $150,000 and has a salvage value of $15,000 after 10 years. What is the…

A: Higher depreciation in earlier years in sum of years digit method. Same depreciation in straight…

Q: What is the present worth of a project with an initial investment of $8,000 and a net annual income…

A: Present Value Present value is the present worth of any sum of a money to be received in the future…

Q: A company has purchased an asset for $188,341. If they require a return of 12.78%, how much must…

A: Value of asset after 6 years will be calculated using Future Value formula. Future value = Present…

Q: Profits generated by a Machine Prime Inc. were 100 M for the first year and increased by 10 M each…

A: In the given question, Profit of P 100 million is generated at the end of first year. This amount…

Q: The data required for a new investment are calculated as follows: Cost of the investment: 10.000.000…

A: Depreciation = Cost of investment / Economic life

Q: Inco purchased a computer for $200,000, and this machine is expected to generate annual cash flows…

A: Using excel IRR function

Q: A company purchases an asset for P 10,000.00 and plans to keep it for 20 years. If the salvage value…

A: Cost of asset = P 10,000 Life of asset = 20 Years Salvage value = 0 Sum of year digits = [Life of…

Q: If an asset costs $26,280 and is expected to have a salvage value of $3,104 at the end of five year…

A: Cost = $ 26280 Salvage value = $ 3104 Period = 5 Years Annual cash inflow = $ 5675

Q: a The value of an investment account has a doubling time of 13 years and $35,000 was originally…

A: As per Bartleby Honor Code, when multiple questions are asked, which are not linked with each other,…

Q: n equipment has a maintenance cost of P20,000 a year for two years, increased by P40,000 at the end…

A: In this we have to find out the present value and find out the semi annual payment for that.

Q: An asset was purchased for P66,000. The asset is expected to last for 6 years and will have a…

A: Net income = income before tax - tax = 7200- 7200*0.30 = 5040

Q: If an asset costs $70,950 and is expected to have a salvage value of $949 at the end of five year…

A: The salvage value means the value of machinery that remains after it completes its life. The payback…

Q: Complete the table to find the amount P that must be invested at rate r to obtain a balance of A =…

A: Given information: Total amount is $300,000 Interest rate ‘r’ is 7%

Q: Assume that a company purchased a new machine for $19,000 that has a salvage value of $3,000 at the…

A: Present value of cash inflow = Present value of annual cash inflow + Present value of residual value…

Q: 2. Morgan Stanley's wealth management unit offers to invest profits of $750,000 made by an artist on…

A: Given Principal (P)=$750,000 Interest rate (r)=7% compounded semi-annually (n) time (t)=3 years…

Q: nco purchased a computer for $200,000, and this machine is expected to generate annual cash flows of…

A: Using excel IRR function

Q: A company purchases an asset for P10,000 and plans to keep it for 20 years. If the salvage value is…

A: Depreciation: A depreciation is a non-cash expenses for the company. The depreciation expenses is…

Q: From Part A above, assume that the bank decided to give a loan of $ 59 million to Nivea Corporation…

A: Net present value (NPV) is the difference between the present values of cash inflows and cash…

Q: Investment in a crane is expected to produce profit from its rental of $15,000 during the first year…

A: present worth formula: present worth = future value1+rn where, r=rate n=number of years

Q: A company is considering an investment that requires an immediate investment of $500,000 and an…

A: The answer is given in the next sheet:

Q: The company buys an asset that costs $11,200 and returns net cash flow of $160 per month for 3…

A: NPV is the present value of cash inflows less present value of cash outflows. IRR is the discount…

Q: Six years ago, ABC Company invested $47,736 in a new machinery. The investment in net working…

A: The selling price for the machine is $17,745.The book value of the machine is $11,017.

Q: [3] On January 1, a company invested in an asset with a useful life of 3 years. The company's…

A: Total present value of Total Cash inflow from the asset = (Cash inflow from year 1 x PV factor) +…

Q: Please use excel and explain how you solved it step by step thank you How much income should an…

A: Here we will first of all have to compute the future value of the investment and then determine the…

Q: 1. A company purchases an asset for the P10,000 and plans to keep it for 20 years. If the salvage…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Question

What rate of interest compounded annually is involved if:

a. An investment of $10,000 made now will, 10 years from now, result in a
receipt of $23,674?
b. An investment of $2,000 made 18 years ago has increased in value to
$15,380?
c. An investment of $2,500 made now will, 5 years from now, result in a
receipt of $4,212?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

What is the returnon an investment that costs $1,000 and is soldafter 1 year for $1,060?
An investment pays $200 at the end of Year I. $250 at the beginning* of Year 2. $387 at the end of Year 4. and $500 at the beginning of Year 6. If other investments of equal Mk earn 7.5% annually. what will be this investments present value and future value?
What is the IRR for a $1500 investment that returns $300 at the end of each of the nexta.7 years?b. 6 years?c. 100 years?d. 2 years?
Assume that you are valuing an infinitely lived asset that pays $350 at the end of each year. What is the present value of the asset if the opportunity cost of funds is 3%?
What is the IRR for a $980 investment that returns $205 at the end of 6 years?
An investment will pay $600 at the end of each of the next 2 years, $700 at the end of Year 3, and $1,000 at the end of Year 4. What is its present value if other investments of equal risk earn 6 percent annually? a. $1,821.82 b. $1,913.83 c. $2,297.07 d. $2,479.86 e. $2,735.85
What is the simple payback period (in years) for an investment of $465,000 if the net annual income is $75,000? O a.7 O b.8 O c. 5 O d. 9 O e. 6
Assume that at the beginning of the year, you purchase an investment for $6,500 that pays $95 annual income. Also assume the investment's value has increased to $7,050 by the end of the year. a. What is the rate of return for this investment? Note: Input the amount as a positive value. Enter your answer as a percent rounded to 2 decimal places.
Consider an investment where $49,000 is invested for 10 years at 8% compounded continuously. a) How much will this investment be worth after 10 years? (Round your answer to the nearest cent.) $ _____ b) What is the total amount earned in compound interest? (Round your answer to the nearest cent.) $ _____
What is the present value (PV) of $300,000 received five years from now, assuming the interest rate is 9% per year? O A. $194,979 B. $243,724 C. $341,214 O D. $180,000
Assume that at the beginning of the year, you purchase an investment for $6,300 that pays $130 annual income. Also assume the investment's value has increased to $6,900 by the end of the year. a. What is the rate of return for this investment? Note: Input the amount as a positive value. Enter your answer as a percent rounded to 2 decimal places. Rate of return % b. Is the rate of return a positive or a negative number? Positive Negative
What is the present value if $200 to be received 8 years from now if money in hand can be invested at 12%? 80.78 or 90.78?