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X-treme Vitamin Company is considering two investments, both of which cost $20,000. The cash flows are as follows:
Year | Project A | Project B | ||||
1 | $ | 23,000 | $ | 20,000 | ||
2 | 10,000 | 9,000 | ||||
3 | 10,000 | 15,000 | ||||
Use Appendix B for an approximate answer but calculate your final answer using the formula and financial calculator methods.
a-1. Calculate the payback period for Project A and Project B. (Round your answers to 2 decimal places.)
project A 0.87 years project B 1 year
b-1. Calculate the
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- TABLE 9C.2 Present Value of Annuity of $1, p = [1-1/(1+]/i 3.25% 3.5% 1 2 3 4 5 6 7 6.5982 6.5346 8 7.4859 7.4051 7.4051 7.3255 7.2472 9 8.3605 8.2605 8.1622 8.0657 9.2222 9.1012 8.9826 8.8662 10 11 12 13 14 15 Periods 1.5% 1.75% 2% 2.25% 2.5% 2.75% 3% 0.9852 0.9828 0.9804 0.9780 0.9756 0.9732 0.9709 0.9685 0.9662 1.9559 1.9487 1.9416 1.9345 1.9274 1.9204 1.9135 1.9066 1.8997 2.9122 2.8980 2.8839 2.8699 2.8560 2.8423 2.8286 2.8151 2.8016 3.8544 3.8309 3.8077 3.7847 3.7620 3.7394 3.7171 3.6950 3.6731 4.7826 4.7479 4.7135 4.6795 4.6458 4.6126 4.5797 4.5472 4.5151 5.6972 5.6490 5.6014 5.5545 5.5081 5.4624 5.4172 5.3726 5.3286 6.4720 6.4102 6.3494 6.2894 6.2303 6.1720 6.1145 7.1701 7.0943 7.0197 6.9462 6.8740 7.9709 7.8777 7.7861 7.6961 7.6077 8.7521 8.6401 8.5302 8.4224 8.3166 10.0711 9.9275 9.7868 9.6491 9.5142 9.3821 9.2526 9.1258 9.0016 10.9075 10.7395 10.5753 10.4148 10.2578 10.1042 9.9540 9.8071 9.6633 11.7315 11.5376 11.3484 11.1636 10.9832 10.8070 10.6350 10.4669 10.3027 12.5434…Present and future value tables of $1 at 9% are presented below. N 2 3 4 FV $1 PV $1 1.09000 0.91743 1.0000 1.0900 1.00000 1.18810 0.84168 2.0900 2.2781 1.91743 1.29503 0.77218 3.2781 3.5731 2.75911 1.41158 0.70843 4.5731 4.9847 3.53129 1.53862 0.64993 5.9847 6.5233 4.23972 6 1.67710 0.59627 7.5233 8.2004 4.88965 You want to invest $7800 annually beginning now in order to accumulate $38,140 for a down payment on a house. If can invest at an interest rate of 9% compounded annually, about how many years will it take to accumulate the requir amount? сл Select one: FVA $1 A. 2 years. B. 6 years. C. 3 years. D. 7 years. FVAD $1 PVA $1 PVAD $1 0.91743 1.75911 2.53129 3.23972 3.88965 4.48592Shuttle Company issued $1,000,000, three-year, 10 percent bonds on January 1, year 1. The bond interest is paid each December 31, the end of the company's fiscal year. The bond was sold to yield 9 percent. Use Table 9C.1, Table 9C.2. (Round time value factor to 4 decimal places.) Required: 1. Complete a bond payment schedule. Use the effective-interest amortization method. (Make sure that the unamortized discount/premium equals to '0' and the Net Liability equals to face value of the bond in the last period. Interest expense in the last period should be calculated as Cash Interest (+) discount / (−) premium amortized. Round intermediate and final answers to the nearest whole dollar.) Date 1/1/year 1 12/31/year 1 12/31/year 2 12/31/year 3 Interest expense Bonds payable Interest payment Issuance of bonds Payment of bonds Bond Payment Schedule Interest Expense Cash Payment $ 100,000 100,000 100,000 Amortization of Premium 2. What amounts will be reported on the financial statements…
- Jiz Saved Help Save Moates Corporation has provided the following data concerning an investment project that it is considering: $ 400,000 $ 130,000 per year Initial investment Annual cash flow Expected life of the project 4 years Discount rate 9% Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. The net present value of the project is closest to: (Round your intermediate calculations and final answer to the nearest whole dollar amount.) Multiple Choice $400,000 $71070 ... Prev 1 of 5 Next > to search JerCarter Company is considering a project with an initial investment of $600,500 that is expected to produce cash inflows of $131,000 for ten years. Carter's required rate of return is 16%. E (Click on the icon to view Present Value of $1 table.) (Click on the icon to view Present Value of Ordinary Annuity of $1 table.) 14. What is the NPV of the project? 15. What is the IRR of the project? Is this an acceptable project for Carter? 16. 14. What is the NPV of the project? (Enter the factor amount to three decimal places, X.XXX. Round the present value of the annuity to the nearest whole dollar. Use parentheses or a minus sign for a negative net present value.) Annuity PV Factor (i=16%, n=10) Net Cash Present Years Inflow Value 1- 10 Present value of annuity Investment Net present valueCurrent Attempt in Progress Michael is planning for his retirement this year. One option that has been presented to him is the purchase of an annuity that would provide a $38,000 payment each year for the next years. Click here to view the factor table. Calculate how much Michael should be willing to pay for the annuity if he can invest his funds at 7%. (For calculation purposes, use 4 decimal places as displayed in the factor table provided and round final answer to O decimal place, e.g. 58,971.) Payment $ eTextbook and Media Save for Later Attempts: 0 of 3 used Submit Answer
- Present and future values of $1 at 3% are presented below: N FV $1 PV $1 FVA $1 PVA $1 FVAD $1 PVAD $1 1 1.03000 0.97087 1.0000 0.97087 1.0300 1.00000 2 1.06090 0.94260 2.0300 1.91347 2.0909 1.97087 3 1.09273 0.91514 3.0909 2.82861 3.1836 2.91347 4 1.12551 0.88849 4.1836 3.71710 4.3091 3.82861 5 1.15927 0.86261 5.3091 4.57971 5.4684 4.71710 6 1.19405 0.83748 6.4684 5.41719 6.6625 5.57971 7 1.22987 0.81309 7.6625 6.23028 7.8923 6.41719 8 1.26677 0.78941 8.8923 7.01969 9.1591 7.23028 9 1.30477 0.76642 10.1591 7.78611 10.4639 8.01969 10 1.34392 0.74409 11.4639 8.53020 11.8078 8.78611 11 1.38423 0.72242 12.8078 9.25262 13.1920 9.53020 12 1.42576 0.70138 14.1920 9.95400 14.6178 10.25262 13 1.46853 0.68095 15.6178 10.63496 16.0863 10.95400 14 1.51259 0.66112 17.0863 11.29607 17.5989 11.63496 15 1.55797 0.64186 18.5989 11.93794 19.1569 12.29607 16 1.60471 0.62317 20.1569 12.56110 20.7616 12.93794 Debbie has $368,882 accumulated in a 401K plan. The fund…Present and future values of $1 at 3% are presented below: N FV $1 PV $1 FVA $1 PVA $1 FVAD $1 PVAD $1 1 1.03000 0.97087 1.0000 0.97087 1.0300 1.00000 2 1.06090 0.94260 2.0300 1.91347 2.0909 1.97087 3 1.09273 0.91514 3.0909 2.82861 3.1836 2.91347 4 1.12551 0.88849 4.1836 3.71710 4.3091 3.82861 5 1.15927 0.86261 5.3091 4.57971 5.4684 4.71710 6 1.19405 0.83748 6.4684 5.41719 6.6625 5.57971 7 1.22987 0.81309 7.6625 6.23028 7.8923 6.41719 8 1.26677 0.78941 8.8923 7.01969 9.1591 7.23028 9 1.30477 0.76642 10.1591 7.78611 10.4639 8.01969 10 1.34392 0.74409 11.4639 8.53020 11.8078 8.78611 11 1.38423 0.72242 12.8078 9.25262 13.1920 9.53020 12 1.42576 0.70138 14.1920 9.95400 14.6178 10.25262 13 1.46853 0.68095 15.6178 10.63496 16.0863 10.95400 14 1.51259 0.66112 17.0863 11.29607 17.5989 11.63496 15 1.55797 0.64186 18.5989 11.93794 19.1569 12.29607 16 1.60471 0.62317 20.1569 12.56110 20.7616 12.93794 Rosie's Florist borrows $300,000 to be paid off in six…A 12-cylinder heavy-duty diesel engine will have a guaranteed residual value of $1,000 in five years. Today (year 0) the equivalent worth of this engine is how much if the interest rate is 9% per year? Click the icon to view the interest and annuity table for discrete compounding when i = 9% per year. Today (year 0) the equivalent worth of this engine is $ (Round to the nearest cent.)
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