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School

University of Texas *

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Course

310F

Subject

Finance

Date

Apr 24, 2024

Type

jpeg

Pages

1

Uploaded by SuperHumanApeMaster385 on coursehero.com

Once you have completed the assignment below, you must submit your answers using the answer sheet provided in Canvas; not all answers will be tumed in. Once submitted, your answers cannot be changed, but where appropriate, partial credit will be given. For future reference, you should keep a copy of your answers (outside of Canvas) as they’ will not be available to view given the nature of the grading process. For all time value of money calculations, use time value of money factors with at least four decimal places and then round your final answer (but not intermediate steps) to the nearest whole dollar. Required: answer each of the following questions. which are ing' ependent from each other. 1. CSW Real Estate, Inc. is considerin g two sites for its latest project, a mixed-use residential and retail shopping development. The company's man agement has put together the following cash flow estimates and other data for each project: Site 1 Site 2 Leander : Hutto Land and construction costs $5,000,000 $6,500,000 Annual cash inflows 680,000 715,000 Annual cash outflows 102,000 130,000 Estimated useful life (in years) 25 20 Interest rate 8% 10% What is the cash payback period for each site (rounded to two decimal places)? What is the net present value (NPV) of each site and which site (if any) would be the preferred investment? 2. You recently received a birthday gift of $600 and you decide to save it for later use. If you deposit it into an investment account that pays six percent interest, how much will be in the account in two years? 3. You have recently opened a retirement account and decided to deposit $3,500 a year in the account. If you want to retire in forty-five years and the account eams eight percent interest, how much will you have in your account when you retire? 4. The Jackson Company borrowed $50,000 from a local bank on January 1, 2024 at an interest rate of eight percent that will be repaid in full at the end of the three-year term. Prepare all of the transactions the company would record in a tabular analysis related to the loan. S. If you are able to earn four percent interest, what amount would you need to invest to have $1,950 two years from now? 6 You plan to finance the purchase of a new house with a bank loan of $425,000; the terms of the loan include an interest rate of four percent and a thirty-year term. What would your annual mortgage payment be? How much inlerest will you pay over the life of the loan?
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