Period/Rate 10 11 12 13 Knowledge Check 01 Clean Tel, Incorporated is considering investing in an 11-year project with annual cash inflows of $1,000,000. These cash inflows have an initial investment of $7,139,000. At what discount rate would this present value be the same as the initial investment? 6% -7% Present Value of Ordinary Annuity 7% 5% 6% 8% 9% 7.7217 7.3601 7.0236 6.7101 6.4177 7.8869 7.4987 7.1390 6.8052 8.3838 7.9427 7.5361 7.1607 8.8527 8.3577 7.9038 7.4869 8.3064 8.8633 9.3936 Ⓒ9% 8%

Period/Rate 10 11 12 13 Knowledge Check 01 Clean Tel, Incorporated is considering investing in an 11-year project with annual cash inflows of $1,000,000. These cash inflows have an initial investment of $7,139,000. At what discount rate would this present value be the same as the initial investment? 6% -7% Present Value of Ordinary Annuity 7% 5% 6% 8% 9% 7.7217 7.3601 7.0236 6.7101 6.4177 7.8869 7.4987 7.1390 6.8052 8.3838 7.9427 7.5361 7.1607 8.8527 8.3577 7.9038 7.4869 8.3064 8.8633 9.3936 Ⓒ9% 8%

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

ChapterA3: Time Value Of Money

Section: Chapter Questions

Problem 16E

See similar textbooks

Similar questions

QUESTION 42 Compute the missing variable for each of the following alternatives of investments to accumulate $1,000,000. for 30 years @ 6% annual interest rate: Following are appropriate factors from tables: Table % / n Present Value of annuity due $1 Present Value of ordinary annuity of $1 Present value of $1 Future Value of ordinary annuity of $1 6%/30 12.15812 13.76483 .17411 79.05819 $????????? invested annually at the end of the year. Required Computations: $12,648.91 $72,648.92 $33,3333.33 $11,927.43
Homework, Chapter 26 Net Present Value A project has estimated annual net cash flows of $12,500 for four years and is estimated to cost $47,500. Assume a minimum acceptable rate of return of 12%. Use the Present Value of an Annuity of $1 at Compound Interest table below. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 Determine (a) the net present value of the project and (b) the present value index. If required, use the minus sign to indicate a negative net present value. Net present value of the project (round to the nearest dollar) Present value index (rounded to two decimal places)
sd subject-Accounting You are considering an investment that will pay $24668 in 20 years. If the interest rate is 13.79%, what is the most you should be willing to invest today? (Round to 2 decimal places.)
Assignment 3 Ch.5 Name / ID/ Section / Q1/ Ipswich Corporation is investment opportunity with the expected net cash inflows of $300,000 for four years. The residual value of the investment, at the end of four years, would be $70,000. The company uses a discount rate of 14%, and the initial investment is $290,000. Calculate the NPV of the investment. considering an Present value of an ordinary annuity of $1: 12% 13% 14% 15% 0.893 0.885 0.877 0.87 1.69 1.668 1.647 1.626 2.402 2.361 .322 2.283 3.037 2.974 2.914 2.855 Present value of $1: 12% 13% 14% 15% 0.893 0.885 0.877 0.87 Q2/ A company is evaluating an investment. The company uses the straight-line method of depreciation. Use the following information to compute the accounting rate of return. Show your calculations and round to one decimal place. Project SR875,000 Investment Residual value Operating income Year I 120,000 Year 2 120,000 Year 3 120,000 Year 4 120,000 Year S Q3/ Your grandfather would like to share some of his fortune…
Year 0123 Cash Flow -$ 27,000 11,000 14,000 10,000 The appropriate discount rate is 16 percent. What is the IRR for this project? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) IRR % Should the firm accept the project? O Reject O Accept
QUESTION 41 Compute the missing variable for each of the following alternatives of investments to accumulate $1,000,000. for 30 years @ 6% annual interest rate: Following are appropriate factors from tables: Table % / n Present Value of annuity due $1 Present Value of ordinary annuity of $1 Present value of $1 Future Value of ordinary annuity of $1 6%/30 12.15812 13.76483 .17411 79.05819 One single deposit of $???????? for 30 years. Required Computations: $166,666.66 $174,110 $175,933.83 $126,489
nt question Q1. Find the present value of 30 annual payments of $2,000 per annum where the first payment is made 14 years from now. So there are 30 annual payments from t=14 to t=43 inclusive. The discount rate is 5% pa. The present value of these payments is: Question 8Select one: a. $4,908.18 b. $16,304.68 c. $21,212.85 d. $30,282.15 e. $30,744.9
QUESTION 42 Compute the missing variable for each of the following alternatives of investments to accumulate $1,000,000. for 30 years @ 6% annual interest rate: Following are appropriate factors from tables: Table % / n Present Value of annuity due $1 6%/30 12.15812 $33,3333.33 O $72,648.92 Present Value of ordinary annuity of $1 13.76483 Present value of $1 .17411 $????????? invested annually at the end of the year. Required Computations: O $12,648.91 O $11,927.43 Future Value of ordinary annuity of $1 79.05819
Homework, Chapter 26 Internal Rate of Return A project is estimated to cost $352,755 and provide annual net cash flows of $81,000 for six years. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 0.943 0.909 0.893 0.870 0.833 1.833 1.736 1.690 1.626 1.528 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 Determine the internal rate of return for this project, using the Present Value of an Annuity of $1 at Compound Interest table shown above. %
esc 1 i Sophie has already saved $14,150 in her RRSP today and she plans to continue to add on equal deposits at the end of every year for the next 7 years. What annual payment is required to accumulate $70,000 in total at the end of the 7 years if the nominal rate of return on the investment is 6.33% compounded semi-annually? Enter the future value as a positive value in the FV box below. Enter PV and PMT as positive or negative values based on FV being positive. Report PMT accurate to the nearest cent. P/Y = C/Y= N= I/Y= PV = $ PMT = $ FV = $ The size of each annual payment required is (enter a positive value) $ Submit Question ! 1 Q A 6² F1 @ 2 20 F2 W # 3 E 80 F3 $ 4 a F4 R % 5 e F5 T A 6 si Y & 1 7 8: F7 U * 00 8 DI FE
QUESTION 1 Investment A will make N annual payments of $300.00 with the first of the N payments due immediately. Investment A has a value of $20000.00. Investment B is an ordinary annuity that will make (N minus 1) annual payments of $300.00 with the first payment due in one year from today. If investment A and investment B have the same expected return, then what is the value of investment B? O $19700.80(plus or minus $0.10) O $19700.00(plus or minus $0.10) O $19701.70(plus or minus $0.10) O $19701.10(plus or minus $0.10) O None of the above is within $0.10 of the correct answer
Problem 06.027 AW of a Permanent Investment How much must you deposit each year into your retirement account starting now and continuing through year 10 if you want to be able to withdraw $85,000 per year forever, beginning 30 years from now? Assume the account earns interest at 10% per year. The amount to be deposited is determined to be $ 20,562.41