To calculate the net present value, convert all future and repeated cash flows into present value. Given the following cash flows and an interest rate of 2%, calculate the net present value of the alternative. Round your answer to the nearest dollar.
Q: Suppose you want to realize a future value of $150,000 in 30 years on an investment you make. The…
A: Given - Future Value, (FV) - $150,000 No. of years, (n) = 30 The annual rate of return, (i) = 8.75%…
Q: What is the future value of your house after 30 years? Note. Use formula FV=PV(+r)" to find this…
A: Given Present value PV = 831,111.59 n= 30 years Annual growth rate for 30 years is 5% r = 5% We…
Q: You invested $100,000 in a project and received $40,000 at n = 1, $40,000 at n = 2, and $30,000 at n…
A: The data given is as follows:- Initial level of investment done = 100,000 Revenue generated in the…
Q: Your company wants to buy a new piece of machinery for $2.3 million. You will pay for 15% of the…
A: The weighted average cost of capital (WACC) of a company is the average cost of capital from all…
Q: What is the amount due on July 8, 2022, if the present value on July 31, 2021 was P24192 at 7.4%…
A: The Simple Interest (S.I.) formula is a way to figure out how much interest will accrue on a given…
Q: Assume that a medical device has a useful life of 10 years, and it loses its real value at a…
A: DISCLAIMER “Since you have asked multiple question, we will solve the first question for you as per…
Q: Suppose you purchased a corporate bond with a 10-year maturity, a $1,000 par value, a 9% coupon rate…
A: The given information: Interest payment is $45 Purchasing price is $1,000 Maturity period is 10…
Q: Bertrand is a worker in Canada with a continuous income stream at the rate of 650e dollars per year.…
A: Given, Income stream rate = 650et
Q: Ann decided to fund a hospital in perpetuity. The first payment is made today (t=0), which is…
A:
Q: An inflation-adjusted pension provides for continuous payments over the next 10 years at the rate of…
A: Inflation means a decline in the value of the currency in an economy. It means as the interest rate…
Q: Ex Ante and Ex Post Real Interest Rates
A: Ex-ante is when we look at the future event based on all the possible predictions whereas Ex post…
Q: 2. Using his credit card, a professional golfer bought a new golf set worth P30,000. The said golf…
A: Answer in step 2
Q: Cost component Alpha Beta Charlie development 100,000 immediately 150,000 year 1 10,000…
A:
Q: Compute the difference between the two modes of investment. Write the difference between the two…
A: Given: Mode 1: end-of-year deposit of P1,183 on the fırst year Increase each year=10% Number of…
Q: Jacob manages a cloth manufacturing firm. He is deciding whether or not to invest in new machinery.…
A: Net present value (NPV) is the difference between the present value of cash inflows and the present…
Q: You buy a $200,000 house using a 30-year mortgage. At the end of the 15th year you need to replace…
A: Equivalent annual cost refers that the annual cost of owning, operating, and maintaining an asset ,…
Q: Suppose that a printing firm considers its production as a continuous income stream. If the annual…
A: We are going to use concepts such as Present value and future value to answer this question.
Q: For their replacements, the company is putting up a sinking fund to earn 16% interest compounded…
A: For offer A: Using sinking fund method inn computing depreciation Annual Cost = (Co-Cn)i1+in-1+Co(i)…
Q: Lourdes has just retired and plans to consume $8,640 from the retirement account every year for the…
A: In economics, present value refers to the current value of a future stream of cash flows. Annuities…
Q: Calculate the present value on January 1, 20X0 of a perpetuity paying $1,000 at the end of each…
A: Present worth of a perpetuity equivalent to the occasional cash flow divided by the interest rate.…
Q: If you borrow $5,500 to buy a car at 12% compounded monthly, to be repaid over the next four years,…
A: Since amount is compounded monthly, monthly interest rate is 0.12/12 and number of periods is 12*4.…
Q: You just bought a motorcycle for $8,000. You plan to ride the motorcycle for two years, and then…
A: “Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: A discount function is defined as follows.a '(t)-1/(1+.012), where t> 0.A five-year annuity has…
A: Given Information Discount function =11+0.01tWhere, t = 1,2,3,4,5 Annual payment is 1
Q: Р370 Р290 Р210 Р130 Р50 Р50 1 3 4 i = 10% F CO
A: We have given a uniform gradient series cash flow in which the value of G is 80 First we will…
Q: Suppose you bought a condo for $100,000 financing it with a $20,000 down payment of your own funds…
A: Return on asset (ROA) can be calculated by using the following formula. Return on equity (ROE) can…
Q: After how many years will Nicole's investment triple if invested at 10% per anmum, net of…
A: Interest is the amount paid in excess of the principal amount by the borrower to the lender. The…
Q: Q1. Suppose a man receives an initial annual salary of 60,000Php, increasing at the rate of 5,000Php…
A: Engineering economics is defined as the process of identifying, estimating, and evaluating the…
Q: Suppose the maintenance for a piece of equipment costs P2,669 on year 1 and increases by 5.69% every…
A: Cost is the expenditure that is incurred in producing goods and services. It means the total cost is…
Q: A firm is evaluating an investment proposal which has an initial investment of $8,000 and discounted…
A: A series of cash flows occurring at different times is given a net present value (NPV) or present…
Q: A company is setting up a project to build housing units, and the investment volume is estimated at…
A: * SOLUTION :-
Q: The internal rate of return (IRR) is the interest rate that sets the net present value (NPV) of the…
A: IRR helps in the analysis of various different investment decisions that the company has to make.
Q: A man inherited a regular endowment of P12,904 every end of each month for 10 years. However, he may…
A: Capital Recovery factors = i(1+i)n(1+i)n-1 Here,i = Interestn = Time
Q: Compute the discount if $ 2,000 is discounted for 6 months at 8% simple interest
A: Given information is: Future value (P)= $2,000 Time period (T)= 0.5 years Interest rate (R)= 8% To…
Q: A car dealership offers you no money down on a new car. You may pay for the car f 3 years by equal…
A: In economics and finance, present value, also known as present discounted value, is the value of an…
Q: A 6 year corporate bond of a value of €10,000 at maturity earns an annual cash payment of €650. If…
A: Given: A corporate bond has a value of = €10,000 Time period = 6 years The annual cash payment is =…
Q: U.S. prices rose at an average annual rate of about 3.6 percent over the last 80 years. True…
A: The rise in the general price level over a period a specified time is termed as Inflation. In other…
Q: What is the present value of the following payment series when the interest rate is 3% YR1 = $200…
A: Given interest rate = 3 % the Present value of each cashflow = cashflow / (1 + rate)^year
Q: Background: A client is contemplating on purchasing a new high efficiency pump and motor, with an…
A: Initial cost of pump = $10000 Lifetime of Pump (t) = 15 years Maintenance Cost of Pump per year =…
Q: capital recovery is the best estimate of an anticipated future market or trade-in value at the end…
A: Given statement is capital recovery is the best estimate of an anticipated future market or trade…
Q: What is the value of a perpetuity of P100 per year if the discount rate is 5% and the cash flows do…
A: Present value (PV), also known as present discounted value in economics, is the worth of a predicted…
Q: Assume that an investor is expecting to receive P606,060.00 at the end of 6 years. Compute for the…
A: The amount the investor is expected to receive after 6 years =606060 We need to find the principal…
Q: A child is promised to be given by his mother Ᵽ 5000.00 7.5 years from today. The interest rate is…
A: Since you have asked multiple questions, we will solve first question for you. If you want any…
Q: Question 6.1 You have purchased a machine costing $20,000. The machine will be used for 2 years, and…
A: To justify launching a capital project, such as building a new factory, a corporation must determine…
Q: Lourdes has just retired and plans to consume $8,640 from the retirement account every year for the…
A: Given Annual amount = 8640 $ Time = 16 years Interest rate = 9.6 % Therefore Present worth of amount…
Q: suppose that you invest $100 today in a risk-free investment and let the 4 percent annual intrest…
A: Here we calculate the value of $100 after the 4 year using the future value formula which are as…
Q: What amount of money invested today at 15% interest rate compounded quarterly can provide the…
A: Compound interest, also known as Interest on Interest, is interest that is added to the interest…
I need help to get to this right answer.
Step by step
Solved in 2 steps
- A bank announces that it will lend 1200 S to be repaid in 30 monthlyinstallments of 60 S. Calculate the effective interest rates (annual).A gamer decides to buy the latest state-of- the-art gaming laptop. The gamer sets aside a value of USD 15,000 per month for all of his wants. Given his budget, the gamer can afford to buy a gaming laptop for a down payment of USD 8,000 and a monthly annuity with a value not exceeding 40% of his "WANTS Budget". If the gaming laptop seller agrees to the down payment value, and the balance payable in 5 years at 20% per year payable on a monthly basis, what is the maximum price of the gaming laptop he can afford to purchase?The income from an established chain of laundromats is a continuous stream with its annual rate of flow at timer given by )- 210,000 (dollars per year). If money is worth 3% compounded continuously, find the present value and future value of this chain over the next 5 years. (Round your answers to the nearest dollar) present value future value $ Need Help?
- What amount invested in a savings account that pays 8% interest annually is ?worth $215,892.50 after 1O yearsCurrent Attempt in Progress A small manufacturer has net annual cash flows as follows over the first 4 years of business. The applicable interest rate varies from year to year. End of Year Cash Flow Interest Rate During Year 0 Present Worth -$100,000 Future Worth Click here to access the TVM Factor Table calculator. $ 1 $ $80,000 Uniform Series Annual Equivalents $ 4% 2 3 -$15,000 $70,000 6% Determine the present worth, future worth, and uniform series annual equivalents for each of the 5 flows in the series. Determine a uniform series from t=0 to t=4. 5% 4 $130,000 4%Bruce deposited $100 into the bank account. The account is credited with interest at a nominal annual interest rate of 4% which can be converted every half year. At the same time, Peter deposited $100 into a separate account. Peter's account is credited with annual interest of δ. After 7.25 years, their value for money is the same. calculate value δ!
- A firm expects to install smog control equipment on the exhaust of a gasoline engine. The local smog control district has agreed to pay to the firm a lump sum of money to provide for the first cost of the equipment and maintenance during its 10-year useful life. At the end of 10 years the equipment, which initially cost $10,000, is valueless. The firm and the smog control district have agreed that the following are reasonable estimates of the end-of-year maintenance costs: Year 1 2 3 4 5 $75 100 125 150 175 Year 6 7 8 9 10 $200 225 250 275 300 Assuming interest at 6% per year, how much should the smog control district pay to the firm now to provide for the first cost of the equipment and its maintenance for 10 years?You purchased a winning ticket for a $3 million lottery which pays $300,000immediately and the rest in 9 annual installments. J.G. Wentworth called you and offered you $2 million in cash. Would you accept the offer if the interestrate is 6%?A PlayStation is advertised for $500. A credit plan is offered whereby a deposit of 20% may be paid. The rest is to be paid in equal monthly instalments over 2 years at a flat interest rate of 16% per annum. A customer chooses the credit plan. I SEON SPOM SEOM SERON (a) What is the remaining balance for the PlayStation after a deposit of 20% is paid? SEOM SEONSEO 30 Answer: $ (b) How much interest will be paid altogether? Answer: $ (c) (i) How many repayments will there be? FENOMEEN ENON SEPON SENOM SEDOM SESON SEDON SETOM SEDON SERVE to be? 60 60 60 6 6 6 6 6 6 6 Answer: (ii) What is the monthly repayment? BO Answer: $ FON (d) How much will be paid in total for the PlayStation? OXO OXO OXO OX Answer: $ WEROWEROWEROW
- You received a $5,000 inheritance. You would like to use the money as a down payment for a new house in 5 years. The investment vehicle you chose would have a 10% rate of return, compounded quarterly. How much will you have in 5 years?Jean believes the batteries can be expected to last only for the guarantee period. She does not want to invest extra money in a battery unless she can expect a 40% rate of return. If she plans to keep her present car another 2 years, which battery should she buy? Two investment opportunities are as follows: A B First cost $200 $100 Uniform annual benefit 25 20 End-of-useful-life salvage value 45 Useful life, in years 15 10 At the end of 10 years, Alt. B is not replaced. Thus, the comparison is 15 years of A versus 10 years of B. If the MARR is 8%, which alternative should be selected?Engineering Economics A debt is discharged by paying 20 equal payments of 12,000 pesos at the end of every 3 months. If the interest rate is 16.5% compounded quarterly, find the value of the debt. Make an amortization schedule.