Year 1 Year 2 S01,000 $72.500 $18,500 Year 3 NOI S4,640 S08,426 DS $72.500 S2,500 Cash flow $72,140 $25,926 $1,094,000 SE63,317 S456,609 $333,868 Resale in year 3 Less mortgage balance Total cash flow $18,500 $16,667 $22,140 Present value of cash flow 11% $17,969 Jsing the information from the question above, what would be the equity dividend rate in year 1? D3. 13 percent $421,800 5 02 percent $18,500 10. 14 percent Jot enough information
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- Determine the monthly principal and interest payment for a 20-year mortgage when the amount financed is $285,000 and the annual percentage rate (APR) is 4.0%. The monthly principal and interest payment is (Round to the nearest cent as needed.).Grove Media plans to acquire production equipment for $845,000 that will be depreciated for tax purposes as follows: year 1, $329,000; year 2, $189,000; and in each of years 3 through 5, $109,000 per year. A 10 percent discount rate is appropriate for this asset, and the company's tax rate is 20 percent. Use Exhibit A.8 and Exhibit A.9. Required: a. Compute the present value of the tax shield resulting from depreciation. b. Compute the present value of the tax shield from depreciation assuming straight-line depreciation ($169,000 per year). Complete this question by entering your answers in the tabs below. Required A Required B Compute the present value of the tax shield resulting from depreciation. Note: Round PV factor to 3 decimal places. Present value of the tax shield1 Find the amount of simple interest on a loan of $4,500 at 9% interest for 13 years. 2 $427.50 $1,485.15 $4,275.00 $5,557.50
- The investment committee of Sentry Insurance Co. is evaluating two projects, office expansion and upgrade to computer servers. The projects have different useful lives, but each requires an investment of $490,000. The estimated net cash flows from each project are as follows: Year 1 2 Year 3 4 5 The committee has selected a rate of 12% for purposes of net present value analysis. It also estimates that the residual value at the end of each project's useful life is $0, but at the end of the fourth year, the office expansion's residual value would be $180,000. 6 7 8 9 10 1 1 2 3 2 4 5 6 3 0.943 0.890 0.840 Present Value of $1 at Compound Interest 6% 10% 12% 0.792 0.747 0.705 0.665 0.627 0.592 0.558 Net Cash Flows Office Expansion $125,000 125,000 125,000 125,000 125,000 125,000 0.943 1.833 2.673 0.909 0.826 0.751 0.683 0.621 0.564 0.513 0.467 0.424 0.386 Net Cash Flows Servers $165,000 165,000 165,000 165,000 0.909 1.736 2.487 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322…The investment committee of Sentry Insurance Co. is evaluating two projects, office expansion and upgrade to computer servers. The projects have different useful lives, but each requires an investment of $490,000. The estimated net cash flows from each project are as follows: Year 1 1 2 3 4 2 Year 5 6 3 7 8 9 10 4 The committee has selected a rate of 12% for purposes of net present value analysis. It also estimates that the residual value at the end of each project's useful life is $0, but at the end of the fourth year, the office expansion's residual value would be $180,000. 5 6 0.943 0.890 0.840 Present Value of $1 at Compound Interest 6% 10% 0.792 0.747 0.705 0.665 0.627 Net Cash Flows Office Expansion $125,000 125,000 125,000 125,000 125,000 125,000 0.592 0.558 0.909 0.826 0.751 0.683 0.621 0.564 0.513 Net Cash Flows Servers 0.467 $165,000 165,000 165,000 165,000 0.424 0.386 12% 0.893 0.797 0.712 0.636 0.567 0.507 0.452 0.404 0.361 0.322 15% 0.870 0.756 0.658 0.572 0.497 0.432…Duration Amount $75 million $750 million Assets Rate Cash 1.75 years 12 percent 9 percent Loans Treasuries $175 million 7.00 years Liabilities and Equity Time Deposits 1.75 vears 7 percent 8 percent $350 million CDs $575 million 2.50 vears Equity S75 million Calculate the duration of the liabilities to four decimal places. O 1.75 years. 2.22 years. 2.125 years. 2.50 years. 2.05 years.
- You work for a nuclear research laboratory that is contemplating leasing a diagnostic scanner (leasing is a very common practice with expensive, high-tech equipment). The scanner costs $4,800,000, and it would be depreciated straight-line to zero over four years. Because of radiation contamination, it actually will be completely valueless in four years. You can lease it for $1,430,000 per year for four years. Assume that the tax rate is 21 percent. Suppose the entire $4,800,000 purchase price of the scanner is borrowed. The rate on the loan is 8 percent, and the loan will be repaid in equal annual installments. Calculate the amount of annual loan repayment. (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Payment Complete the schedules given below and calculate the NAL. (A negative answer should be indicated by a minus sign. Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.) Amortization Year…Net Present Value-Unequal Lives Project 1 requires an original investment of $88,600. The project will yield cash flows of $17,000 per year for six years. Project 2 has a calculated net present value of $23,200 over a four-year life. Project 1 could be sold at the end of four years for a price of $69,000. Use the Present Value of $1 at Compound Interest and the Present Value of an Annuity of $1 at Compound Interest tables shown below. Present Value of $1 at Compound Interest 12% Year 6% 10% 15% 20% 0.909 1 0.943 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 0.712 3 0.840 0.751 0.658 0.579 0.792 0.683 0.636 0.572 4 0.482 0.621 5 0.747 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 0.424 0.592 0.361 0.284 0.194 0.247 10 0.558 0.386 0.322 0.162Principal 25,000 Rate 8.5% Time Years Interest 6375 How many years?
- The Ruffins are negotiating with two banks for a mortgage to buy a house selling for $145,000. The terms at bank A are a 25% down payment, an interest rate of 10%, a 30-year conventional mortgage, and 3 points to be paid at the time of closing. The terms at bank B are a 15% down payment, an interest rate of 11.0%, a 25-year conventional mortgage, and no points. Which loan should the Ruffins select in order for the total cost of the house to be less? Click the icon to view the table of monthly payments. From which bank should the Ruffins take the loan? Bank B O Bank AQuestion text A payment of $400 was made at the end of each year for five years into a savings account. The interest rate on the account is 6% compounded annually. Find the interest earned on the account. a. $254.84 b. $174.89 c. $240.00 d. $200.00Project 1 requires an original investment of $84,200. The project will yield cash flows of $19,000 per year for seven years. Project 2 has a calculated net present value of $18,000 over a five-year life. Project 1 could be sold at the end of five years for a price of $81,000. Use the Present Value of $1 at Compound Interest and the Present Value of an Annuity of $1 at Compound Interest tables shown below. Present Value of $1 at Compound Interest 10% Year 6% 12% 15% 20% 0.943 0.909 0.893 0.870 0.833 0.890 0.797 0.756 0.694 0.826 0.579 0.840 0.751 0.712 0.658 0.792 0.683 0.636 0.572 0.482 0.567 0.621 0.402 0.747 0.497 0.705 0.564 0.507 0.335 0.432 0.665 0.513 0.452 0.376 0.279 0.233 8. 0.627 0.467 0.404 0.327 0.424 0.361 9. 0.592 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Present Value of an Annuity of $1 at Compound Interest Year 10% 12% 15% 20% 1.