Question: 1. Compute the Amount We need to Save Every Year to have $100,000 at the End of 10 Years. Assume an Annual Interest rate of

1. Compute the Amount We need to Save Every Year to have $100,000 at the End of 10 Years.

Assume an Annual Interest rate of 10%.

You can Use the PV+FV Charts.

2. Which One is TRUE ?

Most Capital Projects have little Risk to an Organization

The Cash Payback Period and the Accounting Annual Rate of Return Investment Evaluation Methods usually consider the Time Value of Money in the Evaluation Process.

All of These Choices are True

The Net Present Value and the Internal Rate of Return Investment Evaluation Methods do not always Consider the Time Value of Money in the Evaluation Process.

Most Capital Projects Become Sunk Costs Quickly.

3. Compute the Value Today of a Capital Project.

Annual Revenues for 10 Years = $15,000

Cost of Capital = 15.00%

Ignore Income Taxes.

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