1. Construct a cash-flow diagram and find the present worth of the following transactions. Year, k...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
1. Construct a cash-flow diagram and find the present worth of the following transactions. Year, k Deposit, $ 0 10,000 1 200 2 400 3-10 400+300(k-3) 2. Construct a cash-flow diagram and find the present worth of the following transactions. Year, k 2-8 Transaction, $ 2,000-100(k-2) 0 -6,000 1 1,000 5. An advertisement in the newspaper is offering a second mortgage note for sale. The note for $25,000 is due 7 years from now. If you want to make a rate of return of 20% on any investments you make, how much should you pay for the note? 6. A married couple is planning to buy a new sport utility vehicle (SUV) 5 years from now. They expect the SUV to cost $32,000 at the time of purchase. If they want to have half of the cost for a down payment, how much must they save each year if they can earn 10% per year on their savings? 7. If the couple in the previous problem expects to inherit some money 2 years from now, how much would they have to set aside in a lump sum at that time in order to have their down payment? Assume i=10% per year. 8. If you purchase a piece of equipment which has a cost of $23,000, what amount of money will you have to make each year to recover your investment in 6 years if you (a) borrow the money at an interest rate of 15% per year, or (b) pay for the equipment from money you had saved which was earning 10%- per year interest? 9. How much money would you have 12 years from now if you take your Christmas bonus of $2500 each year and (a) place it under your mattress, (b) put it in an interest-bearing checking account at 3% per year, or (c) buy stock in a mutual fund which earns 16% per year? 10. For the cash flow shown below, calculate (a) the equivalent uniform annual worth in years 1 through 4 and (b) the present worth in year 0. Assume i= 14% per year. Year 1 2 Cash Flow, $ 4000 3200 3 2400 4 1600 11. For the cash flow shown below, determine the value of G that will make the equivalent annual worth equal to $800 at an interest rate of 20% per year. Year 1 Cash Flow $200 0 0 2 200+G 3 200+2G 4 200+3G 1. Construct a cash-flow diagram and find the present worth of the following transactions. Year, k Deposit, $ 0 10,000 1 200 2 400 3-10 400+300(k-3) 2. Construct a cash-flow diagram and find the present worth of the following transactions. Year, k 2-8 Transaction, $ 2,000-100(k-2) 0 -6,000 1 1,000 5. An advertisement in the newspaper is offering a second mortgage note for sale. The note for $25,000 is due 7 years from now. If you want to make a rate of return of 20% on any investments you make, how much should you pay for the note? 6. A married couple is planning to buy a new sport utility vehicle (SUV) 5 years from now. They expect the SUV to cost $32,000 at the time of purchase. If they want to have half of the cost for a down payment, how much must they save each year if they can earn 10% per year on their savings? 7. If the couple in the previous problem expects to inherit some money 2 years from now, how much would they have to set aside in a lump sum at that time in order to have their down payment? Assume i=10% per year. 8. If you purchase a piece of equipment which has a cost of $23,000, what amount of money will you have to make each year to recover your investment in 6 years if you (a) borrow the money at an interest rate of 15% per year, or (b) pay for the equipment from money you had saved which was earning 10%- per year interest? 9. How much money would you have 12 years from now if you take your Christmas bonus of $2500 each year and (a) place it under your mattress, (b) put it in an interest-bearing checking account at 3% per year, or (c) buy stock in a mutual fund which earns 16% per year? 10. For the cash flow shown below, calculate (a) the equivalent uniform annual worth in years 1 through 4 and (b) the present worth in year 0. Assume i= 14% per year. Year 1 2 Cash Flow, $ 4000 3200 3 2400 4 1600 11. For the cash flow shown below, determine the value of G that will make the equivalent annual worth equal to $800 at an interest rate of 20% per year. Year 1 Cash Flow $200 0 0 2 200+G 3 200+2G 4 200+3G
Expert Answer:
Answer rating: 100% (QA)
To construct a cashflow diagram we can represent the cash inflows and outflows at different time per... View the full answer
Related Book For
Interpreting and Analyzing Financial Statements
ISBN: 978-0132746243
6th edition
Authors: Karen P. Schoenebeck, Mark P. Holtzman
Posted Date:
Students also viewed these corporate finance questions
-
How do team norms and culture contribute to the overall success of a team, and how can they be established and maintained ?
-
Given the following information, what is the initial net cash outflow? Purchase Price of the new machine Rs . 8 0 0 0 0 Shipping and Installation Charges Rs . 2 0 0 0 0 Sale Price of Old Machine Rs ....
-
Find the present worth for the following cash flow series (in $1000 units). i= 6% per year 8 Year 3 4 5 6. 90 90 90 90 100 90 200 200 4.
-
Scranton Refrigeration Corporation began operations at the beginning of the current year. One of the companys products, a compressor, sells for $370 per unit. Information related to the current years...
-
Cominsky Company purchased a machine on July 1, 2011, for $28,000. Cominsky paid $200 in title fees and county property tax of $125 on the machine. In addition, Cominsky paid $500 shipping charges...
-
Which of the closed binary operations in Exercise 3 have an identity?
-
Anheuser-Busch, owner of the Budweiser and Bud Light brands, was once the largest brewer in the United States, with a nearly 50 percent market share and annual revenues of \($16\) billion. In 2008, a...
-
The income statement for the Timberline Golf Club Inc. for the month ended July 31 shows Service Revenue $16,000; Salaries and Wages Expense $8,400; Maintenance and Repairs Expense $2,500; and Income...
-
6. An annular disk of mass M, inner radius a and outer radius b is placed on a horizontal surface with coefficient of friction , as shown in the figure. At some time, an impulse Jox is applied at a...
-
You will use the three-stage DDM with a linearly declining growth rate in stage 2 to compute the intrinsic value of Walt Disney stock by employing the information in the picture below: You are...
-
Given the following 5 years of data, compute the geometric mean: 2 2.69% t TR 1 11.85 % 3 13.25% Express your answer in decimal notation, e.g., enter 0.0123 to represent 1.23%. 4 7.71% 5 -19.81 %
-
Under what conditions do groups outperform individuals?
-
How are sales margin variances calculated?
-
This is a fairly gripping dramatization of the 2010 Deepwater Horizon oil rig catastrophic explosion and oil spill in the Gulf of Mexico. Examine elements of groupthink. Any other causes of poor...
-
What are the key differences between managing and leading a small group?
-
What is the just-in-time approach to purchasing inventory?
-
POST LAB QUESTIONS 1. Your esophagus is lined by a stratified epithelium. Why might a stratified epithelium be more useful in this location than a simple epithelium? 2. Which type of epithelium (.e....
-
A summary of changes in Pen Corporation's Investment in Sam account from January 1, 2011, to December 31, 2013, follows (in thousands): ADDITIONAL INFORMATION 1. Pen acquired its 80 percent interest...
-
Q1. On the statement of cash flows, a positive amount indicates a cash (__________ / outflow), whereas a negative amount indicates a cash (inflow / __________). Q2. Identify the following...
-
Q1. Sales revenue earned from the sale of Mac computers, iPods, iPhones, iPads, iTunes, and other related products and services totals (_________ million / cant tell) and the cost of those products...
-
Q1. Investing activities include cash transactions that primarily affect the purchasing and selling of (current assets / ______________ / current liabilities / long-term liabilities / stockholders...
-
Reconsider the data from Problem 57 (Orpheum Productions lighting enhancement). Assume that any money not invested in the lighting enhancements will be placed in an interest-bearing account earning...
-
An investor has \($100,000\) to invest in a business venture, or she can earn 10 percent/year with a \($100,000\) certificate of deposit for 4 years. Three possible business ventures have been...
-
This problem is related to Problem 8. Jeff has $10,000 to invest for a period of 5 years. The following three alternatives are available at his bank: Data from problem 8 Jeff has $10,000 to invest...
Study smarter with the SolutionInn App