1.What is the present value of 10 equal payments of $15,000 with an interest rate of 10 percent? (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)

2.What is the present value of $500,000 to be paid in 10 years with an interest rate of 8 percent? (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)

3.

Many businesses borrow money during periods of increased business activity to finance inventory and accounts receivable. Neiman Marcus is one of Americas most prestigious retailers. Each Christmas season, Neiman Marcus builds up its inventory to meet the needs of Christmas shoppers. A large portion of these Christmas sales are on credit. As a result, Neiman Marcus often collects cash from the sales several months after Christmas. Assume that on November 1, 2014, Neiman Marcus borrowed $4.8 million cash from Texas Capital Bank for working capital purposes and signed an interest-bearing note due in six months. The interest rate was 8 percent per annum payable at maturity. The accounting period ends December 31.

Required:

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Determine the financial statement effects for each of the following: (a) issuance of the note on November 1, (b) the impact of the adjusting entry at the end of the accounting period, and (c) payment of the note and interest on April 30, 2015. Indicate the effects (e.g., cash + or ? ) using the following schedule. (If no impact on the accounting equation leave cells blank.)

4.

You have just won the state lottery and have two choices for collecting your winnings. You can collect $100,000 (Option 1) today or receive $20,000 (Option 2) per year for the next seven years. A financial analyst has told you that you can earn 10 percent on your investments.

.	1)Calculate the present value of both the options? (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)

2)Which alternative should you select?

5.An investment will pay $15,000 at the end of each year for eight years and a one-time payment of $150,000 at the end of the eighth year. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided.)

Determine the present value of this investment a 7 percent interest rate.