A contract is estimated to yield net annual returns of $15,500 for ten years. To secure...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A contract is estimated to yield net annual returns of $15,500 for ten years. To secure the contract, an immediate outlay of $80,000 is required. Interest is 14% compounded annually. Calculate the net present value (NPV) of the contract and determine whether the project should be accepted or rejected according to the net present value criterion. The net present value of the project is $ (Round the final answer to the nearest dollar as needed. Round all intermediate values to six decimal places as needed.) Should the project be accepted or rejected? The project should be Determine the purchase price at the indicated time before maturity of the following bond redeemed at par shown in the table below. Par Value Bond Rate Payable Semi-Annually Time Before Redemption Yield Rate Conversion Period $34,000 6.5% 6 years 5.75% annually The purchase price of the bond is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) A $99,000 mortgage is to be amortized by making monthly payments for 25 years. Interest is 8.4% compounded semi-annually for a five-year term. (a) Compute the size of the monthly payment. (b) Determine the balance at the end of the five-year term. (c) If the mortgage is renewed for a five-year term at 5% compounded semi-annually, what is the size of the monthly payment for the renewal term? (a) The size of the monthly payment is $ . (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (b) The balance at the end of the five-year term is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (c) The size of the monthly payment for the renewal term is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) A contract is estimated to yield net annual returns of $15,500 for ten years. To secure the contract, an immediate outlay of $80,000 is required. Interest is 14% compounded annually. Calculate the net present value (NPV) of the contract and determine whether the project should be accepted or rejected according to the net present value criterion. The net present value of the project is $ (Round the final answer to the nearest dollar as needed. Round all intermediate values to six decimal places as needed.) Should the project be accepted or rejected? The project should be Determine the purchase price at the indicated time before maturity of the following bond redeemed at par shown in the table below. Par Value Bond Rate Payable Semi-Annually Time Before Redemption Yield Rate Conversion Period $34,000 6.5% 6 years 5.75% annually The purchase price of the bond is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) A $99,000 mortgage is to be amortized by making monthly payments for 25 years. Interest is 8.4% compounded semi-annually for a five-year term. (a) Compute the size of the monthly payment. (b) Determine the balance at the end of the five-year term. (c) If the mortgage is renewed for a five-year term at 5% compounded semi-annually, what is the size of the monthly payment for the renewal term? (a) The size of the monthly payment is $ . (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (b) The balance at the end of the five-year term is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) (c) The size of the monthly payment for the renewal term is $ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.)
Expert Answer:
Related Book For
Contemporary Business Mathematics with Canadian Applications
ISBN: 978-0133052312
10th edition
Authors: S. A. Hummelbrunner, Kelly Halliday, K. Suzanne Coombs
Posted Date:
Students also viewed these finance questions
-
A contract is estimated to yield net returns of $3500 quarterly for seven years. To secure the contract, an immediate outlay of $50 000 and a further outlay of $30 000 three years from now are...
-
A $50 000, 6% bond with semi-annual coupons redeemable at par on April 25, 2018, was purchased on June 25, 2009, at 94.378. What was the approximate yield rate? 2. An obligation can be settled by...
-
A billboard at the top of a building is being illuminated by a projection light (L) that is 103 feet from the base of the building as shown in the figure. Determine how tall the billboard if its...
-
Consider the gas-phase transfer of an electron from a sodium atom to a chlorine atom: Na (g) + Cl (g) Na+ (g) + Cl- (g) (a) Write this reaction as the sum of two reactions, one that relates to...
-
Hanna Company s current asset and current liability account balances at the beginning and end of the year were as follows: December 3 1 End of Year Beginning of Year Current assets: Cash and cash...
-
Predicting Prices of Used Cars (Regression Trees). The file ToyotaCorolla.jmp contains the data on used cars (Toyota Corolla) on sale during late summer of 2004 in The Netherlands. It has 1436...
-
On May 21, 1927, Charles Lindbergh landed at Le Bourget Field in Paris, completing his famous transatlantic solo flight. The preparation period prior to his flight was quite hectic and time was...
-
Lily Corporation has 100,000 shares of $40 par value preferred stock authorized. During the year, it had the following transactions related to its preferred stock. (a) Issued 25,000 shares at $60 per...
-
O PROBABILITY Permutations and combinations: Problem type 2 Answer the questions below. (If necessary, consult a list of formulas.) (a) A pizza parlor has a choice of 10 toppings for its pizzas....
-
There are participants and analysts in the stock market that are called chartists or technical analysts. What does the theory that the market is weak-form efficient say about these investors' chances...
-
What is the role of natural buyers and natural sellers in order-driven markets?
-
a. What is a crossing network? b. Name three crossing networks. c. What are the disadvantages of a crossing network?
-
Why should an investor who believes that the market is efficient pursue an indexing strategy?
-
How do order-driven and quote-driven market structures differ?
-
Imagine you are the assistant controller in charge of general ledger accounting at Linbarger Company. Your company has a large loan from an insurance company. The loan agreement requires that the...
-
1. What is the semi-annually compounded interest rate if $200 accumulates to $318.77 in eight years? Answer in percentage with two decimal places. 2. What is the quarterly compounded interest rate if...
-
You are an options dealer who deals in non-publicly traded options. One of your clients wants to purchase a one-year European call option on HAL Computer Systems stock with a strike price of \($20.\)...
-
\(50 \mathrm{~m}^{3}\) of air at \(18^{\circ} \mathrm{C}\) DBT and \(12^{\circ} \mathrm{C}\) WBT are mixed with \(20 \mathrm{~m}^{3}\) of dry air at \(32^{\circ} \mathrm{C}\) DBT and \(24^{\circ}...
-
Which production process would use an assembly line? a. Continuous production b. Intermittent process c. Mass customization d. Lean production
Study smarter with the SolutionInn App