An unavoidable cost may be met by outlays of $85,000 now and $6,000 at the end...

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An unavoidable cost may be met by outlays of $85,000 now and $6,000 at the end of every six months for four years (Alternative 1) or by making monthly payments of $1,770 for eight years (Alternative 2). Interest is 8% compounded quarterly. Compute the present value of each alternative and determine the preferred alternative according to the discounted cash flow criterion. The present value of Alternative 1 is $ (Round the final answer to the nearest dollar as needed. Round all intermediate values to six decimal places as needed.) A professional sports contract offers $115,000 paid now, $220,000 paid at the end of each of the second and third years, and $800,000 paid at the end of the fourth, fifth, and sixth years (Alternative 1). Alternatively, the contract could offer $450,000 per year paid at the end of each of the six years (Alternative 2). If money is worth 9.7%, which offer is preferable for the athlete? The preferred offer is ..... A company is developing a special vehicle for Arctic exploration. The development requires an initial investment of $65,000 and investments of $52,000 and $42,000 for the next two years, respectively. Net returns beginning in Year 4 are expected to be $30,000 per year for 13 years. If the company requires a rate of return of 11%, compute the net present value of the project and determine whether the company should undertake the project. 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.) A company has to make a decision about expanding its production facilities. Research indicates that the desired expansion would require an immediate outlay of $160,000 and an outlay of a further $20,000 in 4 years. The net cash returns are shown below. Find the net present value of the project. According to the net present value criterion, should the expansion project be undertaken if the required rate of return is 11%? Year 1 to Year 10 Year 11 to Year 16 $20,000 per year $35,000 per year The net present value of the expansion project is $ (Round the final answer to the nearest dollar as needed. Round all intermediate values to six decimal places as needed.) A company is considering purchasing equipment costing $90,000. The equipment is expected to reduce costs from year 1 to 5 by $20,000, year 6 to 11 by $15,000, and in year 12 by $3,000. In year 12, the equipment can be sold at a salvage value of $22,000. Calculate the internal rate of return (IRR) for this proposal. %. The internal rate of return is (Round to the nearest tenth as needed.) The Blue Sky Ski Resort plans to install a new chair lift. Construction is estimated to require an immediate outlay of $230,000. The life of the lift is estimated to be fifteen years with a salvage value of $85,000. Cost of clearing and grooming the new area is expected to be $20,000 for each of the first three years of operation. Net cash inflows from the lift are expected to be $41,000 for each of the first five years and $100,000 for each of the following ten years. Calculate the internal rate of return (IRR). The internal rate of return is %. (Round to the nearest tenth as needed.) ..... A $25,000, 7.4% bond redeemable at par is purchased 9.5 years before maturity to yield 8.2% compounded semi-annually. If the bond interest is payable semi-annually, what is the purchase price of the bond? 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 20-year bond issue of 5,900,000 and bearing interest at 4.5% payable annually is sold to yield 5% compounded quarterly. What is the issue price of the bonds? 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.) An unavoidable cost may be met by outlays of $85,000 now and $6,000 at the end of every six months for four years (Alternative 1) or by making monthly payments of $1,770 for eight years (Alternative 2). Interest is 8% compounded quarterly. Compute the present value of each alternative and determine the preferred alternative according to the discounted cash flow criterion. The present value of Alternative 1 is $ (Round the final answer to the nearest dollar as needed. Round all intermediate values to six decimal places as needed.) A professional sports contract offers $115,000 paid now, $220,000 paid at the end of each of the second and third years, and $800,000 paid at the end of the fourth, fifth, and sixth years (Alternative 1). Alternatively, the contract could offer $450,000 per year paid at the end of each of the six years (Alternative 2). If money is worth 9.7%, which offer is preferable for the athlete? The preferred offer is ..... A company is developing a special vehicle for Arctic exploration. The development requires an initial investment of $65,000 and investments of $52,000 and $42,000 for the next two years, respectively. Net returns beginning in Year 4 are expected to be $30,000 per year for 13 years. If the company requires a rate of return of 11%, compute the net present value of the project and determine whether the company should undertake the project. 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.) A company has to make a decision about expanding its production facilities. Research indicates that the desired expansion would require an immediate outlay of $160,000 and an outlay of a further $20,000 in 4 years. The net cash returns are shown below. Find the net present value of the project. According to the net present value criterion, should the expansion project be undertaken if the required rate of return is 11%? Year 1 to Year 10 Year 11 to Year 16 $20,000 per year $35,000 per year The net present value of the expansion project is $ (Round the final answer to the nearest dollar as needed. Round all intermediate values to six decimal places as needed.) A company is considering purchasing equipment costing $90,000. The equipment is expected to reduce costs from year 1 to 5 by $20,000, year 6 to 11 by $15,000, and in year 12 by $3,000. In year 12, the equipment can be sold at a salvage value of $22,000. Calculate the internal rate of return (IRR) for this proposal. %. The internal rate of return is (Round to the nearest tenth as needed.) The Blue Sky Ski Resort plans to install a new chair lift. Construction is estimated to require an immediate outlay of $230,000. The life of the lift is estimated to be fifteen years with a salvage value of $85,000. Cost of clearing and grooming the new area is expected to be $20,000 for each of the first three years of operation. Net cash inflows from the lift are expected to be $41,000 for each of the first five years and $100,000 for each of the following ten years. Calculate the internal rate of return (IRR). The internal rate of return is %. (Round to the nearest tenth as needed.) ..... A $25,000, 7.4% bond redeemable at par is purchased 9.5 years before maturity to yield 8.2% compounded semi-annually. If the bond interest is payable semi-annually, what is the purchase price of the bond? 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 20-year bond issue of 5,900,000 and bearing interest at 4.5% payable annually is sold to yield 5% compounded quarterly. What is the issue price of the bonds? 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.)