If you are going to buy a new copier for your small business that costs $13,000,...
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If you are going to buy a new copier for your small business that costs $13,000, are you better off paying cash for it or making five yearly payments of $3,250 at the end of each year? Think about the future value of investing the lump sum of $13,000 versus the value of investing the $3,250 each year in an annuity, and consider two cases: one where you earn 2% on your investments and one where you earn 9% If it is invested at After five years, if the $13,000 cash is invested at 2%, the total value of the account would be $ 9%, the total value of the account would be $ If the $3,250 payments are invested at 2%, the total value of the Therefore, at 2%, less account would be $ would be paid by If they are invested at 9%, the total value of the account would be S and at 9%, less would be paid by (Round to the nearest cent as needed) If you are going to buy a new copier for your small business that costs $13,000, are you better off paying cash for it or making five yearly payments of $3,250 at the end of each year? Think about the future value of investing the lump sum of $13,000 versus the value of investing the $3,250 each year in an annuity, and consider two cases: one where you earn 2% on your investments and one where you earn 9% If it is invested at After five years, if the $13,000 cash is invested at 2%, the total value of the account would be $ 9%, the total value of the account would be $ If the $3,250 payments are invested at 2%, the total value of the Therefore, at 2%, less account would be $ would be paid by If they are invested at 9%, the total value of the account would be S and at 9%, less would be paid by (Round to the nearest cent as needed)
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Lets compare the two scenarios paying 13000 cash upfront versus making five yearly payments of 3250 ... View the full answer
Related Book For
Financial Accounting and Reporting a Global Perspective
ISBN: 978-1408076866
4th edition
Authors: Michel Lebas, Herve Stolowy, Yuan Ding
Posted Date:
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