INSTRUCTIONS: Solve the following problems. Round off your final answers to two decimal places, if necessary....
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INSTRUCTIONS: Solve the following problems. Round off your final answers to two decimal places, if necessary. Input the values only as your final answers (do not include the percent sign, and currency symbols). Draw the cash flow diagram. Attach your solutions at the end part of the exam. 1. A businessman uses a water pump for his farming business and the maintenance cost of water pump this year is expected to be P500.00. The cost will increase by P50 each year for the subsequent nine years. The interest rate is 8% compounded annually. What is the approximate present worth of maintenance over the full 10-year period? (20 pts) 4. Star Labs wants to set up a trust fund for its new research facility, earning 12% compounded annually to the following: 10M for its annual operating cost and 20M for the replacement of some equipment every 5 years beginning 5 years from now. How much should be invested now? (10 pts) 5. Uncle Ben plans to use his monthly retirement allowance and prepare the future of his 10- year-old nephew. Determine the monthly savings that he should make with interest at 8% monthly to amount to 180,000 at the time his nephew will be 18 years old. (15 pts) INSTRUCTIONS: Solve the following problems. Round off your final answers to two decimal places, if necessary. Input the values only as your final answers (do not include the percent sign, and currency symbols). Draw the cash flow diagram. Attach your solutions at the end part of the exam. 1. A businessman uses a water pump for his farming business and the maintenance cost of water pump this year is expected to be P500.00. The cost will increase by P50 each year for the subsequent nine years. The interest rate is 8% compounded annually. What is the approximate present worth of maintenance over the full 10-year period? (20 pts) 4. Star Labs wants to set up a trust fund for its new research facility, earning 12% compounded annually to the following: 10M for its annual operating cost and 20M for the replacement of some equipment every 5 years beginning 5 years from now. How much should be invested now? (10 pts) 5. Uncle Ben plans to use his monthly retirement allowance and prepare the future of his 10- year-old nephew. Determine the monthly savings that he should make with interest at 8% monthly to amount to 180,000 at the time his nephew will be 18 years old. (15 pts)
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Answer 1 The present worth of maintenance over the full 10year period can be computed using the Pres... View the full answer
Related Book For
Fundamentals of Corporate Finance
ISBN: 978-0077861629
8th edition
Authors: Richard Brealey, Stewart Myers, Alan Marcus
Posted Date:
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