Intermediate Accounting 1. Estimated Cash Flows, PVA

Student Name: Class: Problem 06-05 CLAUSSEN PURCHASE Estimated Cash Flows Years 1-5 Years 6-10 Years 11-20 End of Year 20 Yearly Cash Flow $70,000 70,000 70,000 400,000 Time Period 5 5 5 10 5 5 10 Interest Rate Maximum Purchase Price * Use the Present and Future Value Tables in the text or enter the proper formula rounded to 5 decimal places *Factor PVA PV Given Data P06-05: CLAUSSEN PURCHASE Anticipated cash flows per year for 20 years Selling price in 20 years Desired rate of return: Years 1-5 Years 6-10 Years 11-20 $70,000 $400,000 8% 10% 12% Student Name: Class: Problem 06-07 THE LOWLIFE COMPANY Calculations Part 1 Part 2 Part 3 Part 4 Time PVA Period $250,000 4 $250,000 5 $250,000 $250,000 3 Interest Rate 10% 8% 10% Annuity *Factor Annuity Amount $51,351 $104,087 * Use the Present and Future Value Tables in the text or enter the proper formula rounded to 5 decimal places Calculation Payment Payment Payments Interest Given Data P06-07: LOWLIFE COMPANY Amount of loan Part 1: Interest rate Number of payments Part 2: Interest rate Number of payments Part 3: Interest rate Annual payment amount Part 4: Number of payments Annual payment amount $250,000 10% 4 8% 5 10% $51,351 3 $104,087