question 1 Power Bikes is planning to develop a new composite bike. Development of the bike takes
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Power Bikes is planning to develop a new composite bike. Development of the bike takes years at a cost per year of $ which is paid at the end of each year of development. When the development period is finished, sales of the bike can begin. This will generate an annual cash inflow of $ at the end of each full year of selling with the first inflow being at t for the following years. Assume that Power Bikes has a cost of capital of for projects of this risk class. What is the NPV of the project?
The present value t of development cost is $
Round to decimal places.
The present value t of sales from Power Bikes $
Round to decimal places.
The NPV of the project is $
Question
years ago, Alicia and Marcus bought a house. They had saved a downpayment of $ and could afford a monthly payment of Their home loan offered a rate of monthly compounded and was based on a year amortization term. When they bought the house the price equalled their maximum financial capability at the
time.
What was the price of the house when they purchased it years ago? S nearest cent.
Round to the
Now, years later, the home loan has to be renewed.
What is the current balance on their home loan? S
Round to the nearest cent.
The lending rate is now monthly compounded The date at which the house is expected to be paid
off remains the same.
What will be the new monthly payment? S
Round to the nearest cent.
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