A company intends to set aside funds to cover for the following future expenses payable during the next 15 years: • £500 payable monthly in arrears for the first 10 years; • £5,000 per year payable quarterly in arrears for the remaining 5 years. The first investment option the company is considering would pay an effective annual interest rate of 4.5% throughout the entire 15-year period. Alternatively, another investment plan that is available pays compound interest at the rates of: • • 3.6% per annum nominal convertible monthly for the first 5 years, and 6% per annum nominal convertible quarterly for the remaining 10 years. Calculate the following: (i) The amount of funds that the company would need to invest at t = 0 under these two options. (ii) The investment option the company should choose, and the corresponding amount of saving at t 0 it would make compared to using the other method. =

An investment will pay $16,700 at the end of each year for eight years and a one-time payment of $167,000 at the end of the eighth year. (FV of $1, PV of $1. FVA of $1, and PVA of $1) Note: Use the appropriate factor(s) from the tables provided. Required: Determine the present value of this investment using a 6 percent annual interest rate. Note: Round your Intermediate calculations and final answer to nearest whole dollar. Present value of investment

Aetna is offering customers who invest $10,000 with them today a payment of $1,500 every 1.5 years in perpetuity. If the first payment will be made 1.5 years from today, what is the effective annual rate (EAR) of this investment opportunity?

Of the following investments, which would have the highest present value? Assume that the effective annual rate for all investments is the same and is greater than zero. Group of answer choices Investment A pays $250 at the end of every year for the next 10 years (a total of 10 payments). Investment B pays $125 at the end of every 6-month period for the next 10 years (a total of 20 payments). Investment C pays $125 at the beginning of every 6-month period for the next 10 years (a total of 20 payments). Investment D pays $2,500 at the end of 10 years (just one payment).

What is the minimum number of years that an investment costing $500,000 must return $65,000 per year at a discount rate of 13% in order to be an acceptable investment?

(IRR calculation) Your investment advisor has offered you an investment that will provide you with a single cash flow of $10,000 at the end of 20 years if you make an annual payment of $200 per year in the interim period. Specifically, the annual payments begin immediately and extend through the end of year 19. You then receive the $10,000 at the end of year 20. Find the internal rate of retum on this investment This investment's internal rate of retum is%. (Round to two decimal places) C

You plan to make a lump-sum deposit of $5000 now into an investment account that pays 6% per year, and you plan to withdraw an equal end-of-year amount of $1000 for 5 years, starting next year. At the end of the sixth year, you plan to close your account by withdrawing the re- maining money. Define the engineering economy symbols involved.

A firm, whose cost of capital is 8 percent, may acquire equipment for $146,825 and rent it to someone for a period of five years. Note: Although payment of rent is typically considered to be an annuity due, treat it as an ordinary annuity when completing this problem in a spreadsheet or when using present value factors. If the firm charges $38,730 annually to rent the equipment, what are the net present value and the internal rate of return on the investment? Use Appendix D to answer the questions. Use a minus sign to enter negative values, if any. Round your answers for the net present value to the nearest dollar and for the internal rate of return to the nearest whole number. NPV: $   IRR:  % Should the firm acquire the equipment? The firm  acquire the equipment as the net present value is  , and the internal rate of return  the firm's cost of capital. If the equipment has no estimated residual value, what must be the minimum annual rental charge for the firm to earn the required 8…

A company plans on purchasing a new piece of equipment in six years. The equipment is expected to cost $200,000. In planning for this purchase, the company will deposit an amount of money into an investment account earning 8% compounded annually. Using an 8% interest rate, the implied annual interest is $200,000 x 0.08 = $16,000. The following information is given: Assuming an annual interest rate of 8% for six years is appropriate, the present value of the deposit is $200,000 x 0.63017 = $126,034. Assuming an annual interest rate of 8% for eight years is appropriate, the present value of the deposit is $200,000 x 0.54027 = $108,054. Assuming an annual interest rate of 6% for eight years is appropriate, the present value of the deposit is $200,000 x 0.62741 = $125,482. How much does this company need to deposit today? $108,054 $126,034 $125,482 $104,000

An investor is considering two investment projects. Project A requires an initial payment of £11,000. In return, the investor will receive a payment of £15,200 after one year. Project B requires an initial payment of £10,000. In return, the investor will receive a payment of £1,120 at the end of every month for one year.   Calculate the cross-over rate of the projects  Enter a percentage correct to 1 decimal place. What is the payback period of each project? Project A:  months Project B:  months