Ava Company projects an increase in net income of $34,766 each year for the next five years if it invests $140,145 in new equipment. The equipment has a five-year life and an estimated salvage value of $5,273. What is the annual rate of return on this investment? Round your answer to 2 decimal places. Answer as a percentage. For example, if your calculation is .1056, your answer would be 10.56

Q: The desired accumulated amount is ​$70,000 after 11 years invested in an account with 7.4​% interest…

A: We will use the concept of time value of money here. As per this concept the worth of money changes…

Q: Mike Derr Company expects to earn 12% per year on an Investment that will pay $616,000 six years…

A: Answer :Present value=?=?[1/(1+ rate) ^time]Future value = $616,000Rate = 8%Time = 7  yearsPresent…

Q: Investment A is currently worth $77,700 and is growing at the rate of 11% per year compounded…

A: The FV of an investment refers to the combined value of the cash flows at a future date assuming…

Q: A company will need $65,000 in 6 years for a new addition. To meet this goal, the company deposits…

A: Solution: When an amount is invested somewhere, it earns interest on it. The amount initially…

Q: Use this information for Wyoming Corporation to answer the question that follow. The management of…

A: Capital budgeting is a quantitive process of analyzing investments in capital projects. It involves…

Q: You are buying an investment property for $362,854 today. Through research, you have determined that…

A: It can be calculated using =NPER(rate,pmt,pv,[fv],[type]) Rate The interest rate for the loan. Nper…

Q: You invested $250 at the end of every month for 10 years at 7.5% interest compounded monthly. Use…

A: An annuity is a series of equal periodic payments made or received over a specified period of time.…

Q: Calculate the time necessary to achieve an investment goal. Give your answer to the nearest day. Use…

A: In this we have to determine the daily interest rate and from that we can get time required to…

Q: Walen Co. has intends to purchase a new forklift for $88,000.00 cash. It expects annual net…

A: Step 1: Given,Initial cost of the forklift = $88,000.00Annual net operating cash flows = $13,700 per…

Q: The Ham and Egg Restaurant is considering an investment in a new oven that has a cost of $57,000,…

A: Present value is the current worth of future cash flows by taking into account the required rate.…

Q: Walen Co. has intends to purchase a new forklift for $90,000.00 cash. It expects annual net…

A: Net Present value (NPV) is a financial tool that measures the attractiveness of the project or…

Q: a) How much will this investment be worth after 10 years? (Round your answer to the nearest cent.) $…

A: Investment Amount = $49,000 Time period = 10 years Rate of interest = 8% compounded continuously.…

Q: An investment pays 4000 at the end of year 1 and 2000 at the end of year 2. It was purchased to…

A: The sensitivity of any security or investment duration to the yield changes reveals its convexity.…

Q: Barney Googal owns a garage and is contemplating purchasing a tire retreading machine for $25,820.…

A: Present value = $4,900 x PVAF (7 years, 6%)                       = $4,900 x 5.58238…

Q: What is the present value of $2,000 received today,  $2,500 received at the end of each of the next…

A: Present value of cashflow for any year = Cashflow for that year/(1+ discount rate)^time Cashflow for…

Q: Use the present value formula to determine the amount to be invested​ now, or the present value…

A: Present value is the value of an asset in today’s time. It the value which is worth today. It helps…

Q: Consolidated Aluminum is considering the purchase of a new machine that will cost $308,000 and…

A: The internal rate of return (IRR) for a project is the rate at which the net present value of the…

Q: If $25,000 is invested at 10% per year compounded monthly, in approximately how many years will the…

A:

Q: The income from an established chain of laundromats is a continuous stream with its annual rate of…

A: Given, f(t) = $80,000 r = 4% = 4/100 = 0.04 T = 6 Years

Q: A business is planning to purchase a piece of equipment that will produce a continuous stream of…

A: ### Present Value of a Continuous Income StreamGiven:- Rate of flow  f(t) = 9000  (constant)-…

Q: If you invest $1,200 for 40 years at an 8.1% rate of return, you will have accumulated: (Keep 2…

A: Future value of a present amount With present value (PV), annual rate of return (r) and period (n),…

Q: If $2, 000 is invested for two years after which it grows to a value of $2112.40. What is the…

A: Investment amount (PV) = $2,000Investment future value = $2,112.40Number of years = 2 years

Q: Suppose that annual income from a rental property is expected to start at $1.250 per year and…

A: Investment cost = $ 7000 Rent at end of year 1 = $ 1250 Annual decrease in rent = $ 40 Period = 13…

Q: One year ago, JK Mfg. deposited $20,839 in an investment account for the purpose of buying new…

A: The objective of the question is to calculate the future value of the investment account when JK…

Q: e Derr Company expects to earn 8% per year on an investment that will pay $616,000 seven years from…

A: Answer : Present value= Future value * [1/(1+ rate) ^time] Future value = $616,000 Rate = 8% Time =…

Q: In 2001, a sum of $3000 was invested at a rate of 6.5% per year for 18 years. a)  Write an equation…

A:

Q: How many years will it take Rexchem, Inc., to accumulate $725,000 for a chemical feeder, if the…

A: Solution:-When an equal amount is deposited each period at end of period, it is called ordinary…

Q: Stevie’s Sporting Goods is considering investing $33,000 in a new machine. The machine is expected…

A: Accounting rate of return is that amount which is earned by the investor during the project life. It…

Q: A firm buys a new piece of equipment for $28,808, and will receive a cash flow of $3,700 per year…

A: Solution:-Internal Rate of Return (IRR) is the rate of return the project is yielding. It can be…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.