Based on a 4% discount rate, what is the 2020 present value of the costs of the three alternatives estimated to accrue over the next 4 years? Assume that costs are assessed (accrued) at the beginning of the year

Q: What is the present value on January 1, 2016, of 40000 due on January 1, 2020 and discounted at 11%…

A: Step 1: This problem involved the concept of how a certain value or amount of money changes due to…

Q: A project has the following net profit after tax set out below. The average book value of the assets…

A: ARR is one of the capital budgeting tools that can be used by an investor to evaluate a proposed…

Q: Define effective (or equivalent) annual rate (EAR or EFF%)

A: The effective annual interest rate is the real return on reserve funds or savings account or other…

Q: The accrued obligation at the beginning of the year was S456,000 and the current service cost for…

A: Formula: Interest amount = Accrued Beginning obligation amount x Interest rate

Q: present value of $153,000 to be received in 14 years from today. Assume a per annum discount rate…

A: The present value of the amount can be computed as follows:- Present value= Amount/ (1+r)^n Amount =…

Q: If the one-year spot rate is 7 percent and the two-year spot rate is 8.5 per- cent, what is the…

A: One-year forward rate over the second year is (1+two year spot rate)^2/(1+one year spot rate) -1

Q: Analyse Time Interest Earned ratio in 2019  is 4.89 and 2020 is 9.9

A: Solution:- We know, Times Interest Earned ratio means that how many times a firm earns its EBDIT to…

Q: Determine the discount rate assuming the PV of $1,000 at the end of 1 year is $980?

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: What are total finance charges over that three-year period?

A: Finance charges = Total payment made  - Loan amount.

Q: Find the present value on August 10, 2020 of Php 25,000 due on December 18, 2020 at 4% compounded…

A: Present Value refers to the value of cash flows today which is to be received at some future time…

Q: How much should a company deposit now to get the following annual revenues from a project (at i-10…

A: Here, Year Amount ($ in thousands) Interest rate 1  $500.00 10% 2  $540.00 10% 3  $580.00…

Q: An engineering project has an investment amount of $129909 with an annual net profit of $53373 for 6…

A: The time value of money is the idea that the value of money received today will be more worthy than…

Q: Whats the paybck period & discounted payback period for a project with costof 2OO,OOO that generates…

A: for payback period there is not need to discount the cash flows Total cash in first 2 years = 30,000…

Q: Pertinent information for two alternatives A and B is shown below. If i=10%/year and income tax rate…

A: Companies invest money in projects in the hope there will be cash flows from the project in the…

Q: Using the information below and assuming a 30 year amortized 65% LTV at 7% rate what is the DSCR…

A: Let's break down the steps to calculate the DSCR ratio for 120 Jefferson in more detail,…

Q: Using the information below and assuming a 30 year amortized 65% LTV at 7% rate what is the DSCR…

A: The Loan to Value (LTV) ratio is the amount of the loan compared to the value of the property. In…

Q: A firm is considering the following alternatives, each with a five year life. What is the IRR of the…

A: IRR is the rate of return a project generates through its lifetime expressed in annual terms. It is…

Q: The accrued obligation at the beginning of the year was $456,000 and the current service cost for…

A: Accrued obligation at the end of the year = Accrued obligation at the beginning of the year +…

Q: What is the 5-year Benefit-Cost-Ratio (BCR) at 5% interest rate for an equipment project with the…

A: The advantages to the company from a certain initiative, investment, or decision exceed the…

Q: Assume a discount rate of 7 percent and calculate the effective rent over three years when net rent…

A: YearsRent amount1$232$413$55Discount rate=7%Required:Effective Rent=?

Q: If present cost of SR 30,000, annual costs of SR 3,500, periodic costs every five years of 7,500,…

A: Capitalized Cost (CC) is Net Present Value(NPV) for proposal having infinite life period which is…

Q: ed at an annual rate c ona. What amount sh wear for 30 years aften

A: LU 13-2a 1.Present value is the amount of money which we invest today. Since it is semi annually so…

Q: Six mutually exclusive alternatives, A–F, are being examined. For an 8% interest rate, which…

A: Present worth is used to calculate the existing value of future worth for decision making.

Q: What is the equivalent annual cost in years 1 through 11 of a contract that has a first cost of…

A: Present worth (PW) of costs ($) = 79,000 + 18,000 x P/A(11%, 9) x P/F(11%, 2) = 79,000 + 18,000 x…

Q: How can the initial investment be depreciated on a seven-year MACRS?

A: If a company purchases a fixed asset, the value of the asset cannot be same every year. The value of…

Q: If the spot CAD/USD rate is 1.1239 and the two year interest rates on CAD and USD are 1.75% and 1.4%…

A: Forward Rate can be calculated as follows: Forward rate=Spot rate×1+interest rate of CAD1+interest…

Q: Fs n were part of a N

A: Formula to calculate PV of cash flows is: PV = FV/(1+r)^n Formula to calculate NPV is: NPV = cash…

Q: What is the equivalent annual cost in years 1 through 9 of a contract that has a first cost of…

A: The equivalent annual cost is equivalent cost that would replace the all cost including initial cost…

Q: Suppose that the allocation of a natural resource during three years results in a stream of total…

A: c) Computation:

Q: You expect to receive 10 annual payments of $6,629, starting at the end of the year. How much are…

A: Number of Annual Payment = n = 10Annual Payment = p = $6629Discount Rate = r = 8.44%

Q: 1. Determine the discount rate assuming the PV of $1080 at the end of 1-year is $980

A: Discount rate is calculated using NPER function in excel

Q: You buy the property at the price of $ 7,000,000 , and it is expected to generate $ 449578 net…

A: Price of the property =                                                 70,00,000 Net Operating…

Q: Answer the given problem below. Attach a complete solution. Determine the exact simple interest on…

A: Principal amount (P) = P150000 Period from June 25,2005 to September 2,2006 (d) = 434 days Interest…

Q: 1000 dollars is deposited into an account at the beginning of the year and the value at the end of…

A: GIVEN, PRESENT VALUE=$1000 future value=$1276.30 n=5

Q: What is the equivalent annual cost in years 1 through 11 of a contract that has a first cost of…

A: Present worth (PW) of costs ($) = 65,000 + 15,000 x P/A(11%, 9) x P/F(11%, 2)= 59,000 + 15,000 x…

Q: a. What is the value of this office building, assuming that the building is sold at the end of year…

A: Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: What is the approximate after-tax IRR on a two-year project for which the first cost is $13,000,…

A: First cost = $13,000Savings in 1st year = $5,000Savings in 2nd year = $10,000Tax rate = 40%

Q: Find the What is the CC of initial cost S300,000, annual costs of S35,000, and recurring costs every…

A: The capitalized-equivalent-worth approach or Capitalized Cost(CC) Analysis is the present worth(PW)…

Q: At what interest rate the 5-year Benefit-Cost-Ratio (BCR) becomes unity for an equipment project…

A: Benefit-Cost-Ratio refers to the interest rate at which the asset is generating cashflows to the…

Q: Determine the combined present value as of December 31, 2016, of the following four payments to be…

A: Present Value:The value of today’s amount to be paid or received in the future at a compound…

Q: Find the What is the CC of initial cost 936,069s, annual costs of 42,2305, and recurring costs every…

A: The time value concept is an important technique that determines the present as well as the future…

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.