en saved $800,000 during the 25 years that he worked for a major corporation. Now he has retired at the age of 50 and h Onth. He wants to ensure the financial security of his retirement by investing his savings wisely and is currently considering an initial payment of $600,000. The following table presents the estimated cash inflows for the two alternatives. Year 1 Year 2 Year 3 Year 4 unity # 1 $178,000 $188,000 $252,000 $324.000
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- Uncle Ben saved $800.000 during the 25 years that he worked for a major corporation. Now he has retired at the age of 50 and has begun to draw a comfortable pension check every month. He wants to ensure the financial security of his retirement by investing his savings wisely and is currently considering two investment opportunities. Both investments require an initial payment of $600.000. The following table presents the estimated cash inflows for the two alternatives. Year 1 Year 2 Year 3 Year 4 Opportunity # 1 $178,000 $188,000 $252,000 $324,000 Opportunity # 2 328,000 348,000 56,000 48,000 Uncle Ben decides to use his past average return on mutual fund investments as the discount rate; it is 8 percent. Answer this question: Compute for the Net Present Value of opportunity #1. Compute for the Profitability Index of opportunity #1 Compute for the Net Present Value of opportunity #2 Compute for the Profitability Index of opportunity…Daryl Kearns saved $270,000 during the 25 years that he worked for a major corporation. Now he has retired at the age of 50 and has begun to draw a comfortable pension check every month. He wants to ensure the financial security of his retirement by investing his savings wisely and is currently considering two investment opportunities. Both investments require an initial payment of $190.500 The following table presents the estimated cash inflows for the two alternatives: Opportunity #1 Opportunity #2 Year 1 $ 55,650 104,100 Year 2 $58,890 109,450 Year 3 $78,840 17,100 Mr. Kearns decides to use his past average return on mutual fund investments as the discount rate; it is 10 percent. PV of $1 and PXA of 5) (Use appropriate factor(s) from the tables provided.) Required a. Compute the net present value of each opportunity. Which should Mr. Keams adopt based on the net present value approach? b. Compute the payback period for each opportunity. Which should Mr. Kearns adopt based on the…Uncle Ben saved $800,000 during the 25 years that he worked for a major corporation. Now he has retired at the age of 50 and has begun to draw a comfortable pension check every month. He wants to ensure the financial security of his retirement by investing his savings wisely and is currently considering two investment opportunities. Both investments require an initial payment of $600,000. The following table presents the estimated cash inflows for the two alternatives. Year 1 Year 2 Year 3 Year 4 Opportunity # 1 $178,000 $188,000 $252,000 $324,000 Opportunity # 2 328,000 348,000 56,000 48,000 Uncle Ben decides to use his past average return on mutual fund investments as the discount rate; it is 8 percent. Answer the questions: 1. Compute for the Accounting Rate of Return of opportunity #1. 2. Compute for the Accounting Rate of Return of opportunity #2. 3. Compute for the Internal Rate of Return of opportunity #1. 4. Compute for the Internal Rate of Return of opportunity #2.
- Daryl Kearns saved $250,000 during the 25 years that he worked for a major corporation. Now he has retired at the age of 50 and has begun to draw a comfortable pension check every month. He wants to ensure the financial security of his retirement by Investing his savings wisely and is currently considering two Investment opportunities. Both Investments require an initial payment of $183,000. The following table presents the estimated cash inflows for the two alternatives: Opportunity #1 Opportunity #2 Year 1 $ 55,630 104,100 Year 2 $ 58,820 109,450 Year 3 $78,930 17,100 Mr. Keams decides to use his past average return on mutual fund Investments as the discount rate: It is 8 percent. (PV of $) and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required Opportunity 1 Opportunity 2 Which opportunity should be chosen? a. Compute the net present value of each opportunity. Which should Mr. Kears adopt based on the net present value approach? b. Compute the payback period…Daryl Kearns saved $300,000 during the 25 years that he worked for a major corporation. Now he has retired at the age of 50 and has begun to draw a comfortable pension check every month. He wants to ensure the financial security of his retirement by investing his savings wisely and is currently considering two investment opportunities. Both investments require an initial payment of $191,000. The following table presents the estimated cash inflows for the two alternatives: Opportunity #1 Opportunity #2 Year 1 $ 55,655 104,400 Year 2 $ 58,910 109, 650 Year 3 $78,900 18,300 Mr. Kearns decides to use his past average return on mutual fund investments as the discount rate; it is 10 percent. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required Required A Required B a. Compute the net present value of each opportunity. Which should Mr. Kearns adopt based on the net present value approach? b. Compute the payback period for each opportunity. Which should Mr.…Daryl Kearns saved $220,000 during the 25 years that he worked for a major corporation. Now he has retired at the age of 50 and has begun to draw a comfortable pension check every month. He wants to ensure the financial security of his retirement by investing his savings wisely and is currently considering two investment opportunities. Both investments require an initial payment of $190,000. The following table presents the estimated cash inflows for the two alternatives: Year 1 $ 55,670 104,000 Year 2 Year 3 Year 4 Opportunity #1 Opportunity #2 $ 58,930 109,700 $78,750 18,200 $101,400 15,200 Mr. Kearns decides to use his past average return on mutual fund investments as the discount rate; it is 10 percent. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required a. Compute the net present value of each opportunity. Which should Mr. Kearns adopt based on the net present value approach? Compute the payback period for each opportunity. Which should Mr.…
- Daryl Kearns saved $270,000 during the 25 years that he worked for a major corporation. Now he has retired at the age of 50 and has begun to draw a comfortable pension check every month. He wants to ensure the financial security of his retirement by investing his savings wisely and is currently considering two investment opportunities. Both investments require an initial payment of $189,000. The following table presents the estimated cash inflows for the two alternatives: Year 2 $ 58,900 Year 1 Year 3 Year 4 Opportunity #1 Opportunity #2 $ 55,650 103,900 $78,940 17,900 $101,280 14,800 108,850 Mr. Kearns decides to use his past average return on mutual fund investments as the discount rate; it is 12 percent. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required a. Compute the net present value of each opportunity. Which should Mr. Kearns adopt based on the net present value approach? b. Compute the payback period for each opportunity. Which should Mr.…Daryl Kearns saved $240,000 during the 30 years that he worked for a major corporation. Now he has retired at the age of 60 and has begun to draw a comfortable pension check every month. He wants to ensure the financial security of his retirement by investing his savings wisely and is currently considering two investment opportunities. Both investments require an initial payment of $160,000. The following table presents the estimated cash inflows for the two alternatives: Year 4 $80,000 Year 1 Year 2 Year 3 Opportunity #1 Opportunity #2 $44,000 81,600 $47,200 $63,200 86,400 16,000 16,000 Mr. Kearns decides to use his past average return on mutual fund investments as the discount rate; it is 8 percent. (PV of $1 and PVA of $1) (Use appropriate factor(s) from the tables provided.) Required a. Compute the net present value of each opportunity. Which should Mr. Kearns adopt based on the net present value approach? b. Compute the payback period for each opportunity. Which should Mr. Kearns…Jack Walter recognizes the value of saving part of his income. He has set a goal to have $15,000 in cash available for emergencies. Assume he invests semiannually to have $15,000 in five years and the sinking fund he has selected pays 8% annually, compounded semiannually. Find the total interest earned on the sinking fund using the given table. E Click the icon to view the table. The total interest earned will be S . (Round to the nearest cent as needed.)
- On his 21st birthday, Gab was gifted P500,000. He invested this money in a mutual fund that earns 10% compounded semiannually. Gab also made annual deposits amoounting P30,000 in the same account. After 10 year, he decided to withdraw P250,000. Gab plans to retire at age 55 using the money in the account with monthly withdrawal thereafter. a. draw a cash flow diagram b. what is the balance of the account after Gab withraws P250,000A young woman, 22 years old has just graduated from college. She accepts a good job and desires to establish her own retirement fund. At the end of each year thereafter she plans to deposit P2,000 in a fund at 15% annual interest: How old will she be when the fund has a cumulated value of P1,000,000? Include the cashflow diagram. Ans. 53 years oldA civil engineer starts investing his money when he graduates from college. He is able to afford investing $10,000 a year from the time he graduates in four years until the end of eight years. He also plans to increase his investment an additional $2,500 per year increasing by $2,500 every year until year eight. Use the interest rate 10%. a. draw the cash flow diagrams for the above cash flows b. how much will the civil engineer have saved by the end of year eight c. what is its present worth on the year he started college