A company is considering an iron ore extraction project that requires an initial investment of $1,500,000 and will yield annual cash inflows of $557,621 for four years. The company's discount rateis 9%. Calculate IRR.Present value of ordinary annuity of $1:123410% 12% 14%0.909 0.893 0.8771.736 1.690 1.6472.487 2.402 2.3223.170 3.037 2.914 2.855 2.798OA. 16%OB. 18%O C. 17%OD. 20%15% 16% 18% 20%0.870 0.862 0.847 0.8331.626 1.605 1.5661.5282.283 2.246 2.174 2.1062.690 2.589

IRR is the one of the method of capital budgeting based on time value of money and here net present…

ent value of ordinary annuity of $1: 10% 12% 14% 1 0.909 0.893 2 1.736 1.690 0.877 1.647 2.322 3.170 3.037 2.914 2.855 2.798 3 2.487 2.402 4 A. 16% B. 18% C. 17% D. 20% 18% 15% 16% 0.870 0.862 0.847 1.626 1.605 1.566 2.283 2.246 2.174 2.690 20% 0.833 1.528 2.106 2.589

ent value of ordinary annuity of $1: 10% 12% 14% 1 0.909 0.893 2 1.736 1.690 0.877 1.647 2.322 3.170 3.037 2.914 2.855 2.798 3 2.487 2.402 4 A. 16% B. 18% C. 17% D. 20% 18% 15% 16% 0.870 0.862 0.847 1.626 1.605 1.566 2.283 2.246 2.174 2.690 20% 0.833 1.528 2.106 2.589

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Grove Media plans to acquire production equipment for $845,000 that will be depreciated for tax purposes as follows: year 1, $329,000; year 2, $189,000; and in each of years 3 through 5, $109,000 per year. A 10 percent discount rate is appropriate for this asset, and the company's tax rate is 20 percent. Use Exhibit A.8 and Exhibit A.9. Required: a. Compute the present value of the tax shield resulting from depreciation. b. Compute the present value of the tax shield from depreciation assuming straight-line depreciation ($169,000 per year). Complete this question by entering your answers in the tabs below. Required A Required B Compute the present value of the tax shield resulting from depreciation. Note: Round PV factor to 3 decimal places. Present value of the tax shield
Use Table 12-1 to solve. Suppose a certain manufacturer deposits $7,000 at the beginning of each 3 month period for 8 years in an account paying 8% interest compounded quarterly. (Round your answers to the nearest cent.) (a) How much (in $) will be in the account at the end of the 8 year period? $ 315767 (b) What is the total amount (in $) of interest earned in this account? $ 91767
Ef 253.
Using the annuity table, complete the following. (Use Table 13.2.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Interest Payment amount end of Frequency of payment Length of time PV of Annuity each period rate 1,330 Annually 8 years 8% acer %24
On Joe Martin's graduation from college, Joe's uncle promised him a gift of $11,400 in cash or $740 every quarter for the next 5 years after graduation. Assume money could be invested at 8% compounded quarterly. (Use Table 13.2.) a. Calculate the present value of options. (Do not round intermediate calculations. Round your answers to the nearest cent.) Present value Option 1 Option 2 b. Which offer is better for Joe? O Option 2 O Option 1
a. b. C. Annuity Annual Payment Rate $ 124,000 124,000 124,000 Interest Compounded 8% Annually 10% Annually 12% Annually Period Invested 6 years 6 years 6 years Present Value of Annuity
Sonia wants to have $15,000 in 10 years. Use Table 11-2 to calculate how much she should invest now (in $) at 6% interest, compounded semiannually in order to reach this goal. (Round your answer to the nearest cent.) 8,305.13
Present Value of $1 Periods 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 2 0.980 0.961 0.943 0.907 0.907 0.890 0.873 0.857 0.842 0.826 3 0.971 0.942 0.915 0.889 0.864 0.840 0.816 0.794 0.772 0.751 4 0.961 0.924 0.888 0.855 0.823 0.792 0.763 0.735 0.708 0.683 5 0.951 0.906 0.863 0.822 0.784 0.747 0.713 0.681 0.650 0.621 6 0.942 0.888 0.837 0.790 0.746 0.705 0.666 0.630 0.596 0.564 7 0.933 0.871 0.813 0.760 0.711 0.665 0.623 0.583 0.547 0.513 8 0.923 0.853 0.789 0.731 0.677 0.627 0.582 0.540 0.502 0.467 9 0.914 0.837 0.766 0.703 0.645 0.592 0.544 0.500 0.460 0.424 10 0.905 0.820 0.744 0.676 0.614 0.558 0.508 0.463 0.422 0.386 Present Value of Ordinary Annuity of $1 Periods 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00% 9.00% 10.00% 1 0.990 0.980 0.971 0.962 0.952 0.943 0.935 0.926 0.917 0.909 2 1.970 1.942 1.913 1.886 1.859 1.833 1.808 1.783 1.759 1.736 3 2.941 2.884…
Tait is entering high school and is determined to save money for college. Tait feels he can save $2,500 each year for the next four years from his part-time job. If Tait is able to invest at 6%, how much will he have when he starts college? (Click the icon to view Present Value of $1 table.) E (Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of $1 table.) E (Click the icon to view Future Value of Ordinary Annuity of $1 table.) - X Reference (Round your answer to the nearest dollar.) Reference When Tait starts college he will have Present Value of $1 Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% Future Value of $1 0.990 0.980 0.971 0.962 0.952 0.943 0.980 0.961 0.943 0.925 0.907 0.971 0.942 0.915 0.889 0.864 0.840 0.961 0.924 0.888 0.855 0.823 0.792 0.951 0.906 0.863 0.822 0.784 0.747 0.917 0.909 0.893 | 0.877 0.870 0.862 0.847 0.833 0.826 0.797 0.769 0.756 0.743…
AmountFinanced Number ofPayments MonthlyPayment FinanceCharge APR $18,300 72 $426.08 $ %
Use the table below to answer the following questions: Period 4 567 8 9 10 11 Present Value of an Annuity of 1 4% Future Value of an Annuity of 1 5% 5% 8% 10% 4% 8% 10% 3.6299 3.5460 3.3121 3.1699 4.2465 4.3101 4.5061 4.6410 4.4518 4.3295 3.9927 3.7908 5.4163 5.5256 5.8666 6.1051 5.2421 5.0757 4.6229 4.3553 6.6330 6.8019 7.3359 7.7156 6.0021 5.7864 5.2064 4.8684 7.8983 8.1420 8.9228 9.4872 5.7466 5.3349 9.2142 9.5491 10.6366 11.4359 7.4353 7.1078 6.2469 5.7590 10.5828 11.0266 12.4876 13.5795 8.1109 7.7217 6.7101 6.1446 12.0061 12.5779 14.4866 15.9374 8.7605 8.3064 7.1390 6.4951 13.4864 14.2068 16.6455 18.5312 6.7327 6.4632 Bobby receives alimony payments every 6 months and the next payment is tomorrow. Median homes go for $950,000 and he wants to save $190,000 in 4 years. How much money should Bobby put away into an investment each time he receives alimony payments if he can get a 8% return a year? $35,593 O $31,624 O $23,131 O $46,262
Alice Longtree has decided to invest $430 quarterly for 4 years in an ordinary annuity at 8%. As her financial adviser, calculate for Alice the total cash value of the annuity at the end of year 4. (Please use the following provided Table.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Future value

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