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Hidalgo Barbers wants to have $230,000 in 14 years to build a second barbershop 14 years from today. Commencing two years from today, Hidalgo will make twelve annual deposits of $15,000 at the end of each year. Alternatively, the company can invest in a financial instrument earning 4% compounded annually. (Click the icon to view the Future Value of $1 table.) (Click the icon to view the Present Value of $1 table.) (Click the icon to view the Future Value of an Ordinary Annuity table.) (Click the icon to view the Future Value of an Annuity Due table.) (Click the icon to view the Present Value of an Ordinary Annuity table.) (Click the icon to view the Present Value of an Annuity Due table.) Read the requirement. (Use the present value and future value tables, the formula method, a financial calculator, or a spreadsheet for your calculations. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, X.XXXXX. Round your final answers to the nearest cent, $X.XX.) a. Will Hidalgo have sufficient funds to pay for the $230,000 barbershop at the end of the 14-year period if the deposits are made at the end of the year? No, Hidalgo will not have sufficient funds. Hidalgo will have 225,387.08 at the end of the 14-year period. b. Will Hidalgo have sufficient funds to pay for the $230,000 barbershop at the end of the 14-year period if the deposits are made at the beginning of each year? Yes, Hidalgo will have sufficent funds. $ 234,402.57 at the end of the 14-year period. Hidalgo will have

Hidalgo Barbers wants to have $230,000 in 14 years to build a second barbershop 14 years from today. Commencing two years from today, Hidalgo will make twelve annual deposits of $15,000 at the end of each year. Alternatively, the company can invest in a financial instrument earning 4% compounded annually. (Click the icon to view the Future Value of $1 table.) (Click the icon to view the Present Value of $1 table.) (Click the icon to view the Future Value of an Ordinary Annuity table.) (Click the icon to view the Future Value of an Annuity Due table.) (Click the icon to view the Present Value of an Ordinary Annuity table.) (Click the icon to view the Present Value of an Annuity Due table.) Read the requirement. (Use the present value and future value tables, the formula method, a financial calculator, or a spreadsheet for your calculations. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, X.XXXXX. Round your final answers to the nearest cent, $X.XX.) a. Will Hidalgo have sufficient funds to pay for the $230,000 barbershop at the end of the 14-year period if the deposits are made at the end of the year? No, Hidalgo will not have sufficient funds. Hidalgo will have 225,387.08 at the end of the 14-year period. b. Will Hidalgo have sufficient funds to pay for the $230,000 barbershop at the end of the 14-year period if the deposits are made at the beginning of each year? Yes, Hidalgo will have sufficent funds. $ 234,402.57 at the end of the 14-year period. Hidalgo will have

EBK CONTEMPORARY FINANCIAL MANAGEMENT
EBK CONTEMPORARY FINANCIAL MANAGEMENT
14th Edition
ISBN:9781337514835
Author:MOYER
Publisher:MOYER
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 22P
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Hidalgo Barbers wants to have $230,000 in 14 years to build a second barbershop 14 years from today. Commencing two years from today, Hidalgo will make twelve annual deposits of $15,000 at the end of each year. Alternatively, the company can invest in a financial instrument earning 4% compounded annually. (Click the icon to view the Future Value of $1 table.) (Click the icon to view the Present Value of $1 table.) (Click the icon to view the Future Value of an Ordinary Annuity table.) (Click the icon to view the Future Value of an Annuity Due table.) (Click the icon to view the Present Value of an Ordinary Annuity table.) (Click the icon to view the Present Value of an Annuity Due table.) Read the requirement. (Use the present value and future value tables, the formula method, a financial calculator, or a spreadsheet for your calculations. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, X.XXXXX. Round your final answers to the nearest cent, $X.XX.) a. Will Hidalgo have sufficient funds to pay for the $230,000 barbershop at the end of the 14-year period if the deposits are made at the end of the year? No, Hidalgo will not have sufficient funds. Hidalgo will have 225,387.08 at the end of the 14-year period. b. Will Hidalgo have sufficient funds to pay for the $230,000 barbershop at the end of the 14-year period if the deposits are made at the beginning of each year? Yes, Hidalgo will have sufficent funds. $ 234,402.57 at the end of the 14-year period. Hidalgo will have
Transcribed Image Text:Hidalgo Barbers wants to have $230,000 in 14 years to build a second barbershop 14 years from today. Commencing two years from today, Hidalgo will make twelve annual deposits of $15,000 at the end of each year. Alternatively, the company can invest in a financial instrument earning 4% compounded annually. (Click the icon to view the Future Value of $1 table.) (Click the icon to view the Present Value of $1 table.) (Click the icon to view the Future Value of an Ordinary Annuity table.) (Click the icon to view the Future Value of an Annuity Due table.) (Click the icon to view the Present Value of an Ordinary Annuity table.) (Click the icon to view the Present Value of an Annuity Due table.) Read the requirement. (Use the present value and future value tables, the formula method, a financial calculator, or a spreadsheet for your calculations. If using present and future value tables or the formula method, use factor amounts rounded to five decimal places, X.XXXXX. Round your final answers to the nearest cent, $X.XX.) a. Will Hidalgo have sufficient funds to pay for the $230,000 barbershop at the end of the 14-year period if the deposits are made at the end of the year? No, Hidalgo will not have sufficient funds. Hidalgo will have 225,387.08 at the end of the 14-year period. b. Will Hidalgo have sufficient funds to pay for the $230,000 barbershop at the end of the 14-year period if the deposits are made at the beginning of each year? Yes, Hidalgo will have sufficent funds. $ 234,402.57 at the end of the 14-year period. Hidalgo will have
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