How much money does Brian need to deposit now?
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Present Value and Future Value
Brian Inc. estimates that it will need $165,000 in 8 years to expand its manufacturing facilities. A bank has agreed to pay Brian 5% interest compounded annually if the company deposits the entire amount now needed to accumulate $165,000 in 8 years.
Use the appropriate present or future value table:
FV of $1, PV of $1, FV of Annuity of $1 and PV of Annuity of $1
Required:
How much money does Brian need to deposit now? Be sure to use all digits shown on the table and round your answer to a whole dollar.
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- Present value with periodic rates. Cooley Landscaping needs to borrow $25,000 for a new front-end dirt loader. The bank is willing to loan the money at 8% interest for the next 6 years with annual, semiannual, quarterly, or monthly payments. What are the different payments that Cooley Landscaping could choose for these different payment plans? C What is Cooley's payment for the loan at 8% interest for the next 6 years with annual payments? $ (Round to the nearest cent.)Q1/ Ipswich Corporation is considering an investment opportunity with the expected net cash inflows of $300,000 for four years. The residual value of the investment, at the end of four years, would be $70,000. The company uses a discount rate of 14%, and the initial investment is $290,000. Calculate the NPV of the investment. Present value of an ordinary annuity of $1: 12% 13% | 14% | 15% 0.893 0.885 0.877 0.87 2 1.69 |1.6681.647 1.626 32.402 2.361 2.322 2.283 43.037 2.974 2.914 2.855 3.605 3.517 3.4333.352 Present value of $1: 12% 13% | 14% | 15% 0.893 0.885 0.877 0.87 20.797 0.783 0.769|0.756 30.712 0.6930.675 0.658 40.636 0.6130.592|0.572 50.567 0.543 0.519|0.497Net Present Value Method—Annuity for a Service Company Amenity Hotels Inc. is considering the construction of a new hotel for $50 million. The expected life of the hotel is 25 years, with no residual value. The hotel is expected to earn revenues of $30 million per year. Total expenses, including depreciation, are expected to be $23 million per year. Amenity Hotels’ management has set a minimum acceptable rate of return of 14%. a. Determine the equal annual net cash flows from operating the hotel. Round to the nearest million dollars.$fill in the blank 1 million b. Compute the net present value of the new hotel. Use 6.87293 for the present value of an annuity of $1 at 14% for 25 periods. Round to the nearest million dollars. Net present value of hotel project: $fill in the blank 2 million
- What is the value today of receiving $5,000 at the end of each year for the next two years, assuming an interest rate of 10% compounded annually? ( FV of $1, PV of $1, FVA of $1, and PVA of $1). (Use appropriate factor(s) from the tables provided.) Multiple Choice $8,678 $6,828 $10,000 $10,500Net Present Value Method—Annuity Briggs Excavation Company is planning an investment of $170,200 for a bulldozer. The bulldozer is expected to operate for 1,000 hours per year for five years. Customers will be charged $120 per hour for bulldozer work. The bulldozer operator costs $29 per hour in wages and benefits. The bulldozer is expected to require annual maintenance costing $10,000. The bulldozer uses fuel that is expected to cost $38 per hour of bulldozer operation. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.352 2.991 6 4.917 4.355 4.111 3.784 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 a. Determine the equal annual net cash flows from operating the bulldozer. Use a minus…Net Present Value Method and Internal Rate of Return Method for a service company Buckeye Healthcare Corp. is proposing to spend $178,624 on a seven-year project that has estimated net cash flows of $32,000 for each of the seven years. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.352 2.991 6 4.917 4.355 4.111 3.784 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 a. Compute the net present value, using a rate of return of 10%. Use the table of present value of an annuity of $1 presented above. If required, round to the nearest dollar. Use the minus sign to indicate a negative net present value. Present value of annual net cash flows $fill in the blank 1 Less amount to be invested $fill…
- SUBJECT: ENGINEERING ECONOMICS (a) Identify the Given and the Unknown or what is being asked in the problem (b)Provide the formula to be used (c)Show the complete solution. The final answer is already provided. You plan to deposit P100 into a savings account at the end of each month for the next 5 years. a.)At 3% compounded monthly, how much will you have accumulated at the end of 5 years? b.)How much difference would it make if the payments were made at the beginning of the month rather than at the end? Answer: a.) F = P6,464.67, b.) F value difference = P196.63Please help me with show all calculation thankuWhen purchasing a $100,000 house, a borrower is comparing two loan alternatives. The first loan is an 80% loan at 4% with monthly payments of $591.75 for 15 years. The second loan is 90% loan at 5% with monthly payments of $526.13 over 25 years. What is the incremental cost of borrowing the extra money assuming the loan will be held for the full term? O 6.50% O 13.21% O 7.20% O 13.70%
- all asnwers with workingNet Present Value Method—Annuity Briggs Excavation Company is planning an investment of $94,900 for a bulldozer. The bulldozer is expected to operate for 1,000 hours per year for five years. Customers will be charged $110 per hour for bulldozer work. The bulldozer operator costs $31 per hour in wages and benefits. The bulldozer is expected to require annual maintenance costing $10,000. The bulldozer uses fuel that is expected to cost $41 per hour of bulldozer operation. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 a. Determine the equal annual net cash flows from operating the bulldozer. Use a minus…Net Present Value Method—Annuity Jones Excavation Company is planning an investment of $125,000 for a bulldozer. The bulldozer is expected to operate for 1,000 hours per year for five years. Customers will be charged $90 per hour for bulldozer work. The bulldozer operator costs $30 per hour in wages and benefits. The bulldozer is expected to require annual maintenance costing $7,500. The bulldozer uses fuel that is expected to cost $15 per hour of bulldozer operation. Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.353 2.991 6 4.917 4.355 4.111 3.785 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 a. Determine the equal annual net cash flows from operating the bulldozer. Jones…
