How much money does Brian need to deposit now?
Q: Cash payback period, net present value analysis, and qualitative considerations The plant manager of…
A: Capital budgeting refers to the concept used for estimating the viability of the project which can…
Q: Net Present Value Method and Internal Rate of Return Method for a service company Keystone…
A: Solution a: Computation of NPV - Keystone Healthcare Corporation Particulars Period Amount PV…
Q: Suppose that an income producing property is expected to yield cash flows for the owner of $10,000…
A: Present value is the current value of a future sum of money discounted using a specified rate of…
Q: Net Present Value-Unequal Lives Project 1 requires an original investment of $57,000. The project…
A: Present value of project is calculated by using the following formula P.V of Project = present…
Q: An investment costing $10,000 today promises to repay investors $6,000 per annum for the next two…
A: If NPV of project is positive, Project must be accepted. If NPV of project is negative, Project must…
Q: Amenity Hotels Inc. is considering the construction of a new hotel for $63 million. The expected…
A: Annual depreciation = (Cost of assets - residual value) / Life of the assets =(63-0)/8 = $7.88…
Q: Project 1 requires an original investment of $219,120. The project will yield cash flows of $74,000…
A: Net present value of Project 1 = Present value of cash inflows + Present value of salvage value -…
Q: Fill the correct inputs on the T184 finance application to determine what initial investment would…
A: Given: Future value = $28,000 Interest rate = 2.14% Years = 3
Q: Net Present Value Method—Annuity for a Service Company Amenity Hotels Inc. is considering the…
A: Given information: Cost of hotel = $80 million Useful life of hotel = 5 years Salvage value = 0…
Q: A company is considering an iron ore extraction project that requires an initial investment of…
A: The internal rate of return is the minimum rate of return that should be earned by a company to…
Q: You purchase a mixed use building in Queens that is expected to generate $845209 net operating…
A: An interest-only mortgage where interest payments are solely paid for the first several years of the…
Q: Compute the following: a. The average rate of return, giving effect to straight-line depreciation…
A: Requirement a:
Q: 2. Project A requires an investment of $5,000 today and pays $3,000 at the end of year 1 and $4,000…
A: NPV means PV of net benefits which will arises from the project in coming years. It is equal to the…
Q: Take a Load Off Hotels is considering the construction of a new hotel for $12,000,000. The expected…
A: Capital budgeting is the process to select a profitable long term investment project. The net…
Q: Net Present Value Method-Annuity for a Service Company Welcome Inn Hotels is considering the…
A:
Q: Project 1 requires an original investment of $55,900. The project will yield cash flows of $11,000…
A: Net present value is the present value of cash flow minus initial investment.
Q: Determine the number of operating hours such that the present value of cash flows equals the amount…
A: Since, the answer is already mentioned in part a, b and c. Therefore, I will provide the solution…
Q: Net present value A project has estimated annual net cash flows of $10,000 for 2 years and is…
A: NPV of a project refers to the profitability of the project calculated by discounting the future…
Q: (Annuity payments) The Aggarwal Corporation needs to save $15 million to retire a(n) $15 million…
A:
Q: Net Present Value Method—Annuity Jones Excavation Company is planning an investment of $162,800 for…
A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…
Q: ompound intere
A: Loan 1 : Principal Amount ( P1)= Rp. 500 million Compound Interest on P1 (r1)= 10 %p.a. Time period…
Q: (Annuity payments) The Aggarwal Corporation needs to save $10 million to retire a(n) $10 million…
A: The time value of money is a concept in finance that takes into account the effect of compounding to…
Q: Net Present Value Method–Annuity for a Service Company Amenity Hotels Inc. is considering the…
A: Calculate annual depreciation as follows: The annual depreciation on the new hotel is $7 million.…
Q: Average Rate of Return, Cash Payback Period, Net Present Value Method for a Service Company Spanish…
A: Cost of Equipment = $132,000 Residual Value = $0 Useful Life = 10 years Annual Depreciation =…
Q: 10 7.360 6.145 5.650 5.019 4.192 Determine (a) the net present value of the project and (b) the…
A: Information Provided: MARR = 10% Annual net CF = $8750 Estimated cost = $30,000
Q: Net Present Value Method—Annuity Briggs Excavation Company is planning an investment of $342,100…
A: Note: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question…
Q: Net Present Value Method—Annuity Briggs Excavation Company is planning an investment of $474,400…
A: Annual net cash flow means the difference between cash inflow and cash outflow for the given…
Q: Net Present Value Method-Annuity Amenity Hotels Inc. is considering the construction of a new hotel…
A: NPV stands for "Net Present Value." It is a financial metric used to evaluate the profitability of…
Q: Caldwell Corporation is considering an investment proposal that will require an initial outlay of…
A: Net present value (NPV) :— It is the difference between present value the of net cash flows and…
Q: ABC Company estimated that it can generate $42,000 per year in additional cash inflows for the next…
A: The Present Value of additional cash flows: The Present Value of additional cash flows is computed…
Q: cost of $100,000. Table Top wants to know how = cost in 5 years. Which table should Table Top use…
A: Present value is the amount of money that must be invested in the present to achive a future…
Q: Net Present Value A project has estimated annual net cash flows of $7,500 for three years and is…
A: NPV = PV of cash inflows - initial cost PV = PV factor * cash inflows per annum Since project has 3…
Q: Average rate of return, cash payback period, net present value method for a service company The St.…
A: Net present value is the difference between present value of annual net cash flows and amount…
Q: A manufacturer needs to borrow money to purchase a building. The purchase price of the building is…
A: given, purchase price = $1.5 million = 1500,000 downpayment = $300,000 rate =4.85% n =20 years
Q: Net Present Value Method
A: Equal annual net cash flows = Revenue earned - Expenses including depreciation + Depreciation
Q: Net Present Value—Unequal Lives Project A requires an original investment of $97,800. The project…
A: Time value of money :— According to this concept, value of money in present day is greater than the…
Q: Internal Rate of Return A project is estimated to cost $507,840 and provide annual net cash flows of…
A: At IRR Net present value is zero. It means At IRR present value of cash inflows is equal to…
Q: Net Present Value A project has estimated annual net cash flows of $13,750 for three years and is…
A: Initial investment = $30,000 Annual cash inflow = $13,750 Time (n) = 3 years Interest rate (i) = 15%…
Q: eBook Project L costs $45,000, its expected cash inflows are $11,000 per year for 8 years, and its…
A: Information Provided: Costs = $45,000 Cash Inflows = $11,000 Term = 8 years WACC = 8%
Q: A project has estimated annual net cash flows of $15,000 for three years and is estimated to cost…
A: Net present value of the Project = Present value of net cash inflow - initial investment where,…
Q: Present value with periodic rates. Cooley Landscaping needs to borrow $25,000 for a new front-end…
A: When the borrower borrows a loan from the lender, he has to pay a rate of interest on the borrowed…
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.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Net Present Value A project has estimated annual net cash flows of $7,500 for three years and is estimated to cost $45,000. Assume a minimum acceptable rate of return of 10%. Use the Present Value of an Annuity of $1 at Compound Interest table below. 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 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 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 Determine (a) the net present value of the project and (b) the present value index. If required, use the minus sign to indicate a negative net present value. Net present value of the project (round to the nearest dollar) Present value index (rounded to two decimal places)A property worth $16 million can be refinanced with an 85% loan at 9.5% over 20 years. The balance on the current loan is $12,148,566. Loan payments are $113,302 per month. The loan balance in 10 years will be $8,396,769. If the property is expected to be sold in 10 years, what is the incremental cost of refinancing? a)11.18% b)12.42% c) 10.45% d) 10.94%Using the previous table, enter the correct factor for three periods at 5%: Periodic payment x Factor = Present value $6,000 x = $16,338 The controller at Ross has determined that the company could save $6,000 per year in engineering costs by purchasing a new machine. The new machine would last 12 years and provide the aforementioned annual monetary benefit throughout its entire life. Assuming the interest rate at which Ross purchases this type of machinery is 9%, what is the maximum amount the company should pay for the machine? $fill in the blank 5aca5ff34fa005f_2 (Hint: This is basically a present value of an ordinary annuity problem as highlighted above.) Assume that the actual cost of the machine is $50,000. Weighing the present value of the benefits against the cost of the machine, should Ross purchase this piece of machinery? Use snippets to answer
- Your company is considering purchasing an expensive plece of equipment. The manufacturer of the equipment offers a payment plan to pay $100,000 annually for 4 years. Assuming no other cash flow, the first payment is due at the end of the first year, and an interest rate of 6%, the minimum Present amount of money you will need is most nearly O $370,000 O $380.000 O 390.000 O 5400,000 O 5410.000 O S420.000Net present value—unequal lives Project 1 requires an original investment of $375,000. The project will yield cash flows of $90,000 per year for 8 years. Project 2 has a computed net present value of $50,000 over a 6-year life. Project 1 could be sold at the end of 6 years for a price of $40,000. Use the Present Value of $1 at Compound Interest and the Present Value of an Annuity of $1 at Compound Interest tables shown below. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 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…4. Develop ATCF table for Problem 3, if 50% of the initial investment is borrowed at 5% interest rate per year to be paid back in 4 equal installments. (No need to calculate PW) 3. An investment of $500,000 generates an annual income of$150,000 over the next4 years with a salvage value of$200,000. At MARR-10% is this a good investment (by computing P.W. factor)? The effective tax rate is 40% and MACRS depreciation with depreciation life of 3 years is employed.
- Net Present Value A project has estimated annual net cash flows of $13,750 for three years and is estimated to cost $30,000. Assume a minimum acceptable rate of return of 15%. Use the Present Value of an Annuity of $1 at Compound Interest table below. 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 Determine (a) the net present value of the project and (b) the present value index. If required, use the minus sign to indicate a negative net present value. Net present value of the project (round to the nearest dollar) Present value index (rounded to two decimal places)Project A costs $5,300 and will generate annual after-tax net cash inflows of $1,900 for five years. What is the NPV using 5% as the discount rate? Round your present value factor to three decimal places and final answer to the nearest dollar. (Click here to see present value and future value tables) 2,928 xNet Present Value A project has estimated annual net cash flows of $6,250 for eight years and is estimated to cost $37,500. Assume a minimum acceptable rate of return of 15%. Use the Present Value of an Annuity of $1 at Compound Interest table below. 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 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 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 Determine (a) the net present value of the project and (b) the present value index. If required, use the minus sign to indicate a negative net present value. Net present value of the project (round to the nearest dollar) Present value index (rounded to two decimal places) Feedback V Check My Work a. Multiply the present value factor for an annuity of…
- 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.)Net Present Value Method—Annuity Briggs Excavation Company is planning an investment of $567,200 for a bulldozer. The bulldozer is expected to operate for 3,000 hours per year for eight 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 $30,000. 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 3.353 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…A company has had record profits and decided to use some of the profits to pay for manufacturing improvements. If the company can invest $1,600,000.00 in an a annuity will that will make payments at the beginning of every six months for 4 years. If the annuity pays 5.6%, compounded semi-annual. What is the size of payments that the company can expect?The payment amount will be $. (Round to 2 decimal places.)
