Answered: How much money should be deposited each…

How much money should be deposited each quarter into the fund so that a new storage building can be added after 5 years?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: What is the annually compounded interest rate for the fund during the final 30 years?

Q: luti

A: Present value is also known as a present discounted value, in which the future value of cash inflows…

Q: Manatee Corporation wants to withdraw $500,000 (including principal) from an investment fund at the…

A: Present Value Given a certain rate of return, the present value (PV) of a future amount of money or…

Q: 1. A construction equipment with no salvage is to be replaced at the end of 12years from now at a…

A: In the given question, the future value of annuity is 800,000. Annual Rate of Interest is 15%. But…

Q: A company wants to accumulate a sum of money to repay certain debts due in the future. The company…

A: To calculate the future value of a series of cash flows, you can use the future value of an annuity…

Q: Luxury Yacht company is preparing to buy a new yacht estimated to cost $750000 by making equal…

A: We have to find the annuity whose FV will result into a target value. In the target accumulated…

Q: "To pay off $66000000 worth of new construction bonds when they come due in 31 years, a water…

A: Future value required (FV) = $ 66000000 Interest rate = 6.7% Quarterly interest rate (r) = 6.7%/4 =…

Q: a 350 million was deposited in the bank to take care for the perpetual operation of a public…

A: This inquiry explores public transportation system finance management, specifically how to use a…

Q: A company project needs to establish a fund within a ten-year period by making annual deposits of…

A: Beginning of the year deposits (B) = P 90000 Let the end of the year deposits = X r = 6.2% n = 10…

Q: Recent sales of some real estate and record profits make it possible for a manufacturer to set aside…

A: Present value of fund (PV) = $ 1,100,000 Interest rate = 6.3% Semi annual rate (r) = 6.3%/2 = 3.15%…

Q: McCarthy Construction is trying to bring the company-funded portion of its employee retirement fund…

A: Formula for calculating present worth:P=A11-1+g1+ini-gwhere,A1 is initial cashflown=no. of…

Q: A new generator has been installed. There will be no maintenance cost until the end of the sixth…

A: Initially, total value shall be calculated for future expenses at the end of year 5 and then such…

Q: One university needs some maintenance. The owner of the university decides to deposit $400000 in an…

A: Present worth can be calculated as below Present worth = Cash flow / (1+r)^n It can also be…

Q: engineering company expects to expand its plant facilities in 6 years at an estimated cost of…

A: a) Solved using Financial Calculator N = 6 years * 4 = 24 I/Y = 10%/4 = 2.5% FV = 68,000 CPT PMT =…

Q: A start-up engineering company invested in a fund that promises 14% interest

A: Fund value at future date is calculated by future value of annuity formula. Future Value is…

Q: The sum P350,000 will be needed at the end of 3 years. If money can be invested at 5% compounded…

A: We need to fist determine the semi annual end of period payment that will accumulate to the desired…

Q: A company needs to buy a building in 4 years, and must fund the down payment from its profits. The…

A: For availing a loan for an asset, a person is required to pay some amount as down payment. Down…

Q: re to made to the fund

A: Money Required (Future Value) = 40,000 Present Value (value at start) = 0 N = 3 years Quarterly…

Q: You are assigned with building a laboratory. Construction and equipment will cost you $1 million…

A: The perpetuity refers to the series of regular payments and receipts that last forever. The present…

Q: An apartment complex decided to set up a sinking fund to accumulate $50,000 by the end of 4 years to…

A: Solution:- When an equal amount is deposited each period, it is called ordinary annuity. We know,…

Q: A local Dunkin’ Donuts franchise must buy a new piece of equipment in 4 years that will cost…

A: Future value required (FV) = $81000 Interest rate = 16% Quarterly interest rate (r) = 16%/4 = 4%…

Q: An investment company wants to establish a sinking fund to pay off debts of $85 million which come…

A: Formulas: Future value = amount*((1+rate)^years - 1) / Rate

Q: In order to have ₱1 million in a fund at the end of 15 years, how much must be deposited in the fund…

A: Future value (FV) is ₱1,000,000. The maturity period is 15 years. The interest rate is 10.5%. The…

Q: Isaac Lopez Integrated School needs P20,000,000 to pay building renovation for 6 years. To generate…

A: Amount required after 6 years (FV) = P20,000,000 Interest rate (r) = 0.18 Number of annual payments…

Q: A small company wishes to set up a fund th can be used for technology purchases over the next 6…

A: When the annuity amount is growing at a constant rate, present value of growing annuity formula is…

Q: A condominium association decided to set up a sinking fund to accumulate $70,000 by the end of 3…

A: Data given: FV=$70,000 N=3 year nper=3year *4 =12 Rate=4.2% (compounded quarterly) Quarterly…

Q: A business must raise $70,000 in 5 years. What should be the size of the owners' quarterly payment…

A: Future value = $70,000Period = 5 years Interest rate = 3%

Q: A company establishes a sinking fund to cover planned maintenance, budgeting f $50,000 in 10 years.…

A: Sinking funds are the amount of deposits required to meet the the future obligation of the company…

Q: A municipality decides to purchase a small collection truck that has an expected life of 10 years of…

A: Installment is the amount of periodic payments a borrower makes to its lender in order to pay back…

Q: A company makes fixed annual payments to a sinking fund to replace equipment in five years' time for…

A: Variables in the question:FV=£ 100,000Interest rate (i)=12% =0.12n=5 years

Q: (From section 6.1) SouthWestern airlines sets up a sinking fund so that they will have $75,500 to…

A: Hi there, Thanks for posting the questions. As per our Q&A guidelines, the solution for first…

Q: a project that will last for a long period of time. years from now, annual maintenance would b 0,000…

A: As we can see that the cost part comes only within the 4th year and we only have 5 years once the…

Q: A building is expected to require $1,000,000 in capital improvement expenditures in five years (60…

A: A building is expected to require (T) = $1,000,000In the duration (t) = 60 months.In 1st month a is…

Question

100%

9.) To add a new storage building The Fast Hauling Company will need $1,000,000 in 5 years. They plan to make quarterly payments into a sinking fund at 8.5 percent interest compounded quarterly. How much money should be deposited each quarter into the fund so that a new storage building can be added after 5 years? (answer in the whole number)

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

(c) A sum of 10,000 RO is required in 5 yoars from now. An annual sinking fund is to be sot up that will return an interest rate of 6% over this period. What will be the annual sinking fund instalments?
An investment of 1000 is to be used to make payments of 100 at the end of every year for as long as possible. If the fund earns an annual effective rate of interest of 6%, find how many regular payments can be made. Also, find the amount of the smaller payment to be paid on the date of the last regular payment to be paid one year after the last regular payment
Dog Care Co. wants to finance a new animal shelter by making eight annual deposits into a fund earning 11% compounded annually. The first four deposits are to be $19,000 each and will be paid at the beginning of the next four years. The last four deposits are to be $27,000 each and will be paid at the beginning of the last four years. The cost of the new animal shelter amounts to:
Drexter's Shop wants to start a fund to accumulate half of the expected P600,000 cost of expanding their facilities in 8 years. What semiannually account must be paid into the fund earning 6% compounded quarterly in order to reach the target?
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.)
We are funding an organization for ten years. The first payment will be made one year from today (end of year one) and will be $8,350. Each year after that, the organization will receive payment from us annually. The payment will increase at a rate of 2% per year after the second payment. If the annual interest rate is 15%, what is the present value of this endowment?
lipp Eenvocaitlido (sto vasgmo toddA vrupa ehemwo Isto epaims3 banieren 0018 rommo yllupa atamwo coitilidsi leto sidsys 12510 notu 18101 Bunsyall bamsenU eldsys112910in Question 5 Use the following information to complete all subsections of this ecilitidei question: Margo Corporation is a major producer of lawn care products. Its stock currently sells for $80 per share; there are 10.5 million shares outstanding. Margo also has debt outstanding with a book value of $400 million. Margo bonds currently yield 10% and trade at 90% of face value. The risk-free rate is 8%, the market risk premium is 9%, and Margo has beta equal to 2. The corporate tax rate is 34%.
A small company wishes to set up a fund that can be used for technology purchases over the next 6 years. Their forecast is for $9,000 to be needed at the end of year 1, increasing by 5% each year thereafter. The fund earns 10% per year. How much money must be deposited to the fund at the end of year 0 to just deplete the fund after the last withdrawal?
A firm needs to replace most of its machinery in 4 years at a cost of $590,000. The company wishes to create a sinking fund to have this money available in 4 years. How much should the monthly deposits be if the fund earns 5% compounded monthly?
A major city wants to establish a sinking fund to pay off debts of PKR 800 million which come due in 10 years. The city can earn interest at the rate of 8 percent per year compounded monthly. If first deposit is made 1 month from now; What monthly deposit will be required to accumulate the PKR 800 million? How much interest will be earned on these deposits