Identify the symbols involved if a pharmaceutical company wants to have a liability fund worth $200 million five years from now. Assume the company will invest an equal amount of money each year beginning one year from now and that the investments will earn 12% per year.

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

A:

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: Using the life cycle approach to financing, create a financial plan for a startup company that…

A: A company has mainly 2 options when it comes to financing. Equity and debt.  Equity which is…

Q: A company is considering purchasing new equipment. The purchase of the equipment is expected to…

A: The interest rate to be used for discounting the cash flows is 6%. The after tax savings of $12600…

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: DON Corp. is contemplating the purchase of a machine that will produce cash savings of $29,000 per…

A: Total present value = Present value of cash saving + Present value of residual cash realize…

Q: The management of Amex Corp. plans to meet a future capital expenditure by depositing $25,000 into a…

A: The present value of the investment is the amount that one invest in the current period. The future…

Q: GHA Co. made an investment of $10,000 and from this it will receive $800 annually for the next 18…

A: The present value of the annuity factor is used when there is an equal series of cash flows and the…

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

A: Future Value of Money Required = 200,000 Time Period = 5 years Interest  Rate = 10%   Future Value…

Q: Towson Industries is considering an investment of $496,800 that is expected to generate returns of…

A: In Simple terms, Under IRR Present Value of Cash Inflow = Cash Outflow

Q: ear investment yields a total return of 16.2%, and t yields a total return of 28.5%. If an initial…

A: Formulate the Problem:Objective function: Maximize…

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: 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: You see an opportunity to invest $1 million in a business.  The investment is expected to generate…

A: The objective of this question is to determine whether it would be a sound decision to invest $1…

Q: You see an opportunity to invest $1 million in a business. The investment is expected to generate a…

A: The objective of this question is to determine whether it would be a sound decision to invest $1…

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 considering a 10 year investment plan in which your target is $150,000. There are two…

A: We have to find the annuity that will result into a target FV after a pre determined time period.

Q: Gossman Corporation is analyzing a capital expenditure that will involve a cash outlay of P104,904.…

A: Internal Rate of Return is that rate at which Present Value of Cash Inflow is equal to Present value…

Q: A health clinic invests $578,467 in an endowment fund to support its community health program. They…

A: The future value is the formula used to evaluate the future value of today’s $1. It is calculated by…

Q: A contractor would like to invest in a real- estate development project and expecting to get $20,000…

A: Compounding interest rate is the rate applied on the initial amount invested or borrowed and the…

Q: A firm plans to invest in a new project that will last for four years and will generate revenues of…

A: Net-working capital is 15 % of the revenues.  Revenues are as follows: Year 1 =$1,000,000 Year 2 =…

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: A new transit company needs $108 million in initial capital funding, and promises a return to the…

A: Anticipated rate of return is the return which is expected to be generated from the project. If the…

Q: A local retail franchise must buy a new piece of equipment in 6 years that will cost $89,000. The…

A: Payment per period can be calculated using PMT function in excel.   PMT(rate, nper, pv, [fv],…

Q: An investor has the opportunity to invest in four new retail stores. The amount that can be invested…

A: Net Present Value or NPV Calculation used to evaluate the investment and financing decisions that…

Q: Jen Law Firm is evaluating a project that must create a revenue of $4,600 in the 1st year, $5,200 in…

A: Future worth refers to the value of the amount in future which is deposited or received today at…

Q: Ava Company projects an increase in net income of $34,766 each year for the next five years if it…

A: Annual rate of return on the investment = Net income / Initial investment

Q: What is the NPV for this investment.

A: Information provided: Cost of capital = 10% Year Cashflows 0 (175,000) 1 45,000 2 45,000…

Q: At the end of each year for the next 18 years you will receive cash flow of $3700 the initial…

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: The Stinch Fertilizer Corporation wants to accumulate $8,000,000 for plant expansion. The funds are…

A: Required annual amount refers to the amount required to be deposited at regular intervals. For this…

Q: firm has decided to make an investment, an ordinary annuity of $10,000 per year for fifteen years.…

A: Future value FACTOR ANNUITY =(1+r)n - 1/r r=interest rate =4% Period =15 years

Q: A mail order business will generate cash flows of $9,000 at the end of each of the next 3 years,…

A:

Q: An investor pays $275,000 for a mine that will produce level annual revenue for 18 years. What…

A: A "sinking fund" is money that is put aside specifically for a future expenditure of some kind. A…

Q: Calculate the present value of the cash savings: Samson Inc. is contemplating the purchase of a…

A: INTRODUCTION: In accounting, present value is the sum of future cash balances discounted to the…

Q: Jackson Clinic is starting an endowment fund to pay for the expenses of a allied health training…

A: The present value is the value of the sum received at time 0 or the current period. It is the value…

Q: One year ago, JK Mfg. deposited $20,839 in an investment account for the purpose of buying new…

A: The objective of the question is to calculate the future value of the investment account when JK…

Q: The Joshi Fish Farm (JFF), a saltwater aquarium company, is planning to expand its operations. It…

A: In this case, the principal is the amount invested, the interest rate is 6%, and the time is 3…

Q: A company plans on purchasing a new piece of equipment in six years. The equipment is expected to…

A: Compound interest is a method of calculating interest on the initial principal, which also includes…

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.