Mike Macaro is selling a piece of land. Two offers are on the table. Morton Company offered a $46,000 down payment and $35,600 a year for the next 5 years. Flynn Company offered $28,000 down and $38,600 a year for the next 5 years. Assume money can be invested at 8% compounded annually. (Use Table 13.2) a. What is the value of the offers? (Do not round intermediate calculations. Round your answers to the nearest cent.) Value Morton Company Flynn Company b. Which offer is better for Mike?
Mike Macaro is selling a piece of land. Two offers are on the table. Morton Company offered a $46,000 down payment and $35,600 a year for the next 5 years. Flynn Company offered $28,000 down and $38,600 a year for the next 5 years. Assume money can be invested at 8% compounded annually. (Use Table 13.2) a. What is the value of the offers? (Do not round intermediate calculations. Round your answers to the nearest cent.) Value Morton Company Flynn Company b. Which offer is better for Mike?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:TABLE
13-2
Present value of an annuity of $1
Perlod
2%
3%
4%
5%
6%
7%
8%
9%
10%
11%
12%
13%
1
0.9804
0.9709
0.9615
0.9524
0.9434
0.9346
0.9259
0.9174
0.9091
0.9009
0.8929
0.8850
1.9416
1.9135
1.8861
1.8594
1.8334
1.8080
1.7833
1.7591
1.7355
1.7125
1.6901
1.6681
2.8839
2.8286
2.7751
2.7232
2.6730
2.6243
2.5771
2.5313
2.4869
2.4437
2.4018
2.3612
4
3.8077
3.7171
3.6299
3.5459
3.4651
3.3872
3.3121
3.2397
3.1699
3.1024
3.0373
2.9745
4.7 134
4.5797
4.4518
4.3295
4.2124
4.1002
3.9927
3.8897
3.7908
3.6959
3.6048
3.5172
5.6014
5.4172
5.2421
5.0757
4.9173
4.7665
4.6229
4.4859
4.3553
4.2305
4.1114
3.9975
6.4720
6.2303
6.0021
5.7864
5.5824
5.3893
5.2064
5.0330
4.8684
4.7122
4.5638
4.4226
8.
7.3255
7.0197
6.7327
6.4632
6.2098
5.97 13
5.7466
5.5348
5.3349
5.1461
4.9676
4.7988
6.
8.1622
7.7861
7.4353
7.1078
6.8017
6.5152
6.2469
5.9952
5.7590
5.5370
5.3282
5.1317
10
8.9826
8.5302
8.1109
7.7217
7.3601
7.0236
6.7101
6.4177
6.1446
5.8892
5.6502
5.4262
11
9.7868
9.2526
8.7605
8.3064
7.8869
7.4987
7.1390
6.8052
6.4951
6.2065
5.9377
5.6869
12
10.5753
9.9540
9.3851
8.8632
8.3838
7.9427
7.5361
7.1607
6.8137
6.4924
6.1944
5.9176
13
11.3483
10.6350
9.9856
9.3936
8.8527
8.3576
7.9038
7.4869
7.1034
6.7499
6.4235
6.1218
14
12.1062
11.2961
10.5631
9.8986
9.2950
8.7455
8.2442
7.7862
7.3667
6.9819
6.6282
6.3025
15
12.8492
11.9379
11.1184
10.3796
9.7122
9.1079
8.5595
8.0607
7.6061
7.1909
6.8109
6.4624
16
13.5777
12.5611
11.6523
10.8378
10.1059
9.4466
8.8514
8.3126
7.8237
7.3792
6.9740
6.6039
17
14.2918
13.1661
12.1657
11.2741
10.4773
9.7632
9.1216
8.5436
8.0216
7.5488
7.1196
6.7291
18
14.9920
13.7535
12.6593
11.6896
10.8276
10.0591
9.37 19
8.7556
8.2014
7.7016
7.2497
6.8399
19
15.6784
14.3238
13.1339
12.0853
11.1581
10.3356
9.6036
8.9501
8.3649
7.8393
7.3658
6.9380
20
16.3514
14.8775
13.5903
12.4622
11.4699
10.5940
9.8181
9.1285
8.5136
7.9633
7.4694
7.0248
25
19.5234
17.4131
15.6221
14.0939
12.7834
11.6536
10.6748
9.8226
9.0770
8.4217
7.8431
7.3300
30
22.3964
19.6004
17.2920
15.3724
13.7648
12.4090
11.2578
10.2737
9.4269
8.6938
8.0552
7.4957
40
27.3554
23.1148
19.7928
17.1591
15.0463
13.3317
11.9246
10.7574
9.7790
8.9511
8.2438
7.6344
50
31.4236
25.7298
21.4822
18.2559
15.7619
13.8007
12.2335
10.9617
9.9148
9.0417
8.3045
7.6752
3.
LO
Transcribed Image Text:Mike Macaro is selling a piece of land. Two offers are on the table. Morton Company offered a $46,000 down payment and $35,600 a
year for the next 5 years. Flynn Company offered $28,000 down and $38,600 a year for the next 5 years. Assume money can be
invested at 8% compounded annually. (Use Table 13.2.)
a. What is the value of the offers? (Do not round intermediate calculations. Round your answers to the nearest cent.)
Value
Morton Company
Flynn Company
b. Which offer is better for Mike?
O Flynn Company
O Morton Company
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!
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education