Poe Company is considering the purchase of new equipment costing $89,000. The projected annual cash inflows are $39,200, to be received at the end of each year. Themachine has a useful life of 4 years and no salvage value. Poe requires a 10% return on its investments. The present value of an annuity of 51 and present value of anannuity of $1 for different periods are presented below. Compute the net present value of the machine (rounded to the nearest whole dollar).Periods123Present Value of $1 Present Value of an Annuityat 10xof $1 at 10%0.90911.73552.48693.16990.90910.82640.75130.6830Multiple Choice$53,730$21106

When making investment decisions and capital budgeting, NPV is frequently used. In order to make…

Answered: Periods 1 2 Present Value of $1 Present…

Periods 1 2 Present Value of $1 Present Value of an Annuity at 10% of $1 at 10% 0.9091 0.8264 0.7513 0.6830 0.9091 1.7355 2.4869 3.1699

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Future value interest factor of an ordinary annuity of $1 per period at i% for n periods, FVIFA(i,n). 3.5% 4.0% 4.5% 8.0% 8.5% 9.5% Period 0.5% 1.0% 1.0000 1.0000 2.0050 2.0100 1 1.5% 2.0% 2.5% 1.0000 1.0000 1.0000 20150 2.0200 2.0250 2 3.2781 3 1.0000 2.0950 3.2940 4.6070 6.0446 4 7 8.1420 9.5491 8 9 10 16.3856 16 8699 18.5312 21.3843 24.5227 27.9750 31.7725 35.9497 26.9964 28.2129 30.8402 40.5447 45.5992 51.1591 57.2750 64.0025 71.4027 58.1767 76.7898 824164 3.0% 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 9.0% 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 2.0300 2.0350 2.0400 2.0450 2.0500 2.0550 2.0600 2.0650 2.0700 2.0750 2.0800 2.0850 2.0900 3.0150 3.0301 3.0452 3.0604 3.0756 3.0909 3.1062 3.1216 3.1370 3.1525 3.1680 3.1836 3.1992 3.2149 3.2306 3.2464 4.0301 4.0604 3.2622 4.0909 4.1216 4.1525 4.1836 4.2149 4.2465 4.2782 4.3101 4.3423 4.3746 4.4072 4.4399 4.4729 4.5061 4.5395 5 5.0503 4.5731 5.1010 5.1523 5.2040 5.2563 5.3091 5.3625 5.4163 5.4707…
Question 9 Calculate the nominal rate for each of the following general ordinary annuities given the present or future value of the annuity Note. Please make sure your final answer(s) are in percantage form and are accurate to 2 decimal places. For example 34 56% Periodic payments Payment interval Interest Compounding Present or Future frequency Term Rate value Every quarter year 12 years, 6 months 0.00% Every quarter year 12 years, 3 months 0.00% Semi-annually FV = $70,943.40 $800.00 Semi-annually PV = $30,946.62 $900.00 SAVE AND CLOSE
Crab Company is considering a project with an initial investment of $600,000 that is expected to produce cash inflows of $129,500 for ten years. Crab's required rate of return is 16%. (Click on the icon to view Present Value of $1 table.) E (Click on the icon to view Present Value of Ordinary Annuity of $1 table.) 14. What is the NPV of the project? 15. What is the IRR of the project? 16. Is this an acceptable project for Crab? 14. What is the NPV of the project? (Enter the factor amount to three decimal places, X.XXX. Round the present value of the annuity to the nearest whole dollar. Use parentheses or a minus sign for a negative net present value.) Net Cash Annuity PV Factor Present (i-16%, n=10) Value Years Inflow 1- 10 Present value of annuity Investment Net present value
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ests - X þver Reference Reference Present Value of Ordinary Annuity of $1 Present Value of $1 Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 0.905 0.820 | 0.744 0.676 0.614 | 0.558 0.508 Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% us Period 1 Period 2 Period 3 Period 4 Period 5 0.935 0.952 0.943 0.935 1.859 1.833 1.808 0.926 0.917 0.909 0.893 0.877 0.870 1.783 1.759 1.736 2.577 2.531 2.487 0.990 0.990 0.980 0.971 0.962 | 0.952 0.980 0.961 0.943 0.925 0.907 0.971 0.942 0.915 0.889 0.864 0.961 0.924 0.888 0.855 0.823 0.951 0.906 0.863 0.822 0.784 0.943 0.917 0.909 0.893 | 0.877 0.842 0.826 0.797 0.769 0.772 0.751 0.712 0.675 0.658 | 0.641 0.708 0.683 0.636 | 0.592 0.572 0.552 0.516 0.482 0.650 0.621 0.567 0.980 0.971 0.962 0.862 0.847 0.833 0.926 0.862 0.847 0.833 1.566 | 1.528 2.174 2.106 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 2.855 2.798…
Use the following Annuity Table for question Future Value of Ordinary Annuity of 1 Period 5% 6% 8% 10% 12% 1 1.00000 1.00000 1.00000 1.00000 1.00000 2 2.005000 2.06000 2.08000 2.10000 2.12000 3 3.15250 3.18360 3.24640 3.31000 3.37440 4 4.31013 4.37462 4.50611 4.64100 4.77933 5 5.52563 5.63709 5.86660 6.10510 6.35285 6 6.80191 6.97532 7.33592 7.71561 8.11519 7 8.14201 8.39384 8.92280 9.48717 10.08901 8 9.54911 9.89747 10.63663 11.43589 12.29969 9 11.02656 11.49132 12.48756 13.57948 14.77566 10 12.57789 13.18079 14.48656 15.93743 17.54874 Present Value of an Ordinary Annuity of 1 Period 5% 6% 8% 10% 12% 1 .95238 .94340 .92593 .90909 .89286 2 1.85941 1.83339 1.78326 1.73554 1.69005 3 2.72325 2.67301…
Solve the following problem using elther Table 11-1 or Table 11-2 from your text. When necessary, create new table factors. (Round new table factors to five decimal places, round dollars to the nearest cent and percents to the nearest hundredth of a percent) George Invests $12,875, at 6% interest, semiannually for 8 years. Calculate the compound amount for his investment. O $7,785.64 O $19,055.00 O $20,520.82 O $20,660.64
Grove Media plans to acquire production equipment for $845,000 that will be depreciated for tax purposes as follows: year 1, $329,000; year 2, $189,000; and in each of years 3 through 5, $109,000 per year. A 10 percent discount rate is appropriate for this asset, and the company's tax rate is 20 percent. Use Exhibit A.8 and Exhibit A.9. Required: a. Compute the present value of the tax shield resulting from depreciation. b. Compute the present value of the tax shield from depreciation assuming straight-line depreciation ($169,000 per year). Complete this question by entering your answers in the tabs below. Required A Required B Compute the present value of the tax shield resulting from depreciation. Note: Round PV factor to 3 decimal places. Present value of the tax shield
Use Table 12-1 to solve. Suppose a certain manufacturer deposits $7,000 at the beginning of each 3 month period for 8 years in an account paying 8% interest compounded quarterly. (Round your answers to the nearest cent.) (a) How much (in $) will be in the account at the end of the 8 year period? $ 315767 (b) What is the total amount (in $) of interest earned in this account? $ 91767
Using the annuity table, complete the following. (Use Table 13.2.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Interest Payment amount end of Frequency of payment Length of time PV of Annuity each period rate 1,330 Annually 8 years 8% acer %24
On Joe Martin's graduation from college, Joe's uncle promised him a gift of $11,400 in cash or $740 every quarter for the next 5 years after graduation. Assume money could be invested at 8% compounded quarterly. (Use Table 13.2.) a. Calculate the present value of options. (Do not round intermediate calculations. Round your answers to the nearest cent.) Present value Option 1 Option 2 b. Which offer is better for Joe? O Option 2 O Option 1
a. b. C. Annuity Annual Payment Rate $ 124,000 124,000 124,000 Interest Compounded 8% Annually 10% Annually 12% Annually Period Invested 6 years 6 years 6 years Present Value of Annuity