pplegate Industries is planning to expand its production facility in a few years. New plant onstruction costs are estimated to be $4.50 per square foot. The company invests 850,000 today at 8% interest compounded quarterly. - How many square feet of new facility could be built after 3 1/2 years? Number of years = Periods per year =| Nominal rate = Interest rate per period = Compounding periods = Table factor = Investment = Compound amount = Cost per square foot = Square feet = . If the company waits 5 years, but construction costs increase to $5.25 per square foot, how many square feet could be built? What do you recommend? Number of years = Compounding periods =| Table factor = | Compound amount = Cost per square foot = Square feet = %3D Recommendation:

pplegate Industries is planning to expand its production facility in a few years. New plant onstruction costs are estimated to be $4.50 per square foot. The company invests 850,000 today at 8% interest compounded quarterly. - How many square feet of new facility could be built after 3 1/2 years? Number of years = Periods per year =| Nominal rate = Interest rate per period = Compounding periods = Table factor = Investment = Compound amount = Cost per square foot = Square feet = . If the company waits 5 years, but construction costs increase to $5.25 per square foot, how many square feet could be built? What do you recommend? Number of years = Compounding periods =| Table factor = | Compound amount = Cost per square foot = Square feet = %3D Recommendation:

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

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A business worth $180,000 is expected to grow at 12% per year compounded annually for the next 4 years. (a) Find the expected future value. (b) If funds from the sale of the business today would be placed in an account yielding 8% compounded semiannually, what would be the minimum acceptable price for the business at this time?
Complete the problems below. 1. A company will need $40,000 in four years for a new addition. To meet the goal, the company will deposit money into an account paying 6% annual interest, compounded monthly. How much should the company deposit each month in order to be able to pay for the addition? Looking at a couple of scenarios to compare to the initial investment (above): a. Exactly 20 months after the company begins their investment (above), they receive a payment from a settled lawsuit of $2000 that they immediately deposit into the account. If they continue, uninterrupted, with their monthly deposits, will the company be able to afford to add a skylight to the addition if the change order (the amount added to the original cost of $40,000) is $3000? If yes, how much, if any would be left over? If no, how much more money will they need? b. Suppose that instead of depositing the money monthly for five years, they decide to finance the addition (the original $40,000) for four years at…
Suppose an industrial building can be purchased for $2,500,000 and is expected to yield cash flows of $180,000 in each of the next five years. (Note: assume payments are made at end of year.) If the building can be sold at the end of the fifth year for $2,800,000, calculate the IRR for this investment over the five-year holding period. A) 0.09%. B) 4.57%. C) 9.20%. Page 4 of 6 D) 10.37%
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The optical products division of Panasonic is planning a $3.5 million building expansion for manufacturing its powerful Lumix DMC digital zoom camera. If the company uses an interest rate of 16% per year, compounded monthly for all new investments, what is the uniform amount per month the company must make in order to recover its investment in 4 years? The uniform amount per month that the company must make in order to recover its investment in 4 years is $

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