Problem 6. Including loan The following investment alternatives are being evaluated. Assuming that there is only $30,000 available and the surplus will be acquired through a loan at 5.5% annual effective interest payable in annual payments over 4 years. Determine which alternative should be selected. Perform the analysis using the Present Value, Equivalent Annuity and IRR Methods. Use a MARR = 7% Year A B 0 -25000 -46000 1 7460 16640 2 7460 16640 3 7460 16640 4 6500 12600 5 6000 10600

Problem 6. Including loan The following investment alternatives are being evaluated. Assuming that there is only $30,000 available and the surplus will be acquired through a loan at 5.5% annual effective interest payable in annual payments over 4 years. Determine which alternative should be selected. Perform the analysis using the Present Value, Equivalent Annuity and IRR Methods. Use a MARR = 7% Year A B 0 -25000 -46000 1 7460 16640 2 7460 16640 3 7460 16640 4 6500 12600 5 6000 10600

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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Use the following table, Present Value of an Annuity of 1 Period 8% 9% 10% 1.926.917 .909 2 1.783 1.759 1.736 3 2.577 2.531 2.487 A company has a minimum required rate of return of 9%. It is considering investing in a project which costs $350,000 and is expected to generate cash inflows of $140,000 at the end of each year for three years. The net present value of this project is ? $354,340. $4,340. $70,000. $35,436.
Valuation of Financial Instruments / Determine knowledge An annuity due pays $120,000 each year for 80 years. If the going rate of interest is 40 percent per year, the present value of this annuity due is $ Use the following formulas to complete this problem: PV=PMT [1-(1+r))) / r]*(1+3) or =PV (Rate, Nper, PMT, FV, Type).
Solution give
Engineering Economics (Annuity) An ordinary annuity paying P1,811 at the end of each year for 15 years, is to be converted to an annuity paying an amount at the beginning of each month for 15 years. Money is worth 10% compounded annually. Determine the Future value of the payment and the amount being paid at the beginning of each month for 15 years? note: include cash flow diagram and complete/readable solution for this problem, this is 100% upvote guaranteed
j. Find the PV and the FV of an investment that makes the following end-of-year payments. The interest rate is 8%. Year 1 $100, Year 2 $200, Year 3 $400 Year Payment 1 100 2 200 3 400 Rate 8% To find the PV, use the NPV function: Pv= $581.59 Year Payment x (1+ I)^(N- t) = FV 1 100 2 200 3 400
Part B: Solve the following excersises: 1) Consider the following timeline where the firm requires the annuity to provide a minimum return of.....%. (write any number for interest rate): Project A End of Yoar -50,000 15,000 15,000 15,000 15,000 Calculate Future Value (FV) using two methods (Timeline and Equation) and compare the answers.
Use the following 8% interest factors. Present Value ofOrdinary Annuity Future Value ofOrdinary Annuity 7 periods 5.20637 8.92280 8 periods 5.74664 10.63663 9 periods 6.24689 12.48756 What amount should be recorded as the cost of a machine purchased December 31, 2020, which is to be financed by making 8 annual payments of $21500 each beginning December 31, 2021? The applicable interest rate is 8%. A.)$150500 B.)$228688 C.)$134308 D.)$123553
D1. Account
Problem 1: Read each problem carefully and answer each question to solve the problem. Find the period of deferral in each of the following deferral annuity problems (one way to find the period of deferral is to count the numnber of artificial payment (k). Make a diagram 1. Payment of P 3,000.00 every 3 months for 8 years that will start 6 years Time Diagram Answer
Q.1: Using amortization payments and suppose borrow $20000 at 8% compound annual interest to be repaid over 5 years and answer the following:
Use the following 8% interest factors to answer the question below: Future Value of Ordinary Annuity. 8.92280 10.63663 12.48756 What amount should be recorded as the cost of a machine purchased December 31, 2023, which is to be financed by making 8 annual payments of $10,000? Each payment is made at the end of the period. The applicable interest rate is 8%. Present Value of Ordinary Annuity. 5.2064 5.7466 6.2469 7 periods 8 periods 9 periods hs
A borrower looking to borrow $100,000 can obtain an 80 percent loan with an 8 percent interest rate and monthly payments. The loan is to be fully amortized over 25 years. Alternatively, he could obtain a 90 percent loan at an 10 percent rate with the same loan term. What is the incremental ANNUAL cost of borrowing the additional funds? 20.13 17.42 23.98 18.19

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