Torbet Fish Packing Company wants to accumulate enough money over the next 12years to pay for the expected replacement of its digitalized, automated scalingmachine. The new machine is expected to cost $240,000 in 12 years. Torbet currentlyhas $15,000 that it plans to invest over the next 12 years to help pay for the newmachine. Torbet wants to put away an equal, end-of-year amount into a sinking fundinvestment account at the end of each of the next 12 years. Earnings on all of theinvestments are expected to be 8 percent for the first six years and 10 percentthereafter. What equal, end-of-year amount must Torbet save each year over the next12 years to meet these needs? Use Table I and Table III or a financial calculator toanswer the question. Round your answer to the nearest dollar.

Step 1: Calculate the Future Value of the Initial InvestmentTorbet has $15,000 to invest now. This…

Answered: Torbet Fish Packing Company wants to…

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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The Joshi Fish Farm (JFF), a saltwater aquarium company, is planning to expand its operations. It anticipates that an expansion will be undertaken in 3 years. In anticipation of the expansion, JFF invests money into a mutual fund that earns 6% compounded annually to finance the expansion. At the end of year 1, they invest $100,000. They increase the amount of their investment by $25,000 each year. How much will JFF have at the end of 3 years so that it can pay for the expansion?
A firm wants to sponsor a new engineering lab at a local university. This requires $4M to construct the lab, $1.5M to equip it, and $750,000 every 6 years for new equipment. What is the required endowment if the university will earn 8% interest on the funds? Answer: $6,777,957
Torbet Fish Packing Company wants to accumulate enough money over the next 10 years to pay for the expected replacement of its digitalized, automated scaling machine. The new machine is expected to cost $150,000 in 10 years. Torbet currently has $13,000 that it plans to invest over the next 10 years to help pay for the new machine. Torbet wants to put away an equal, end-of-year amount into a sinking fund investment account at the end of each of the next 10 years. Earnings on all of the investments are expected to be 7 percent for the first five years and 9 percent thereafter. What equal, end-of-year amount must Torbet save each year over the next 10 years to meet these needs?
Boseman Department Store is considering the purchase of a new machine at a cost of $22,802. The machine will provide $3,500 per year in cash flow for nine years. Boseman has a cost of capital of 10%. (Round discount factor to five decimal places.) Based on the internal control method, should this project be undertaken? A partial table of the present value of an annuity of $1 in arrears is as follows: Year 1% 3% 5% 7% 9% 11% 13% 15% 9 8.56602 7.78611 7.10782 6.51523 5.99525 5.5370 5.1317 4.7716 What is the internal rate of return for this investment? (Round discount factor to five decimal places.)
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Dog Care Co. wants to finance a new animal shelter by making eight annual deposits into a fund earning 11% compounded annually. The first four deposits are to be $19,000 each and will be paid at the beginning of the next four years. The last four deposits are to be $27,000 each and will be paid at the beginning of the last four years. The cost of the new animal shelter amounts to:
Vijay
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