1.

Assuming the interest rate is 4%, what is the present value of a $1,800 payment you will receive in:

Do not enter dollar signs or commas in the input boxes. Use the PV tables in the appendix at the end of the book. Round all answers to the nearest whole number. a) 4 years? $Answer

b) 6 years? $Answer

c) 10 years? $Answer

2.

Use the information in the table to calculate the present value of the annuity:

Annual Payment	$51900
Discount Rate	10%
Number of Years	6

Do not enter dollar signs or commas in the input boxes. Use the PV tables in the appendix of the textbook. Round your answer to the nearest whole number. Present Value: $Answer

3.

Fill in the blanks for each of the following independent scenarios (A-D).

Do not enter dollar signs or commas in the input boxes. Round all answers to the nearest whole number.

Scenario	A	B	C	D
Future Value (Single Payment)	$56,000.00	$17,000.00	$22,700.00	$11,000.00
Discount Rate	5%	Answer%	Answer%	12%
Number of Years	Answer	10	7	Answer
Present Value Factor	0.6139	0.3522	0.5835	0.2567
Present Value	$Answer	$5,987.40	$Answer	$2,823.70

4.

The following table indicates the net cash flows of a capital asset:

Year	Net Cash Flow
0	$-12,100
1	$4,800
2	$6,800

Do not enter dollar signs or commas in the input boxes. Use the negative sign where appropriate. Round the factor to 4 decimal places and the NPV to the nearest whole number. Assume the required rate of return is 14%. Determine the net present value of this asset.

Year	Net Cash Flow	Factor	Net Present Value
0	$-12,100	Answer	$Answer
1	$4,800	Answer	$Answer
2	$6,800	Answer	$Answer
Total			$Answer

5.

Tippy Toe Spa Company offers various services, such as facials, laser hair removal and microdermabrasion. Currently, the company is considering purchasing the following spa equipment:

	Laser Hair Removal Machines	Microdermabrasion Machines	Facial Oxygen Units
Cost per Machine	$65,900	$29,900	$24,800
Annual Cash Inflow	$124,300	$211,300	$40,600
Annual Cash Outflow	$91,100	$198,800	$29,000
Required Rate of Return	10%	11%	4%
Useful Life	3 years	4 years	2 years
Residual Value	$900	$810	$0

Assume that each equipment's annual cash flow will occur for the period equal to its useful life. Do not enter dollar signs or commas in the input boxes. Use the present values tables in the textbook appendix. Use the negative sign for negative values. Round your answers to the nearest whole number. a) Determine the NPV of each piece of equipment. Laser Hair Removal Machine: $Answer

Microdermabrasion Machine: $Answer

Facial Oxygen Unit: $Answer

b) For each piece of equipment, determine the maximum acceptable price using the NPV method. Laser Hair Removal Machine: $Answer

Microdermabrasion Machine: $Answer

Facial Oxygen Unit: $Answer

c) Determine the payback period for each piece of equipment. Round your answers to 1 decimal place. Laser Hair Removal Machine: Answer

Years Microdermabrasion Machine: Answer

Years Facial Oxygen Unit: Answer

Years