1.

Crane Googal owns a garage and is contemplating purchasing a tire retreading machine for $15,820. After estimating costs and revenues, Crane projects a net cash inflow from the retreading machine of $3,700 annually for 6 years. Crane hopes to earn a return of 8% on such investments. Click here to view the factor table. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) What is the present value of the retreading operation? (Round answer to 2 decimal places, e.g. 25.25.)

Present value

$enter the present value in dollars rounded to 2 decimal places

Should Crane Googal purchase the retreading machine?

Crane Googal select an option should notshould purchase the retreading machine.

2. Ivanhoe Enterprises issued 8%, 9-year, $2,610,000 bonds that pay interest annually on April 1. The bonds are dated April 1, 2022, and are issued on that date. The discount rate for such bonds on April 1, 2022, is 10%. Click here to view the factor table. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) What cash proceeds did Ivanhoe receive from issuance of the bonds? (Round answer to 0 decimal places, e.g. 125.)

Cash proceeds from issuance of the bonds

$enter the cash proceeds received from the issuance of the bonds in dollars

3.

Cullumber Company issued $1,900,000, 15-year bonds. It agreed to make annual deposits of $71,000 to a fund (called a sinking fund), which will be used to pay off the principal amount of the bond at the end of 15 years. The deposits are made at the end of each year into an account paying 8% annual interest. Click here to view the factor table. (For calculation purposes, use 5 decimal places as displayed in the factor table provided.) What amount will be in the sinking fund at the end of 15 years? (Round answer to 2 decimal places, e.g. 25.25.)

Amount in the sinking fund