14. [-/7.18 Points] DETAILS BRECMBC9 11.11.029. MY NOTES ASK YOUR TEACHER You are the finance manager for a particular company. The company plans to purchase $3,000,000 in new assembly line machinery in 5 years. (Use Table 11-1 and Table 11-2. Round your answers to the nearest cent.) (a) How much (in s) must be set aside now at 6% interest compounded semiannually to accumulate the $3,000,000 in 5 years? $ (b) If the inflation rate on this type of equipment is 7% per year, what will be the cost (in $) of the equipment in 5 years, adjusted for inflation? (c) Use the inflation-adjusted cost of the equipment to calculate how much (in $) must be set aside now. $ (d) Use the present value formula to calculate how much in $) would be required now if you found a bank that offered 6% interest compounded daily to obtain the value found in part b. (Ignore leap years in calculation.) Submit Answer TABLE 11-1 Compound Interest Table Future Value of $1 at Compound Interest) Periods 25 45 75 Periods 1.07000 1.00500 1.01003 1.OISOR 1.02015 1,02525 3 4 S 19 1.01000 1.02010 1.03030 1.04060 1.05101 1.01.500 101023 1.04568 1.06136 1.07723 1.02000 1.04040 1.06121 1.0R243 1.03000 1.0600 1.099273 1.12551 1.19927 1.19405 54 1.OSODO 1.10250 1.15763 1.21551 1.272 1.04 1.ORG 112486 1.16 1.000 1.12360 1.19102 1.26348 1.33823 1.22504 1.310NO 1.40255 1.08000 1.16640 1.29971 1.3609 1.46013 1 2 3 4 5 1.10405 1.09344 1.10984 6 7 6 7 8 9 1.03038 1,03553 1.04071 1.04591 1.OS114 1.06152 1.07214 1.08.286 1.09360 1.10462 1.12616 1.14569 1.17166 1.19509 1.2009 1.25677 1.36612 1.31993 1.36857 1.42331 1.434 1.41852 1.50363 1.5935 1.69948 1.7 1.50073 1.6057 1.71819 1.83845 1.96715 1.567 1.7132 1.85093 1.99900 2.1592 1.1411 9 10 10 1.34392 1.34010 1.40710 1.47746 1.55133 1.62889 1.71004 1.79586 1.88565 1.97993 2.0793 12 13 1.056-40 1.06168 1.06 1.07232 1.07768 1.11567 1.126 1. 13800 1.14947 1.16097 1.17295 1.19562 1.21355 1.23176 1.25023 1.24337 1.26834 1.29361 1.31948 1.34587 1.37279 1.40004 1425 1.38423 1.42576 1.46853 1.51259 1.55797 1.53945 1.60103 1.66507 1.73168 1.80094 1.69830 2.01220 2.1313 2.26090 2.39656 2.10485 2.25219 2.40985 2.57853 2.75903 2.33164 2.51817 2.71962 2.93719 3.17217 IS 1.0307 1.OR$49 16 17 18 19 20 1.1725 1.18430 1.19615 1.20811 1.22019 1.26890 1.26202 1.3074 1.32695 1.34636 1.60471 1.65 1.70043 1.75351 1.80611 1.87298 1.94700 202582 2.1065 2.19112 2.18287 2.29202 2.40662 2.525 2.65330 2.54035 2.69277 2.5434 3.0250 3.20714 2.95216 3.15882 337993 3.61653 386165 3.42594 3.70002 3.900 16 17 18 4.31570 1.09940 1.10490 148505 20 4.14056 21 22 23 111042 1.11597 1.12155 1.12716 1.23239 1.24472 1.25716 1.26973 1.21343 1.36706 1.36756 1.4083 1.51567 1.54598 1.57600 1.60544 1.64061 2.27877 2.36792 2.46472 2.56330 266584 1.91610 1.97350 2.03279 2.09378 2.78596 2.92526 3.07152 3.22510 3.38635 3.39956 3.60354 3.81975 4.04893 5.03383 5.41654 5.67146 6.34118 6.84848 21 22 23 25 1.45095 SLOT237 5.42743 25 Periods 9% 10% 1.09000 1.1880 1.29503 2 3 1. 10000 1.21000 1.33100 1.45410 1.61051 115 1.1 1000 1.23210 1.36763 1.S1807 124 1.1 2000 1.25440 1.40493 1.57352 1.7621 139 1.13000 1.27690 1.44290 1.63047 1.84244 1.14000 1.29960 1.48154 1.6896 1.92541 15% L. 15000 1.3210 1.52088 1.74901 2.01136 16% 1.16000 1.34560 1.56000 1. 1054 2.10034 175 1.17000 1.36800 1.60161 1.873 2.19345 185 1.100 1.39240 1.64303 1.98678 2.28776 Periods 1 2 3 S 1.5352 5 6 7 8 9 1.67710 1.82604 1.99256 2.17189 2.36736 1.77156 1.94172 2.14350 2.35795 2.99374 1.87041 2.07616 2.30454 2.55804 2.83942 1.97382 2.21066 2.47596 2.77305 3.1058S 2.08195 2.35261 2.65844 3.00404 3.39457 2.19997 2.50227 2.85259 325195 3.70722 2.31306 2.66002 3.05902 3.5178 4.04556 2.43640 2.2622 3.27841 3.80286 2.56516 3.00124 351145 4.108.40 4.80683 2.6/7955 3.1897 3.75636 4.43545 5.23384 6 7 8 9 10 10 3.47855 3.30 5.62399 6.5 12 13 2.58043 2.81266 3.06590 3.34173 3.64248 2.85312 213843 3.45227 3.79750 4.17725 3.15176 3.49545 3.86133 4.31014 4.78450 3.83586 4.33452 4.91 5.53475 6.25427 4.22623 4.81790 5.49341 6.26135 7.13794 4.65239 5.3500S 6.15279 7.07571 8.13706 5.11726 5.93603 6.84579 7.98752 6.17593 7.28759 8.59936 10.14724 11.97375 12 13 4.88711 S47357 9.00745 053872 IS IS 16 17 18 19 20 3.97031 4.32763 4.71712 5.14166 5.60441 5.05447 S.55992 6.11991 6.72750 5.310 5.89509 6.54155 7.2614 R06231 6.86604 7.6197 8.61276 7.05733 7.96 9.02427 10.19742 11.52309 8.13725 9.27646 10.57517 12.0556 13.74349 9.35762 10.76126 12.37545 14.23177 16.36654 10.74800 12.46768 14.46251 16.77652 19.46076 14.42646 1687895 19.74838 23.1056 14.1.2002 16.67225 19.67325 21.21444 27.39303 16 17 18 19 20 21 22 6.10 6.65R50 7.40025 R 14027 R9917 9.93357 10.80385 12.10031 13.02109 14.71383 15.66758 17.86104 18.82152 21.64475 22.57448 26.18640 27.03355 31.62925 32.32378 38.14206 21 22 TABLE 11-2 Present Value Table Present Value of $1 at Compound Interest) Periods 75 NS 0.92902 0.0 0.98SIS 0.98035 0.97537 0.99010 0.900 0.97059 0.00 0.95147 0.9522 0.97065 0.95632 2 3 4 s 0.98039 0.96117 0.94212 0.92135 0.90573 35 0.0707 0.94260 091514 88549 0.86261 0.154 0.92456 0.900 O.RS480 0.0193 59 0.95238 0.90703 0.86364 2.220 072353 0.00 0 000 0.83362 0.79209 0.74726 0.93458 0.87344 0.1630 0.76290 0.71299 Periods 1 2 3 0.92593 08574 0.79383 0.73503 0.6058 0.92126 S 0.97052 0.96560 7 6 7 0.94205 0.93272 0.92345 0.91434 090529 0.91454 0.00103 0.88771 0.87459 0.86167 0.900 0.95610 0.95135 0.97 0.82056 OR$349 0.83676 0.82035 0.83748 0.81309 0.78941 0.76642 0.74409 0.79031 0.75992 0.73040 0.70259 0.67556 0.74622 0.71068 0.6764 0.64461 0.61391 0.70496 0.66506 0.62741 0.59190 0.55839 066634 0.62275 0.5.201 0.54393 O.SORS 0.6.2017 0.58309 0.54027 0.0025 9 10 9 10 12 13 14 IS 0.94661 0.94191 0.93722 0.93256 0.92792 0.89632 0.88745 0.87866 0.86796 0.86135 0.72342 0.70138 0.600 0.66112 0.64186 0.83639 0.82403 OSTINS 0.79185 0.64956 0.62460 0.60057 0.57748 O.SS5 26 0.52579 0.47 0.46884 0.44230 0.41727 55654 0.53012 OSOS 0.48102 12 13 0.47509 0.44 0.41016 0.38782 0.36345 IS 0.0426 0.78849 0.77303 0.75788 0.74301 0.72845 0.71416 0.70016 065643 0.67297 0.42 0.39711 0.36770 0:34046 031524 0.2911 0.27027 0.25025 0.23171 021455 0.85282 0.62317 16 17 18 19 0.921.30 0.91671 0.91414 0.90959 0.90506 081602 0.82774 081954 0.73 0.77639 0.76191 0.75361 0.74247 0.56739 OLS7029 O.55368 0.52391 0:51337 0.49363 0.47464 0.45610 045811 043630 041552 0.39573 0.3769 0.39365 0.37136 0.1934 0.33051 0.31180 0.33873 0.31657 0.29556 0.27651 0.25842 16 17 18 19 20 21 0.24151 0.22571 0.90056 0.1960 0.89162 0.8719 0.277 23 0.81140 0.80340 0.79544 0.76757 0.77977 0.73150 0.72069 0.71004 0.69954 0.68921 0.65978 0.64684 0.63416 0.62172 0.60953 0.53755 OS2189 0.50562 0.49193 0.47761 0.4343 0.42196 0.40573 0.39012 0.37512 0.35894 0.34165 0.32557 0.3100 0.29530 0.29416 0.27751 0.26180 0.2460 0.23300 0.19865 016394 017032 0.15770 0.14602 21 22 23 0.19715 0.18425 25 105 Period 1 2 3 0.91743 0.84168 0.77218 0.70843 0.64993 0.90090 0.81162 0.73119 0.65873 0.89286 0.79719 0.71178 0.61552 0.56741 135 ONS 0.78315 0.69305 0.61332 0.54276 0.87719 0.7947 0.67497 155 0.86957 0.75614 0.65752 0.57175 0.271 0.16207 0.74316 0.64066 0.55229 0.47611 175 O.RS470 0.73051 0.62417 0.53365 0.45611 0.71818 0.60863 0.51570 0.43711 Periods 1 2 3 4 S 5 0.59345 0.51937 0.90202 0.8245 0.75131 0.66301 0.62092 5647 0.51316 0.46651 0.42410 L3R554 0.53464 0.4816 7 0.50663 0.45235 0.40388 6 7 0.56627 0.54703 0.50187 0.46043 0.42341 0.33320 0.48032 0.42506 0.37616 0.33258 0_29459 0.432 0.3754 0.32690 0.45559 0.3994 0.35056 0.30751 0.2974 041044 0.3583 0.30503 0.26295 0.2266 0.3700 031393 02604 0.225 0.19106 9 0.24340 0.32092 0.35218 9 10 10 0.32197 0.34718 0.18753 0.35553 0.32618 0.29925 0.27454 13 14 IS 0.31726 0.28584 0.25751 0.23199 0.20900 0.31863 028866 0.26333 0.23939 0.2748 0.256 0.22917 0.20162 0.18270 0.26070 0.23071 0_20416 01 068 0.1999 0.14150 12 13 021494 0.18691 0.16253 0.14133 Q.12289 0.19542 0.1666 0.14523 0.12520 0.10793 0.20756 0.18207 0.19971 0.14010 0.12229 0.10780 0.09456 0.16192 0.13722 0.116.29 0.05 00352 IS 0.17781 0.15197 0.1290 0.11102 0.0149 0.00110 0.06932 05925 0.05064 16 17 007078 0.25187 0.23107 0.21199 0.19449 0.17843 0.21761 0.19784 017926 0.16351 0.14564 0.18929 0.161163 0.15282 0.13768 0.12403 0.1612 0.14564 0.13004 0.11611 0.10167 10 0.09293 Q.ONONI 0.07027 0.06110 011081 0.006 0.08678 0.02304 0.08021 0.00014 0.09161 0.05139 0.0599 0.00 0.04308 0.006SI 16 17 18 19 20 19 0.07276 21 22 0.04430 21 0.16370 0.1 SOIN 0.13778 0.13513 012235 0.11174 0.10067 0.00069 0.06256 0.08.254 0.07379 0.07650 0.06796 0.06014 OGOS 0.09911 0.05313 0.04620 0.04017 0.03639 0.03162 0.02702 0000 002622 0.00323 0.03292 23