Question
1)Tim Howard has been offered the opportunity of investing $44,302 now. The investment will earn 8% per year and at the end of that time
1)Tim Howard has been offered the opportunity of investing $44,302 now. The investment will earn 8% per year and at the end of that time will return Tim $82,000.
(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
How many years must Tim wait to receive $82,000? (Hint: Use Present value of 1 factor table.) (Round answer to 0 decimal places, e.g. 25.)
Tim must wait years
2) Carly Simon wishes to invest $23,644.53 on July 1, 2020, and have it accumulate to $52,000 by July 1, 2030. Use a financial calculator to determine at what exact annual rate of interest Carly must invest the $23,644.53. (Round answer to 2 decimal places, e.g. 25.25%.)
Annual rate of interest %
3) Snyder Company is considering purchasing equipment. The equipment will produce the following cash inflows: Year 1, $27,500; Year 2, $31,500; and Year 3, $41,500. Snyder requires a minimum rate of return of 8%.
(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)
What is the maximum price Snyder should pay for this equipment? (Round answer to 2 decimal places, e.g. 25.25.)
Maximum price $
4) Barney Googal owns a garage and is contemplating purchasing a tire retreading machine for $20,820. After estimating costs and revenues, Barney projects a net cash inflow from the retreading machine of $4,500 annually for 7 years. Barney hopes to earn a return of 10% on such investments.
(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 $
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