23. Professor Smith wants to save enough money to purchase a boat in five years. The estimated cost of the boat is $250,000. In order to accomplish this, she decides that she will invest $25,000 at the end of each year for the next five years. She assumes that interest of 6% will compounded semi-annually. How much will Professor Smith have at the end of five years (round up to nearest dollar)?

a) $286,597

b) $345,411

c) $140,928

d) $291,195

25. Homewood Electronics sells major appliances on a two-year payment plan. The company would like to estimate the bad debt allowance needed to cover the notes outstanding over the next two years. Uncollected notes range from $5,000 to $8,000 per year. Total sales revenue for 2015 amounted to $100,000. Estimated lost cash flows and the probability of occurrence for each of the next two years are summarized in the following schedule. The risk-free rate is 5%. What is the estimated bad debt allowance for 2015?

Total 2016 expected cash flow loss on notes outstanding - 2,720

Total 2017 expected cash flow loss on notes outstanding - 3,565

Group of answer choices

5,824

6,285

5.986

5,701