8% 1. Southwest Real Estate, Inc. is considering two sites for its latest project, a mixed-use residential and retail shopping development. The company's management has put together the following cash flow estimates and other data for each project: Site 1 Site 2 Cedar Park Round Rock Land and construction costs $5,000,000 $6,500,000 Annual cash inflows 680,000 715,000 Annual cash outflows 96,000 120,000 Estimated useful life (in years) 20 25 Interest rate 10% What is the cash payback period for each site (rounded to two decimal places)? What is the net present value (NPV) of each site and which site (if any) would be the preferred investment? 2. You recently received a birthday gift of $1,500 and you decide to save it for later use. If you deposit it into an investment account that pays 6% interest, how much will be in the account in 3 years? 3. You have recently opened a retirement account and decided to deposit $4,000 a year in the account. If you want to retire in 45 years and the account earns 8 percent interest, how much will you have in your account when you retire? 4. The Smith Company borrowed $20,000 from a local bank in 2018 at an interest rate of 8 percent that will be repaid in full at the end of the three-year term. Prepare all of the transactions the company would record in a tabular analysis related to the loan 5. If you are able to eam 4% Interest, what amount would you need to invest to have $850 two years from now? 6. You plan to finance the purchase of a new house with a bank loan of $225,000; the terms of the loan include an interest rate of 4 percent and a 15-year term. What would your annual mortgage payment be? How much interest will you pay over the life of the loan? 8% 1. Southwest Real Estate, Inc. is considering two sites for its latest project, a mixed-use residential and retail shopping development. The company's management has put together the following cash flow estimates and other data for each project: Site 1 Site 2 Cedar Park Round Rock Land and construction costs $5,000,000 $6,500,000 Annual cash inflows 680,000 715,000 Annual cash outflows 96,000 120,000 Estimated useful life (in years) 20 25 Interest rate 10% What is the cash payback period for each site (rounded to two decimal places)? What is the net present value (NPV) of each site and which site (if any) would be the preferred investment? 2. You recently received a birthday gift of $1,500 and you decide to save it for later use. If you deposit it into an investment account that pays 6% interest, how much will be in the account in 3 years? 3. You have recently opened a retirement account and decided to deposit $4,000 a year in the account. If you want to retire in 45 years and the account earns 8 percent interest, how much will you have in your account when you retire? 4. The Smith Company borrowed $20,000 from a local bank in 2018 at an interest rate of 8 percent that will be repaid in full at the end of the three-year term. Prepare all of the transactions the company would record in a tabular analysis related to the loan 5. If you are able to eam 4% Interest, what amount would you need to invest to have $850 two years from now? 6. You plan to finance the purchase of a new house with a bank loan of $225,000; the terms of the loan include an interest rate of 4 percent and a 15-year term. What would your annual mortgage payment be? How much interest will you pay over the life of the loan
