BEG-1 Jozy Altidore invested S6,000 at 5% annual interest, and left the money invested without withdrawing any of the interest for 12 years. At the end of the 12 years, Jozy withdrew the accumulated amount of money. (a) What amount did Joy withdraw, assuming the investment cams simple interest? (b) What amount did Jozy withdraw, assuming the investment carns interest compounded annually? BRIEF EXERCISE ... BEG-1 BEG-3 Liam Company signed a lease for an office building for a period of 12 years. Under the lease agreement, a security deposit of $9.600 is made. The deposit will be returned at the expiration of the lease with interest compounded at 4% per year. What amount will Liam receive at the time the lease expires? BRIEF EXERCISE ... BEG-3 Liam will receive BEGH Bates Company issued $1,000,000, 10-year bonds and agreed to make annual sink-ing fund deposits of $78,000. The deposits are made at the end of each year into an account paying 6% annual interest. What amount will be in the sinking fund at the end of 10 years? BRIEF EXERCISE ... BEG-4 The sinking Fund amount will be BEG-8 (a) What is the present value of a single amount of $25,000 due 9 years from now, discounted at 10%. (b) What is the present value of a series of $25.000 payments, to be received at the end of each of 6 years, discounted at 9%? BRIEF EXERCISE ... BEG-8 BEG.9 Messi Company is considering an investment that will return a lump sum of $900,000 6 years from now. What amount should Messi Company pay for this investment to car an 8% return? BRIEF EXERCISE ... BEG-9 Messi Company should therefore invest to have $900,000 in six years. BEG-11 Robben Company is considering investing in an annuity contract that will return $40,000 annually at the end of each year for 15 years. What amount should Robben Company pay for this investment if it earns an 8% return? BRIEF EXERCISE ... BEG-11 Robben Company should pay for this annuity contract. BEG-17 Frazier Company issues a 10% (annual -5% semi-annual). 5-year mortgage note on January 1, 2017, to obtain financing for new equipment. Land is used as collateral for the note. The terms provide for semiannual (5 yrs x 2 ca 10 periods) installment payments of $48,850. What are the cash proceeds received from the issuance of the note? BRIEF EXERCISE ... BEG - 17 from the Frazier Company should receive issuance of the note. BEG-22 Barney Googal owns a garage and is contemplating purchasing a tire retreading machine for $12,820. After estimating costs and revenues, Barney projects a net cash inflow from the retreading machine of S2,700 annually for 7 years. Bamey hopes to cam a retum of 9% on such investments. What is the present value of the retreading operation? Should Barney Googal purchase the retreading machine? BRIEF EXERCISE ... BEG - 22 The tire retreading machine present value of the future cash flows is BEG-23 Snyder Company is considering purchasing equipment. The equipment will produce the following cash inflows: Year 1, $25,000; Year 2, $30,000; and Year 3, $40,000. Snyder requires a minimum rate of return of 11%. What is the maximum price Snyder should pay for this equipment? BRIEF EXERCISE ... BEG - 23 To achieve a minimum rate of return of 11%, Snyder Company should pay no more than
