Case #1 ( 20 points)

Calculate the following: Determine the present value of an investment in equipment if it is expected to provide annual savings of $ 73,000_ for _30_years and has a resale value of $7500 at the end of that period. Assume an interest rate of 6 % and the savings are realized at year-end.

Show your final answer and show all the work to support your answer.

Case # 2 ( 40 points)

On January 1, 2021 the Kiner Co. issued three-year bonds with a face value of $66000 and a stated interest rate of 6.5 %. Interest is payable quarterly. The bonds were sold to yield(market rate) of 16%.

Calculate the issues price of the bonds. Show your final answer and show all the work to support your answer.

Prepare the bond amortization table using the format covered in class.

Case # 3 ( 20 points)

On January 1, 2021, ABC Corp. borrowed $81400 by signing an installment loan. The loan will be repaid in 19 equal payments, one at the beginning of each year. The first payment is made on January 1, 2020. The interest rate for the loan is 12 %.

Calculate the annual payment required. Show your final answer and show all the work to support your answer.

Prepare the amortization table for the loan using the format covered in class.

Case # 4 ( 20 points)

Assume the payments will be made at the end of each year (the first payment is made on December 31, 2020.); recalculate your answer for case # 3.

Calculate the annual payment required. Show your final answer and show all the work to support your answer.

Prepare the amortization table for the loan using the format covered in class.