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Hi, I need help with this Accounting Homework please! Future Value (FV): 1. Use a proper formula to answer the following questions: Future value of

Hi, I need help with this Accounting Homework please!

image text in transcribed Future Value (FV): 1. Use a proper formula to answer the following questions: Future value of $1 =FV(Interest Rate,Periods,0,Principal Amount*(-1)) Future value of Ordinary Annuity =FV(Interest Rate,Periods,Principal Amount*(-1),0) (a) If we put away $1,000 today, what will it be worth in 1 year at 10%? Interest Rate Periods Principal Amount FV 2pts. (b) If we put away $5,000 today, what will it be worth in 5 years at 9%? Interest Rate Periods Principal Amount FV 2pts. (c) If we put away $1,000 each year, what will it be worth at the end of year 6 at 10%? Interest Rate Periods Principal Amount FV 2pts. (d) If we put away $8,000 today, what will it be worth in 20 years at 7%? Interest Rate Periods Principal Amount FV 2pts. (e) If we put away $3,000 each year, what will it be worth at the end of year 10 at 5%? Interest Rate Periods Principal Amount FV 2pts. (f) If we put away $500 each year, what will it be worth at the end of year 25 at 5%? Interest Rate Periods Principal Amount FV 2pts. Total: 12pts. Present Value (PV): 1. Use a proper formula to answer the following questions: Present value of $1 =PV(Interest Rate,Periods,0,Principal Amount*(-1)) Present value of Ordinary Annuity =PV(Interest Rate,Periods,Principal Amount*(-1),0) (a) If we want to receive $1,100 in 3 years, how much should we invest today using 10% discount? Interest Rate Periods Principal Amount PV 2pts. (b) If we want to receive $1,000 each year for 5 years, how much should we invest today using 9.5 Interest Rate Periods Principal Amount PV 2pts. (c) If we want to receive $100,000 in 20 years, how much should we invest today using 5% discoun Interest Rate Periods Principal Amount PV 2pts. (d) If we want to receive $4,000 each year for 10 years, how much should we invest today using an Interest Rate Periods Principal Amount PV 2pts. (e) If we want to receive $10,000 in 2 years, how much should we invest today using 13% discount Interest Rate Periods Principal Amount PV 2pts. (f) If we want to receive $2,500 each year for 15 years, how much should we invest today using 14 Interest Rate Periods Principal Amount PV 2pts. Total: 12pts. day using 10% discount? e invest today using 9.5% discount? today using 5% discount? we invest today using an 8.07% discount? oday using 13% discount? we invest today using 14% discount? Net Present Value (NPV): 1.Use a proper formula to calculate NPV for each case and decide whether you should invest in a project: Hint: Format Initial Outflow and Initial Working Capital Investment as negative numbers. To calculate the NPV, use th All answers should be formatted to have two decimal places, place a dollar sign where approproate. Present value of $1 =PV(Interest Rate,Periods,0,Principal Amount*(-1)) Present value of Ordinary Annuity =PV(Interest Rate,Periods,Principal Amount*(-1),0) Case #1 (5pts.): Initial Investment: Annual Cash Inflow: Salvage Value: Interest Rate: $40,000 $7,000 $8,000 10% for 8 years Present Value (PV) Initial Outflow Annuity Salvage Inflow NPV 5pts. Decision: Case #2 (5pts.): Initial Investment: Annual Cash Inflow: Salvage Value: Interest Rate: $200,000 $35,000 $35,000 17% Present Value (PV) Initial Outflow Annuity for 18 years Salvage Inflow NPV 5pts. Decision: Case #3 (7pts.): Initial Investment: $100,000 Working Capital Investment: $75,000 Annual Cash Inflow: $26,000 for 6 Salvage Value: $25,000 Interest Rate: 10% Working Capital will be released at the end of the project. years Present Value (PV) Initial Outflow Working Capital Investment Annuity Salvage Inflow Working Capital Released NPV 7pts. Decision: Total: 17pts. st in a project: o calculate the NPV, use the SUM formula to add all PVs together. mount*(-1)) ount*(-1),0) Hint: Use Handout Packet Chpt. 12, page 13 for help. Use formulas to calculate the answer for each question. Case #1: Initial Investment: Annual Revenue Annual Cash Expenses Salvage Value Useful Life Hurdle Rate $100,000 $50,000 $35,000 $25,000 10 12% years (a )What is the net cash inflow annually? (b) How much is the annual Depreciation Expense using Straigh-Line method? (c) How much is the annual Net Income? (d) What is the ARR? (e) What is the Payback Period? years (f) Calculate the NPV: Present Value (PV) Initial Outflow Annuity Salvage Inflow NPV Decision: ulate the answer for each question. 2pt. 2pt. 2pt. 2pt. 2pt. Present value of $1 =PV(Interest Rate,Periods,0,Principal Amount*(-1)) 8pts. 1pt. Total: 19pts. Present value of Ordinary Annuity =PV(Interest Rate,Periods,Principal Amount*(-1),0) ds,0,Principal Amount*(-1)) ds,Principal Amount*(-1),0)

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