P12-55ASolve various time value of money scenarios(Learning Objectives 3 & 4)

Trent would like to have $3,500,000 saved by the time he retires in 30 years. How much does he need to invest now at a 14% interest rate to fund his retirement goal?

Assume that Ramona accumulates savings of $1.5 million by the time she retires. If she invests this savings at 12%, how much money will she be able to withdraw at the end of each year for twenty years?

Assuming a 6% interest rate, how much would Katie have to invest now to be able to withdraw $13,000 at the end of each year for the next nine years?

Victor is considering a capital investment that costs $510,000 and will provide the following net cash inflows:

Year

Net Cash Inflow

1

$304,000

2

$206,000

3

$108,000

Using a hurdle rate of 12%, find the NPV of the investment.