Q1.

Ivanhoe Company signs a contract to sell the use of its patented manufacturing technology to Bridgeport Corp. for 16 years. The contract for this transaction stipulates that Bridgeport Corp. pays Ivanhoe $19,500 at the end of each year for the use of this technology. Using a discount rate of 9%, what is the value in use of the patented manufacturing technology? ( For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round nal answer to 2 decimal places, e3. 5,275.25.) Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Value in use $ Determine the amount of interest that will be earned on each of the following investments: (Round answers to 2 decimal places, e.g. 15.25.) (i) in) Interest Number of Investment Rate Periods Type of Interest Amount of Interest a. $170 5% 1 Simple $ 8.5 b. $425 8% 4 Simple $ 3.5 c. $425 8% 2 Compound $ As CFO of a small manufacturing rm, you have been asked to determine the best nancing for the purchase of a new piece of equipment. The vendor is offering repayment options of $11,000 at the end of each year for ve years, or no payment for two years followed by one payment of $44,000. The current market rate of interest is 7%. Calculate present value of both options. (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round nal answers to 2 decimal places, e.g. 5,275.25.) Click here to view the factor table PRESENT VALUE OF 1. Click here to view the factor table PRESENT VALUE OF AN ANNUITY OF 1. Present Value Option 1 $ Option 2 $ Which option would you recommend? E]