Q5 OF THIS PAPER , DONT USE EXCEL

1. A company deposits $50,000 monthly into a fund paying a nominal interest rate of 8% per year compounded semiannually for a period of 4 years (assume there is no interperiod interest accrued). How much money is accumulated at the end of four years? The same company wants to purchase machinery for $4,000,000. The company intends to make an immediate cash payment equal to $2,764,200 and to pay for the rest by equal quarterly payments. Their financing agreement with the machinery manufacturer is that payments should be completed in 6 quarters and that the nominal interest rate should be 18% per year compounded monthly. What will these quarterly payments be? 3. A company buys an office building. The purchase price is $8 million. It is estimated that the building will be used for only 15 years and that it will be salable for $10 million at the end of the 15-year period. What is the rate of return of this venture? A company leases an office building on a 15-year lease at the end of which the building becomes company property. The annual payments in case the company leases are $500,000 payable at the start of each year. It is estimated that the building will be used for only 15 years and that it will be salable for $10 million at the end of the 15-year period. What is the rate of return of this venture? 5. Determine which alternative (Problem 3 or Problem 4) is economically desirable by using the incremental rate of return method of comparison. Use present worth values in your analysis. Take MARR = 1%. 6. Two alternatives are under consideration to provide lab facilities for a company. The facilities will be retired at the end of 18 years

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