Question 5

Your firm purchases a piece of property by buying it outright for $515,000. Historically, nearby property in the neighborhood has appreciated in value about 4% per year. Assuming you can rely on this historic appreciation what will the property be worth AT THE END OF 20 YEARS?

Question 6
	In doing some retirement planning you determined that you want to save $25,000 each year until you retire. You plan to invest it in a 'guaranteed return mutual fund' which pays COMPOUND interest at 4% per year; you plan to keep it invested there until you retire in 30 years. WHAT WILL THE INVESTMENT BE WORTH THEN?

Question 7

Your firm must replace its packaging machine after its useful life of 10 years passes and depreciation can no longer be claimed on it. The estimated replacement cost is $5,550,123. How much must the company save (invest) each year at 2% to accumulate enough to replace the machine?

Question 8

You are offered two investments for the firms retained earnings ($4,238,000). As CFO you are looking for good ways to invest the firms hard earned money. Which option will give you a better return on and of investment (two ROIs)?

Option 1 pays out at 4% simple interest for five years

Option 2 pays out at 2% compound interest for four years

Question 9
	Increasing the number of periods could impact all of the following except A PV of an annuity B PV of $1 C FV of $1 D FV of an annuity