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Use the following information: Annual cash inflows that will arise from two competing investment projects are given below: Investment Year A B 1 $4,000 $16,000
Use the following information:
Annual cash inflows that will arise from two competing investment projects are given below:
Investment
Year | A | B |
1 | $4,000 | $16,000 |
2 | $8,000 | $12,000 |
3 | $12,000 | $8,000 |
4 | $16,000 | $4,000 |
Total | $40,000 | $40,000 |
Each investment project will require the same investment outlay. The discount rate is 16%
Compute the present value of the cash inflows for Investment A. (Round to nearest dollar)
Compute the present value of the cash inflows for Investment B. (Round to nearest dollar)
Annual cash inflows that will arise from two competing investment projects are given below: Year AWN- Investment A Investment B $ 8,000 $11,000 9,000 10,000 10,000 9,000 11,000 8,000 Total $38,000 $38,000 The discount rate is 7%. Use Excel or a financial calculator to solve the homework. Round answers to the nearest dollar. Required: Compute the present value of the cash inflows for each investment. Each investment opportunity will require the same initial investment. Present Value of Cash Flows Investment Investment The Atlantic Medical Clinic can purchase a new computer system that will save $9,000 annually in billing costs. The computer system will last for ten years and have no salvage value. Use Excel or a financial calculator to solve. Round answers to the nearest dollar. Required: Up to how much should the Atlantic Medical Clinic be willing to pay for the new computer system if the clinic's required rate of return is: Present Value Six percent 2. Eight percent You have deposited $15,336 in a special account that has a guaranteed interest rate. If you withdraw $3,200 at the end of each year for 6 years, you will completely exhaust the balance in the account. The guaranteed interest rate is (rounded to 2 decimal places): = %? How much would you have to invest today in the bank at an interest rate of 10% to have an annuity of $5600 per year for 7 years, with nothing left in the bank at the end of the 7 years? (Round to nearest dollar) A company wants to have $20,000 at the end of a 7-year period by investing a single sum now. How much needs to be invested in order to have the desired sum in 7 years, if the money can be invested at 17%? (Round answer to nearest dollar). At the end of 3 years, when you graduate from college, your father has promised to give you a used car that will cost $16,000. What lump sum must he invest now to have the $16,000 at the end of 3-years if he can invest money at 9%? (Round answer to nearest dollar) Fargo Freightliners plans to build a new garage in 3 years to have more space for repairing its trucks. The garage will cost $325,000. What lump-sum amount should the company invest now to have the $325,000 available at the end of the 3 year period? Assume that the company can invest money at 5 percent. (Round to nearest dollar)
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