Q7-5. Can an ordinary annuity table be used to determine the present value of a three-year investment that pays $100 in the first year, $150 in the second, and $200 in the last year of the contract? Explain.
Q: If the sum of P12,000.00 is deposited in an account earning interest rate of 9% compounded quarterly...
A: Future Value: The future value is the amount that will be received at the end of a certain period. T...
Q: 1. Elimann Systems is considering a project that has the following cash flow and cost of capital (r)...
A: Cost of capital = 9.00% Year Cash flow 0 -1000 1 500 2 500 3 500
Q: For May, Young Company has budgeted its cash receipts at P125,000 and its cash disbursements at P138...
A: Cash receipts = P125,000 Cash disbursements = P138,000 Opening cash balance = P17000 Closing balance...
Q: The Northern Mart’s balance sheet at the close of 2021 appeared as follows. They are a very successf...
A: Weighted average cost of capital is the average cost of capital which is calculated by multiplying t...
Q: Please show the solution 1. What is the present worth of 4100 deposited at the end of every three mo...
A: Hai There! Thank you for the question. Post has multiple sub parts, as per company authoring guideli...
Q: perpetual you rece ve annually starting next year if you able to deposit 130,000.00 five years ago a...
A: Here we will have to use the concept of time value of money. As per the concept of time value of mon...
Q: ose an investment will pay $21,000 in 19 years from now. If you can earn 16.35% interest compounded ...
A: The today value will be the present value of future value considering the discount rate and period o...
Q: Which costing system would be more efficient when direct materials and direct labor costs are high, ...
A: There are mainly two types costing method Traditional costing Activity based costing
Q: 16. Tauriel deposited a certain amount on a savings account that earns compound interest on the last...
A: Interest compounded over a long enough period of time can contribute significantly to an emergency f...
Q: ZDL Ltd's earnings per share next year is expected to be $1.50 and the earnings are expected to grow...
A: Present value of growth opportunities (PVGO) is calculated as per the formula.
Q: A stock currently sells for 50 and can rise by 6 or fall by 4 for each of the next two periods. The ...
A: Current market price Values at the end of period one Values at the end of period two Value of call o...
Q: Identify methods for using and analysing working capital cycles
A: Working capital is the capital that a business needs and uses for the purpose of its day to day trad...
Q: antha lives under an imputation tax system. Her income tax rate is 35%, which applies to all of her ...
A: The companies pay dividend out of the net income and this is paid to shareholders but shareholder ha...
Q: Consider the following four debt securities, which are identical in every characteristic except as n...
A: Here, W is a corporate bond rated AAAX is a corporate bond rate BBBY is a corporate bond rated AAA ...
Q: 3. Find the annual percentage rate (APR), a.k.a. annual equivalent rate (AER), of interest of a savi...
A: Since you have posted multiple questions we shall be solving the first one for you. In case you wish...
Q: Everest Inc. is presently enjoying relatively high growth because of a surge in the demand for its n...
A: Dividend $ 0.85 Growth Rate for 2 years 32% Growth Rate for 2 years 22.9...
Q: How do gross profits, operating income, and net income differ
A: In finance when making or analyzing an income statement we look into different types of income or pr...
Q: 4. You owe P120,000.00 from a friend that promise to pay 6% simple interest. How much will you pay a...
A: The easiest and simple method of calculating interest is simple interest. An interest rate is consid...
Q: P= P1,000 r= 5% t=5 years m=2 What is the present value of an annuity due?
A: Payment (P) = P 1000 r = 5%, m = 2, hence semiannual compounding Effective interest rate (r) = (1 + ...
Q: (d) BB&T offers an account with 5.69 % interest compounded quarterly. APY = Number (e) Navy Federal ...
A: APY or annual percentage yield is the actual rate of return earned on the investment
Q: An investment pays simple interest, and quadruples in 10 years. What is the interest rate?
A: Time Period = 10 Years
Q: Consider the following four debt securities, which are identical in every characteristic except as n...
A: Interest rate or YTM of a bond Yield to maturity (YTM) of a bond is the total anticipated return on ...
Q: Bond Prices and Interest Rate Changes A 7 percent coupon bond with 8 years left to maturity is price...
A: The current price of the bond is equal to the present value of all its future payments discounted at...
Q: 2. It is estimated that a stand of timber will net P 25,000 a year for the next 10 years and that th...
A: Annual cash inflow (P) = P25000 Interest rate (r) = 6% Salvage value (SV) = P15000 Period (n) = 10 Y...
Q: If Going Merry Inc. has a net income of P 200,000 and a net sales of P 5,050,000 during 2020; and a ...
A: Year Net income Net sales 2020 200000 5050000 2021 225000 7000000
Q: Bob White argues that if his wage went up from $10/hour to $20/hour he would still be able to pay re...
A: Since you have posted a question with multiple questions, we will solve the first question for you. ...
Q: A. Which of the following is most closely associated with the cost of using assets? a. Asset utiliz...
A: A. The ratio of total sales or revenue to average assets is known as asset turnover. The asset turno...
Q: SHOW SOLUTION 3.The maintenance cost of a new equipment is projected to start at the end of the 2nd...
A: The annual equivalent maintenance cost is the equal amount of cost incurred on equipment during the ...
Q: If the corporate tax rate was 25 percent, what were the firm's income taxes for each year? Round you...
A: Tax refers to the amount charged by the government on individuals, partnership firms, HUF’s or any c...
Q: . Compute the cost of equity for this project 2. Compute the relevant cost of debt for this project...
A: WACC: It represents the average cost of capital for the company. It is computed by adding the indiv...
Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery w...
A: Cost of equity With current market price (P), next year dividend (D1) and constant growth rate in di...
Q: Consider the following four debt securities, which are identical in every characteristic except as n...
A: Data given:: Debt securities Description W Rated AAA X Rated BBB Y Rated AAA with shorter ...
Q: 3. Robbins Inc. is considering a project that has the following cash flows and cost capital (r) data...
A: Net present value is the sum of the present values of net of all future cash outflows and inflows di...
Q: You want to buy a $226,000 home. You plan to pay 5% as a down payment, and take out a 30-year loan a...
A: Price = $226000 Down payment = 5% Interest rate = 6.55% Monthly interest rate (r) = 6.55%/12 = 0.545...
Q: Financial analysts forecast GDY Inc.’s growth for the future to be 5%. GDY's recent annual dividend ...
A: The stock value can be calculated with the help of dividend growth model
Q: Blossom Manufacturing Company has been growing at a rate of 6 percent for the past two years, and th...
A: Data given:: Growth rate (g)= 6% D0= $1.50 Expected dividend (D1) = $1.50 * (1+6%) Required rate of ...
Q: 5.11 At 10 pcrcent annual intercst rate, which of the following has the largest present valuc: u) $2...
A: As you have asked multiple questions, we will answer the first question for you. Please post questio...
Q: Calculate the value of the bonds and determine whether the bond is selling at discount, premium or p...
A: Given The face value of bonds is RM1000 Rate is 12%
Q: The capital asset pricing model (CAPM) The constant–growth model Compute forward-looking expected re...
A: The capital asset pricing model (CAPM) The Capital Asset Pricing Model (CAPM) alludes to the conne...
Q: Find the size of each of 8 payments made at the end of each year into a 9% rate sinking fund which p...
A: Formula FVA = P*((1+i)n-1)/i Where FVA - Future value of annuity i.e. 55000 P - Annual payment i - I...
Q: A bond has an interest rate of 15% for the next 5 years The current cost and par value of the bond i...
A: Net present value is the sum of the present values of net of all future cash outflows and inflows di...
Q: Consider the following information about three stocks: Rate of Return If State Occurs Probability of...
A: Hi There, Thanks for posting the question. As per Q&A guidelines, the solution for first three s...
Q: Optival’s stock is currently trading at $60 per share with a historical volatility of 20%. The risk-...
A: Given: Particulars Spot price $60.00 Standard deviation 20% Risk free rate 4% Exercise ...
Q: Find the future value of this loan. $22,102 at 11.2% for 11 months The future value of the loan is $
A: SOLUTION : GIVEN, Present value = $22,102 Rate = 11.2% = 0.112 Times = 11 months = 11 Now, Calcula...
Q: Ezzell Enterprises' noncallable bonds currently sell for $1,196.25. They have a 5-year maturity, sem...
A: Bonds Capital Gain or loss Yield = Current Yield - Yield to Maturity (YTM) Current Yield = Coupon Pa...
Q: Question: What type of Annuity is indicated in the problem above?
A: Annuity Due: It represents the annuity where the periodic payments are made at the beginning of eac...
Q: elix Jones, a recent engineering graduate, expects a arting salary of $35,000 per year. His future e...
A: Salary grow by fixed percentage that salary is geometric sequence of growing annuity and the present...
Q: A concrete pavement on a street would cost P2M and would last for 5 years. Minor maintenance cost is...
A:
Q: 4. A man paid 10 % as down payment of P200,000.00 for a house and lot and agreed to pay the balance ...
A: As per our guidelines we are supposed to answer only one question (if there are multiple questions a...
Q: Q)suppose your child is 10 years old now and you decided to start an education fund your child next ...
A: Here we will use the concept of time value of money. Essentially this is the case of a growing annui...
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Find the future value of the ordinary annuity. Interest is compounded annually, unless otherwise indicated. R= $1,000, i- 0.04, n = 13 O $41.626.84 O $15,025.81 O 54002.581.Which of the following statements is CORRECT? Statement 1. The difference between the PV of an annuity due and the PV of an ordinary annuity is that each of the payments of the annuity due is discounted by one more year (period). Statement 2. The difference between an ordinary annuity and an annuity due is that each of the payments of the annuity due earns interest for one additional year (period). Statement 3. An annuity is a series of equal payments made at fixed equal-length intervals for a specified number of periods. Statement 3 only. All of the statements are correct. None of the statement is correct. Statement 1 only. Statement 2 only. Given some amount to be received several years in the future, if the interest rate increases, the present value of the future amount will Be higher Be variable. Be lower. Cannot tell. Stay the same. WITH EXPLANATION PLEASE9. Examine the time line for Now the annuity shown. 250 (1.015) 250 (1.015) 250 (1.015) E 250 (1.015)23 250 (1.015) a) What is the duration of this annuity? How can you tell? b) Determine the annual rate of interest and the number of compounding periods per year. c) Determine the present value of this annuity. d) Determine the total interest earned. ANSWER 9. a) 6 years b) 6%; 4 compounding periods per year c) $5007.60 d) $992.40 Time (3-month periods) 1 2 250 250 250 250 250 3 23 24 H-H
- Complete the ordinary annuity. (Please use the following provided Table.) (Do not round intermediate calculations. Round your answer to the nearest cent.) amount of payment payment payable years interest rate value of annuity 12,700 semiannual 9 6%Use the table below to answer the following questions: Present Value of an Annuity of 1 Factor 1/2 Yr 1/2 Yr Full-Yr 0.9578 0.9578 0.9174 0.9174 0.8417 1.8753 1.7591 0.8787 0.7722 2.7540 2.5313 0.8417 0.7084 3.5957 3.2397 0.8062 0.6499 4.4019 3.8897 0.7722 0.5963 5.1740 4.4859 Assumption: Required annual effective rate (EPR) of return is 9%. Period 1 2 3 4 5 6 Present Value of 1 Factor O $250,193 O $279,396 O $291,703 O $273,380 Full-Yr 0.9174 If an investment pays you $54,000 every 6 months for 3 years, starting at the beginning of each 6 month period, what is its present value?(b) Find the present value of an annuity-immediate such that payments start at 1, increase by annual amounts of 1 to a payment of , and the decrease by annual amounts of 1 to a final payment of 1.
- Find the discounted value of an ordinary simple perpetuity paying $2100 at the end of half-year, if interest is i365 = 19.97 %. Answer: 21031.55For each of the following situations involving annuities, solve for the unknown (?). Assume that interest is compounded annually and that all annuity amounts are received at the end of each period. (i = interest rate, and n = number of years) Present Value Annuity Amount i n1. ? $ 3,000 8% 52. $ 242,980 75,000 ? 43. 161,214 20,000 9 ?4. 500,000 80,518 ? 85. 250,000 ? 10 4 Sandy Kupchack just graduated from State University with a bachelor’s degree in history. During her four years at the university, Sandy accumulated $12,000 in student loans. She asks for your help in determining the…6. Present Value of an Annuity The table below contains information on four different annuities. a) Calculate the present value of each annuity if it is i) An ordinary annuity ii) An annuity due b) Compare your findings. All else being identical, which type of annuity-ordinary annuity or annuity due-is preferable? Why? Part Annual CF Interest Rate Deposit Period A $12,000 B $52,000 C $20,000 D $24,000 8% 10% 6% 12% (Years) 8 15 20 8
- Question 3 (25 points): If the present value of a perpetuity is given by: where C is the periodic payments and r is the discount rate. Show that the present value of an annuity of n years is given by: 1 C - (1 + r)]Which table would you use to determine how much must be deposited now in order to provide for 5 annual withdrawals at the beginning of each year, starting one year hence? a. Future value of an ordinary annuity of 1 b. Future value of an annuity due of 1 c. Present value of an annuity due of 1 d. None of these answer choices are correct.For each of the following annuities, calculate the present value. Note: Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16. Present Value Annuity Payment $ $ $ $ 1,950 1,265 11,455 29,900 Years 7 9 16 24 Interest Rate 8% 7 9 11