Please see the attachment. Financial Analysis You are a financial analyst for the fictional Evergreen School District in Washington. The Facilities Department has proposed replacement of the heating and ventilation systems in the District's twenty elementary schools. The current systems have reached the end of their usefu
If you have $20,000 in an account earning 8% annually, what constant amount could you withdraw each year and have nothing remaining at the end of five years? a. $3,525.62 b. $5,008.76 c. $3,408.88 d. $2,465.78
You need to accumulate $10,000. To do so you plan to make deposits of $1250 per year, with the first payment being made a year from today in a bank account that pays 12 percent interest. Your last deposit will be less than $1250 if less is need to round out to $10,000. How many years will it take you to reach your $10,000 goa
Find the future value of the following annuities. The first payment in these annuities is made at the end of year one. That is, they are are ordinary annuities. A) $400 per years for 10 years at 10% B) $200 per year for 5 years at 5% C) $400 per year for 5 years at 5% D) Now rework parts a and b and c assuming that pay
1. What is the future value (approx.), where present value=1000, r=6% and n=1? a. 1060.00 b. 1600.00 c. 943.40 d. 900.00 2. What is the future value (approx.), where present value=1000, r=6% and n=10? a. 1600.00 b. 400.00 c. 1790.85 d. 1645.32 3. What is the present val
The company is deciding whether to invest in a certain capital investment. The investment requires an initial outlay of $55,000 and annual payments of $12,000 made at the end of the year for five years. The company's discount rate is 14%. What is the present value of cash outflows related to this investment?
An auto stereo dealer sells a stereo system for $600.00 down and monthly payments of $30.00 for the next 3 years. If the interest rate is 1.25% per month on the unpaid balance, find: A.) The cost of the stereo system; B.) The total amount of interest paid. Please show formula used. And the list of steps used to find the
1) Dr. Oats, a nutrition professor, invests $80,000 in a piece of land that is expected to increase in value by 14 percent per year for the next five years. She will then take the the proceeds and provide herself with a 10- year annuity. Assuming a 14% interest rate for the annuity how much will this be? 2) I have a contract
5-1A. (Compound interest) To what amount will the following investments accumulate? a. $5,000 invested for 10 years at 10 percent compounded annually b. $8,000 invested for 7 years at 8 percent compounded annually c. $775 invested for 12 years at 12 percent compounded annually d. $21,000 invested for 5 years at 5 percent com
Please review the attached document and answer all questions with explanations. Please provide as much detail as possible about each answer. Please review the attached document and answer all questions with explanations. Please provide as much detail as possible about each answer. 1. Proper risk-return management means
1. Raybac is about to go public. Its present stockholders own 5000,000 shares. The new public issue will represent 800,000 shares. The shares will be priced at $25 to the public with a 4% spread. The out-of-pocket costs will be $450,000. What are the net proceeds to the firm? $18,750,000 $19,200,000 $18,250,
An individual has a $120,000 30 year mortgage at 6% fixed. This individual also has a floating rate Home Equity line of credit for $20,000. The current rate on this loan is 8.5%. Only interest payments are required on the Home Equity line. The individual has an increase in discretionary income of $500 per month. Assuming
Ali Shah sets aside 2,000 each year for 5 years. He then withdraws the funds on an equal annual basis for the next 4 years. If Ali wishes to determine the amount of the annuity to be withdrawn each year, he should use following two tables in this order: a) present value of an annuity of $1; future value of an annuity of $1
You wish to retire after 18 years, at which time you want to have accumulated enough money to receive an annuity of $14,000 a year for 20 years of retirerment. During the period before you can earn 11 percent annually, while after retirement you can earn 8 percent on your money. What annual contributions to the retirement fund w
A 65 year-old man is retiring and can take either $50,000 in cash or an ordinary annuity that promises to pay him $6,000 per year for as long as he lives. Which of the following statements is most correct? a. Because of the time value of money, the man will always be better off taking the $50,000 up front. b. The higher the
Vandalay Industries is considering the purchase of a new machine for the production of latex. Machine A costs $2,310,000 and will last for 4 years. Variable costs are 37 percent of sales and fixed costs are $157,000 per year. Machine B costs $4,520,000 and will last for 8 years. Variable costs for this machine are 32 percent of
Question: Eads Industrial Systems Company (EISC) is trying to decide between two different conveyor belt systems. System A costs $456,000, has a 3-year life, and requires $150,000 in pretax annual operating costs. System B costs $521,000, has a 5-year life, and requires $83,000 in pretax annual operating costs. Both systems are
Swenson and Swenson just decided to save $2,200 a month for the next 6 years as a safety net for recessionary periods. The money will be set aside in a separate savings account which pays 5.5% interest compounded monthly. They deposit the first $2,200 today. If the company had wanted to deposit an equivalent lump sum today, how
1. Two companies are contemplating a merger. In the new entity is expected to require an initial investment of $20 million which will then result in expense savings of $2.7 million for 15 years. The weighted average cost of capital is 8%. The firm just issued bonds at 6.5%. The company would expect the following financial result
Tuition is $10,000 per year for 4 years starting next year (that is, I will need to withdraw the first $10,000 on year from today). A deposit in a bank will be made today; bank will pay 7% interest, compounded annually, a sum of money that is sufficient to provide the 4 payments of $10,000 each. a) how large will the deposit
I need to set up an amortization schedule for a $25,000 loan to be repaid in equal installments at the end of the next 5 years. The interest rate is 10% compounded annually.
A. I need to set up an amortization schedule for a $25,000 loan to be repaid in equal installments at the end of the next 5 years. The interest rate is 10% compounded annually. b. How large must each annual payment be if the loan is for $50,000? Assume that the interst rate remains at 10%, compounded annually, and that the lo
P3-41. Jill Chew wishes to choose the best of four immediate retirement annuities available to her. In each case, in exchange for paying a single premium today, she will receive equal annual end-of-year cash benefits for a specified number of years. She considers the annuities to be equally risky and is not concerned about their
P3-29. Mary Sullivan, capital outlay manager for Waxy Widgets, has been instructed to establish a contingency fund to cover the expenses over the next two years (24 months) associated with repairing defective widgets from a new production process. Waxy Widgets' controller wants to make equal monthly cash deposits into this fund.
P3-28. Determine the annual payment required to fund a future annual annuity of $12,000 per year. You will fund this future liability over the next five years, with the first payment to occur one year from today. The future $12,000 liability will last for four years, with the first payment to occur seven years from today. If you
Equivalent Annual Cost: The Oklahoma Electric Company (OEC) is currently evaluating two different options to control the emissions from their coal-burning electric generation facility in Dewar.
The Oklahoma Electric Company (OEC) is currently evaluating two different options to control the emissions from their coal-burning electric generation facility in Dewar. A filtration system will cost $12 million to install and $700,000 per year to operate. The filtration system, which will have a salvage value of zero at the end
P3-15. For the following questions, assume an end-of-year cash flow of $250 and a 10 percent discount rate. a. What is the present value of a single cash flow? b. What is the present value of a 5-year annuity? c. What is the present value of a 10-year annuity? d. What is the present value of a 100-year annuity? e. What is
P3-14. Assume that you just won the state lottery. Your prize can be taken either in the form of $40,000 at the end of each of the next 25 years (i.e., $1 million over 25 years) or as a lump sum of $500,000 paid immediately. a. If you expect to be able to earn 5 percent annually on your investments over the next 25 years, ign
Please see the attached file. 1) Fisher Effect Year Expected rate of inflation Observed rate of inflation Expected real interest rate 2008 5% XX 1.5% 2007 4% 3.5% 3% a. Define the Fisher Effect and explain why expected inflation should have an impact on the nominal rate of interest? b. Today is January 1, 2008. What
NPV/IRR. Consider projects A and B. Cash Flows, Dollars Project C0 C1 C2 NPV at 10% A -30,000 21,000 21,000 +$6,446 B -50,000 33,000 33,000 + 7,273 Calculate IRRs for A and B. Which project does the IRR rule suggest is best? Which project is really best?
(Comprehensive Depreciation Computations) Sheryl Crow Corporation, a manufacturer of steel products, began operations on October 1, 2006. The accounting department of Crow has started the fixed-asset and depreciation schedule presented on page 563. You have been asked to assist in completing this schedule. In addition to ascert