Answered: 4. How much money will accumulate that…

4. How much money will accumulate that generates a cash flow of P1000 every year for the next 8 years. Given an annual interest rate of 6%.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 14EB: How much must be invested now to receive $50,000 for 8 years if the first $50,000 is received in one...

See similar textbooks

Related questions

Q: n annuity pays $4152 per month, and payments are made at the end of each month. If the interest rate…

A: Present value of annuity can calculated by using Excel PV function.

Q: year 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 TCL operating cash flow Annual growth rate…

A: Given , The initial outlay is 2535.10 Discount rate is 12%

Q: the table below. Name Dividends Yield Series X 8.0% 10.5% Series Y 7.2% 9.8% Series Z 6.5% 11.1%…

A: Price of preferred stock can be calculated from dividend and yield on the dividend.

Q: 2) are paid the bank rate plus 50 basis points

A: Bank rate refers to the rate at which the domestic banks are provided short loans by the nation’s…

Q: Please provide the given, required, and complete solution with units. Thank you. At age 30,…

A: As the number of compounding increases the effective interest rate increases and there is more…

Q: A series of 12 annual payments of $7500 is equivalent to three equal payments at the end of years 6,…

A: Compound interest is defined as an addition of an interest to the sum of interest of the deposit or…

Q: ONO has negotiated a put option contract for 250,000 ounces of gold at an exercise price of $290/oz.…

A: Here, Contract Size of Put Option is 250,000 ounces Exercise Price (K) is $290/oz Option Premium is…

Q: A year ago, an investor bought 200 shares of a mutual fund at $7.58 per share. This year, the fund…

A: Here, No. of Shares Purchased is 200 shares Purchase Price per share is $7.58 Dividend per Share is…

Q: money is invested at a nominal rate of interest of 8% for a period of 4 ye effective rate if it is…

A: The effective rate is the rate considering the effect of compounding on the interest rate and always…

Q: Lindsay is 25 years old and has a new job in web development. She wants to make sure that she is…

A: Time Period in Retirement is 30 years Investment Amount per year is $12,000 Interest Rate is 11%

Q: A pension fund manager is considering three mutual funds. The first is a stock fund, the second is a…

A: Here,

Q: Types of Annuities 1)ldentify the type of annuity and calculate the number of payments during the…

A: Time value of money (TVM) is used to measure the value of money at different point of time in the…

Q: QUESTION 2 Suppose a University has an endowment of 706 million dollars placed in a bank account…

A: Perpetuity means an infinite number of equal payments for an indefinite period. It is a type of…

Q: Q5. At 5% annual interest, what is the difference in the present and future value of P100 paid at…

A: Given, Annual interest rate is 5% Payment made is P100 term is 10 years

Q: A federal government bond with a 16-year maturity and an annual coupon rate of 10% (coupons are paid…

A: Given that: Annual Coupon rate=10% then semi annual coupon rate (PMT)=10%/2=5% Future Value(FV) =…

Q: $600 deposited yearly in an annuity account that pays 12% per year and compounds once yearly. How…

A: Future Value of Ordinary Annuity refers to the concept which determines the sum total of all the…

Q: Ciana wants to take out a $7,500 loan with a 5.3% APR. She can afford to pay $128 per month for loan…

A: The given payments are a form of annuity wherein an equal payment is made at eqaul intervals. The…

Q: A grandmother leaves all of her assets to a charity except three items. She leaves her house, a car,…

A: Here,

Q: Joel is considering putting a $2200 laptop purchase on his credit card, which has an interest rate…

A: The number of payments can be calculated with the help of NPER function of Excel

Q: operating income (EBIT) f

A: “Since you have posted a question with multiple sub-parts, we will solve first three subparts for…

Q: How much is the sum of the present value of the expected return over those periods

A: Cash Flows (Year 1-10) (CF) = $15,000 per year Annual interest rate (r) = 5% Time Period (t) = 10…

Q: J&R Renovation, Inc., is trying to determine its cost of debt. The firm has a debt issue outstanding…

A: a) Pre Tax cost of debt: Interest rate found out using Financial Calculator N = 14 * 2 = 28 PMT =…

Q: ILK has preferred stock selling for 97 percent of par that pays an 8 percent annual coupon. What…

A: The cost of preferred stock is calculated as ratio of preferred dividend and the preferred stock…

Q: some property which has an assessed value of $240,500. If the tax rate is 65.90 mills, calculate the…

A: There are taxes to be paid on the property according the prevailing tax rate and amount of tax due…

Q: T

A: The price at which an asset is available for sale in the marketplace is known as market value. This…

Q: What’s one personal finance lesson that you find important?

A: Handling the reality of personal money may be difficult, even for an adult with a lot of…

Q: For $150,000, Continental Life Insurance Co. will sell a 20-year annuity paying $1200 at the end of…

A: An annuity is usually used in the retirement funds where fixed future amounts are paid in exchange…

Q: 16. Jolynn had an average daily balance of $415.22 on his May credit card statement. The bill showed…

A: The finance charge will depend upon the APR and the time period for which the balance was due.

Q: hat is the contribution of fintech in developing a single financial market?

A: Fintech is the use of technology and computer and internet for the field of finance and banking and…

Q: Question 3a continued. The coupon rate experienced by the investor is Y percent. What is Y? 0.1…

A: The coupon rate is the annual interest rate on the bond. The capital gains yield in the capital gain…

Q: 9. Which of the following is not a limitation of the proprietorship form of business? a. Unlimited…

A: A sole proprietorship is a business owned, managed, and managed by one individual. The sole…

Q: deposit $200 at the end of each month for 10 years. If the account pays 7.5% compounded monthly, how…

A: Future Value of Annuity: It is the future worth of the current cash flow stream and is computed by…

Q: Green Grow Energies, Inc. reported a taxable income of $87,599,200 last year. What was their net…

A: 1) Corporate Taxes Paid: The corporate tax rate is 21%. So, Corporate tax = $87,599,200 * 21% =…

Q: 2. A Machine costs $30,000 to purchase . Salvage value of the machine after 5 years = $7000.…

A: Capital recovery cost refers to those equivalent annual cost of the company which is used to recover…

Q: Is DDM and CAPM suppose to be the same numbe

A: There are many ways to do valuation of stock one is DDM and other is CAPM these are two important…

Q: Mint Industries has a target debt-equity ratio of 0.60, a cost of equity of 10%, and one issue of…

A: WACC of the company is calculated as sum of weighted cost of capital of each source

Q: 8. An employee is earning P12,000 a month and he can afford to purchase a car which will require…

A: Given that: Employee's Income=$12000 Maximum EMI that the Employee can afford is 30% of the income=…

Q: Suppose the risk-free return is 3.5% and the market portfolio has an expected return of 11.9% and a…

A: a) Beta with respect to market: = (Volatility of Security * Correlation of security with market)/…

Q: Thangmo Company is a large manufacturing firm in Cherating that was created 20 years ago by the…

A: The bond interest rates are expected to go up as the bonds are now backed up by the government…

Q: Determine the total budgeted sales for the entire quarter ending March 31st.

A: Given: Budgeted Sales for 5 months Month Budgeted sales (in Units) January 16250 February…

Q: In order to have ₱1 million in a fund at the end of 15 years, how much must be deposited in the fund…

A: Future value (FV) is ₱1,000,000. The maturity period is 15 years. The interest rate is 10.5%. The…

Q: Calculate the reduced paid-up insurance for Lee Chin, age 41, who purchased a $310,000 20-year…

A: An endowment policy is essentially a life insurance policy that, in addition to insuring the…

Q: quarterly. What is the value of the annuity at the end of the 12 years and how much of the value is…

A: An annuity is the type of payment plan where we exchange a lump sum amount for periodic fixed…

Q: Assume that Greenwich and Pizza Hut have similar P100,000 par value bond issues outstanding. The…

A: A bond is a debt instrument through which a company raises capital. Like loans, it has to be repaid…

Q: what is the maximum yield rate the investor can earn?

A: The price of a bond refers to the amount which an investor should pay for an existing bond. It is…

Q: A B 1 Particulars Values 2 Future Value (FV) 3 Interest rate Compounded monthly (I/Y) |0.05 4…

A: When interest is compounded monthly, the interest rate per annum shall be divided by 12 to calculate…

Q: 1. Nataja Mumbai Ltd., the Indian subsidiary of a Belgian corporation, is a cardiothoracic…

A: Current Rate Method and Temporal rate method: It is the standard method of currency translation…

Q: a. Use the appropriate formula to find the value of the annuity. b. Find the interest. Periodic…

A: Monthly payment (M) = $80 r = 7% per annum = 7%/12 per month = 0.5833% per month n = 35 years = 420…

Q: You have $100 a month you can deposit into an account earning 3.9% APR, compounded monthly. How long…

A: Given that: Accumulated Value (A)=$10000 Principal amount (P)=$100 Interest rate (R)=3.9%=0.039 t=?…

Q: Kirk, Klein & Co. requires $108,000 fifteen years from now to retire a debt. A sinking fund (a) What…

A: Loan: It is the amount due to the lender by the borrower and the borrower pays periodic payments to…

Question

Please include a drawing of cashflow diagram

4. How much money will accumulate
that generates a cash flow of P1000
every year for the next 8 years. Given an
annual interest rate of 6%.

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 1 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.

Similar questions

If you invest $12,000 today, how much will you have in (for further Instructions on future value in Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at l5% D. 19 years at 18%
If you invest $15,000 today, how much will you have in (for further instructions on future value in Excel, see Appendix C): A. 20 years at 22% B. 12 years at 10% C. 5 years at 14% D. 2 years at 7%
Assume that an investment of 100,000 produces a net cash flow of 60,000 per year for two years. The discount factor for year 1 is 0.89 and for year 2 is 0.80. The NPV is a. 0 b. 6,800 c. 1,400 d. (4,000)
How much would you invest today in order to receive $30,000 in each of the following (for further Instructions on present value In Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at 15% D. 19 years at 18%
An investment of 1,000 produces a net cash inflow of 500 in the first year and 750 in the second year. What is the payback period? a. 1.67 years b. 0.50 year c. 2.00 years d. 1.20 years e. Cannot be determined
How much must be invested now to receive $50,000 for 8 years if the first $50,000 is received in one year and the rate is 10%?
How much would you invest today in order to receive $30,000 in each of the following (for further instructions on present value in Excel, see Appendix C): A. 20 years at 22% B. 12 years at 10% C. 5 years at 14% D. 2 years at 7%
What is the present worth of cash flows that begin at $10,000 and increase at 8% per year when N is 4 years? The interest rate is 6%.
4. What rate of interest, compounded annually, willresult in the receipt of $15938.48 if $10000 is investedfor 8 years?include a cash flow
a) What’s the rate of return you would earn if you paid $1,500 for a perpetuity thatpays $105 per year? b) At a rate of 8%, what is the present value of the following cash flow stream?$0 atTime 0; $100 at the end of Year 1; $300 at the end of Year 2; $0 at the end of Year 3;and $500 at the end of Year 4?
SOLVE AND DRAW THE CASHFLOW DIAGRAM. A. If money is worth 4% compounded monthly, what payment at the end of each quarter will replace payments of P500.00 monthly? B. What is the present worth of a P1,000.00 annuity over a 10 year period, if interest rate is 8%?
Assume that you will receive $2,000 a year in Years 1 through 5, $3,000 a year in Years 6through 8, and $4,000 in Year 9, with all cash flows to be received at the end of the year. Ifyou require a 14 percent rate of return, what is the present value of these cash flows? a. $ 9,851b. $13,250c. $11,714d. $15,129e. $17,353