May I know the solution? 5. In an investment, I have a full payback with an amount of P500,000.00 after 20.9123 years. If we initially agreed on an 8% rate of return, compared with theprincipal, how many times did my investment had after the mentioned period? (ans. 5 times)6. Consider the data from practice prob. 5, what is the amount of the principal? (ans. P100,000.00)

5. To calculate the number of times first we need to calculate the present value then, divide the…

Answered: 5. In an investment, I have a full…

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 5PB: Mason, Inc., is considering the purchase of a patent that has a cost of $85000 and an estimated...

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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)
Falkland, Inc., is considering the purchase of a patent that has a cost of $50,000 and an estimated revenue producing life of 4 years. Falkland has a cost of capital of 8%. The patent is expected to generate the following amounts of annual income and cash flows: A. What is the NPV of the investment? B. What happens if the required rate of return increases?
Mason, Inc., is considering the purchase of a patent that has a cost of $85000 and an estimated revenue producing lite of 4 years. Mason has a required rate of return that is 12% and a cost of capital of 11%. The patent is expected to generate the following amounts of annual income and cash flows: A. What is the NPV of the investment? B. What happens if the required rate of return increases?
1. If the investment is expected to earn revenue of P4,000,000, with cash expenses amounting to P1,500,000 each over its life, What is the payback period in years? 2. If the investment is expected to earn increase revenue by P750,000 annually with cash savings on expenses of P120,000 each over its life, what is the accounting rate of return of this investment?
An investor receives $1,050 in 6 months in return for an investment of $1,000 now. What is the equivalent annual nominal return on this investment with continuous compounding? a. 10.00% b. 4.88% c. 9.76%
The ordered pairs (0 , 5000) and (10 , 13591.41) represent the value of an investment at two different times: When the investment was made, and 10 years later. Let f(t), where t is time in years, be the linear function so that the above points lie on its graph. Then, using f(t), the value of the investment after 12 years is R_______ 1. Fill in the blank, If the interest rate for the investment is 10% per annum, compounded continuously, then the absolute error in approximating the value of the investment after 12 years with f(t) is R____ Fill in the blank
You are looking to invest in a project. The expected return of 5% is used as the discount rate. The initial investment is P6 million and the project will last for five years, with the following estimated cash flows per year: P500,000; P600,000.00; P700,000.00; P300,000.00; P200,000.00 and P100,000.00 respectively.. A. Compute for Net Present Value B. How many percent is the Internal rate of Return?
An investment will pay $725 in 2,3,4 and 5 years from now. Furthermore, it will pay $4,400 in 9, 10 and 11 years. What is the most you would pay for this investment if you require a 10% return? answer in dollars without the symbol.
(3) Today you have paid $275 for an investment that pays $100 in one year, $500 in two years,and $X in 4 years. Assuming the market interest rate is 100% and the net present value of theinvestment is zero, what must be true about X?(a) X is greater than $2,500(b) X is greater than or equal to $2,000 but less than $2,500(c) X is greater than or equal to $1,500 but less than $2,000(d) X is greater than $1,200 but less than $1,500(e) X is less than or equal to $1,200
1)Let’s say we wanted to find the amount of interest you would get in only the 4th year if the annual interestwas a consistent 24.67% and we initially put in $1000.00 into the investment. Which equation do we use?And once you know that, what is the interest? 2)Great work. Now let’s find the total amount of the investment after the 4 years. Remember first we needto find the total interest gained by using the sum equation above, then add that to the initial investment.
Suppose that you have $9,000 in a rather risky investment recommended by your financial advisor. During the first year, your investment decreases by 40% of its original value. During the second year, your investment at the end of year one increases by 50%. Your advisor tells you that there must have been a 10% an overall increase of your original $9,000 investment. Is your financial advisor using percentages properly? If not, what is your actual percent gain or loss of your original $9,000 investment?
1. What rate of interest compounded annually must be received if an investment ofPhp5,400 made now will result in a receipt of Php7,200 5 years hence?2. What amount will be accumulated by Php4,100 in 10 years at 6% compoundedannually?

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