ANSWER EVERYTHING AND PLEASE DO THIS TYPEWRITTEN FOR UPVOTE 6. (EQUATION OF VALUES) What single payment at the end of 6 years would replace thefollowing debts? A. Php29,000 due in 1 year without interest; B. Php690,000 due in 8 years at 14%compounded quarterly; Money is worth 8.5% effective (compounded semi-annually).

Discount Rate = 8.5% compounded Semi- Annually Obligation 1 : Php 29,000 due at the end of 1 year…

Answered: 6. (EQUATION OF VALUES) What single…

EBK CFIN

6th Edition

ISBN:9781337671743

Author:BESLEY

Publisher:BESLEY

Chapter4: Time Value Of Money

Section: Chapter Questions

Problem 21PROB

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You put $600 in the bank for 3 years at 15%. A. If Interest Is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the third year. B. Use the future value of $1 table In Appendix B and verify that your answer is correct.
If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the next eight years, how much will be accounted for as a current portion of a noncurrent note payable each year?
(1) What is the value at the end of Year 3 of the following cash flow stream if the quoted interest rate is 10%, compounded semiannually? (2) What is the PV of the same stream? (3) Is the stream an annuity? (4) An important rule is that you should never show a nominal rate on a time line or use it in calculations unless what condition holds? (Hint: Think of annual compounding, when INOM = EFF% = IPER.) What would be wrong with your answers to parts (1) and (2) if you used the nominal rate of 10% rather than the periodic rate, INOM/2 = 10%/2 = 5%?

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6. (EQUATION OF VALUES) What single payment at the end of 6 years would replace the following debts? A. Php29,000 due in 1 year without interest; B. Php690,000 due in 8 years at 14% compounded quarterly; Money is worth 8.5% effective (compounded semi-annually).