A company is planning on spending $24,900 to upgrade their equipment in 4 time. How much must they deposit monthly into an account earning j12=3% in order to bave enough money for the new equipment? years Your Answer:

A company is planning on spending $24,900 to upgrade their equipment in 4 time. How much must they deposit monthly into an account earning j12=3% in order to bave enough money for the new equipment? years Your Answer:

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 30P

See similar textbooks

Related questions

Q: An engineer who is about to retire has accumulated $50 000 in a savings account that pays 6% per…

A: Present Value of Ordinary Annuity refers to the concept which dictates the discounted value of a sum…

Q: A factory wants to invest in a washing machine which will reduce their monthly expenses. The asset…

A: Present value of annuity formula is used to calculate the amount of monthly savings required for the…

Q: To save money for a new house, you want to begin contributing money to a brokerage account. Your…

A: Calculation of value in brokerage account in nine years:Firstly, convert 9% return into quarterly…

Q: One university needs some maintenance. The owner of the university decides to deposit $400000 in an…

A: Present worth can be calculated as below Present worth = Cash flow / (1+r)^n It can also be…

Q: A company plans to buy new equipment in 6 years. They will start by saving $3,091 at the end of this…

A: The given answer is correct

Q: You are a real estate agent thinking of placing a sign advertising your services at a local bus…

A: The payback period is simply calculated as ratio of initial cost and periodical cash flow

Q: A new engineer wants to save up P1,000,000. He will contribute P5,000 annually to an investment…

A: Introduction:- The devotion of an asset to achieve a gain in value through time is referred to as an…

Q: Define the symbols involved when a construction company wants to know how much money it can spend 3…

A: Interest charged on the principal amount and the interest accrued is known as Compound Interest. It…

Q: Lush Gardens bought a new truck for $85,000. It paid $10,000 as a down payment and financed the…

Q: A young engineer’s starting salary is $52,000. The engineer expects annual raises of 3%. The…

A: Interest charged on the principal amount and the interest accrued is known as Compound Interest. It…

Q: 2. You bought a $30,000.00 machine with $6,000.00 down payment and agreed to pay for the rest at 1%…

A: The question is based on the concept of Financial Management. Annuity refers to the amount of equal…

Q: A company wishes to make 5 equal annual investments so that on the date of the last investment, it…

A: Equal investment = 5 Cost of machine = $50,000 Interest rate = 4%

Q: A company plans to buy new equipment in 25 years. They will start by saving $1,370 at the end of…

A: Saving at the end of year = $ 1370 Annual growth rate = 3.5% Annual interest rate = 15.3% Period =…

Q: Rudy Anne wants to buy new farm equipment costing P350,000 making a down payment of P50,000. The…

A: In the context of the given question, we are required to compute the monthly amount of payments.…

Q: A store plans on investing on a new grill oven that costs P100,000. It will generate revenues of…

A: Net present value method(NPV): NPV considers time value of money and is used for analyzing…

Q: To save up for your dream business, you committed to deposit P2,000, starting today, every month in…

A: Present value (PV)= P2,000 Interest rate (r)= 6% Number of period (n)= 5 Future value (FV)

Q: You expect that you will need to replace your furnace in 4 years at a cost of $15,228. How much must…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: You are a real estate agent thinking of placing a sign advertising your services at a local bus…

A: The payback period is the time to recover the cost of investment.

Q: In order to finance a new product line, a company that makes high-temperature ball bearings borrowed…

A: Loan is an agreement between lender and borrower where lender agrees to provide funds to borrower.…

Q: ABC company has just purchased a life truck that has a useful life of 5 years. The engineer…

A: Present value is the current value of future cash flows.

Q: How much would tom’s initial balance have to be? show work and formula

A: Present Value of Future Amount = FV / (1 + r)^n Here, FV = Future Value i.e. $30000 r = Periodic…

Q: Your company will generate GH¢ 55,000 in annual revenue each year for the next eight years from a…

A: NPV is the sum of future cashflows less initial cost

Q: A production company is planning to open up another manufacturing setup in order to cope up with…

A: A study that proves that the future worth of the money is lower than its current value due to…

Q: Ten years ago, you deposited P5400 per month. You made the deposit for 6 years and then stopped. 4…

A: Calculations are done in excel so there is no intermediate rounding effective monthly interest rate…

Q: You have decided to set aside a fixed amount every quarter in order to have $12,000 available for a…

A: The amount to be deposited every quarter can be calculated with the help of future value of annuity…

Q: An item will need replacing in 6 years from now at a cost of P128,000.00. How much should the owner…

A: The worth of money changes with time, therefore the TVM considers the value of money according to…

Q: You financed a boat for $12,500 boat at an APR of 6.25% over 4 years. How long will it take to pay…

A: Present Value of annuity refers to the present value of all the future payments of and series of…

Q: determine how much can we afford to invest to overhaul this machine

A: Present value refers to the current valuation for a future sum. For a given periodic cash flow, the…

Q: An engineering technology group just purchased a software for $7,000 now and annual payments of $300…

A: Note:We’ll answer the first question since the exact one wasn’t specified. Please submit a new…

Q: An item will need replacing in 6 years from now at a cost of ₱128,000.00. How much should the owner…

A: The present value is the value of the sum received at time 0. It is the current value of the sum…

Q: Food Corporation of dalican wants money to construct a new granary. If the granary will cost…

A: In this we need to find out future value factor and from that we can get the quarterly deposit.

Q: Two years ago, the Fun Center deposited $3,200 in an investment account for the purpose of buying…

A: given,r = 6.85% A-2= $3200 A0= $5000 A1= $3500

Q: You wish to have $4,000 in 2 years to purchase a new entertainment system. How much money (to the…

A: Future value of an annuity: It represents the future value of the present annuity stream of cash…

Q: The owners of a condominium building wish to save enough money to replace the roof on their building…

A: Using excel PMT function

Q: A condominium unit can be bought at a down payment of ₱150,000 and a monthly payment of ₱ 21,170 for…

A: In this problem we have to calculate the present value of monthly payment and add to that down…

Q: In an effort to save money for early retirement an environmental engineering collegue plans to…

A: This problem belongs to future value of annuity due. since payment is at the start of the month.

Q: You are a real estate agent thinking of placing a sign advertising your services at a local bus…

A: Payback period is reflective of the period within which the total cost and investment incurred by…

Q: A) If a company will pay $75,000 for a truck that will increase deliveries to be made which will…

A: The decision should be based on the Net Present value.

Q: A supermarket can purchase an automated checkout machine for $100,000 (to be paid in year 0) that…

A: We will determine the present value of costs of both alternatives. The alternative with lower…

Q: A real estate development company is planning to build five homes, each costing $155,000, in 2…

A: N = Time Period = 5 semi annual periods Future Value Required = Cost of each home * Number of homes…

Q: You have decided to set aside a fixed amount every quarter in order to have $15,000 available for a…

A: Future Value of investment = $15,000 Time period = 3 years Interest Rate = 5% The investment is…

Q: A small business has determined that the machinery they currently use will wear out in 17 years. To…

A: The question is based on the concept of Financial Management.

Q: A company has had record profits and decided to use some of the profits to pay for manufacturing…

A: Annuity is the series of payment made by an investor at fixed interval for specified period of time.…

Q: You expect that you will need to replace your furnace in 4 years at a cost of $16,716. How much must…

A: Given months = 30 cost = 16716 APR = 2.91%

Q: Mr. Holzman estimates that the maintenance cost of a new car will be 3,750 the first year, and will…

A: Maintenance cost in year 1 (M1) = 3750 M2 = 6250 M3 = 8750 M4= 11250 M5 = 13750 M6 = 16250 r = 5.5%…

Q: A new car will cost $24,000 to buy and $5500 annually to operate. If it is sold for $9300 after 6…

A: EUAC is the equivalent annual cost of operating machinery it includes initial cost and an annual…

Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

) Listen
A company is planning on spending $24,900 to upgrade their equipment in 4 years
time. How much must they deposit monthly into an account earning j12=3% in order
to have enough money for the new equipment?
Your Answer:
Answer

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

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

Shonda & Shonda is a company that does land surveys and engineering consulting. They have an opportunity to purchase new computer equipment that will allow them to render their drawings and surveys much more quickly. The new equipment will cost them an additional $1.200 per month, but they will be able to increase their sales by 10% per year. Their current annual cost and break-even figures are as follows: A. What will be the impact on the break-even point if Shonda & Shonda purchases the new computer? B. What will be the impact on net operating income if Shonda & Shonda purchases the new computer? C. What would be your recommendation to Shonda & Shonda regarding this purchase?
Now assume that it is several years later. The brothers are concerned about the firm’s current credit terms of net 30, which means that contractors buying building products from the firm are not offered a discount and are supposed to pay the full amount in 30 days. Gross sales are now running $1,000,000 a year, and 80% (by dollar volume) of the firm’s paying customers generally pay the full amount on Day 30; the other 20% pay, on average, on Day 40. Of the firm’s gross sales, 2% ends up as bad-debt losses. The brothers are now considering a change in the firm’s credit policy. The change would entail: (1) changing the credit terms to 2/10, net 20, (2) employing stricter credit standards before granting credit, and (3) enforcing collections with greater vigor than in the past. Thus, cash customers and those paying within 10 days would receive a 2% discount, but all others would have to pay the full amount after only 20 days. The brothers believe the discount would both attract additional customers and encourage some existing customers to purchase more from the firm—after all, the discount amounts to a price reduction. Of course, these customers would take the discount and hence would pay in only 10 days. The net expected result is for sales to increase to $1,100,000; for 60% of the paying customers to take the discount and pay on the 10th day; for 30% to pay the full amount on Day 20; for 10% to pay late on Day 30; and for bad-debt losses to fall from 2% to 1% of gross sales. The firm’s operating cost ratio will remain unchanged at 75%, and its cost of carrying receivables will remain unchanged at 12%. To begin the analysis, describe the four variables that make up a firm’s credit policy and explain how each of them affects sales and collections.
Conestoga Plumbing plans to invest in a new pump that is anticipated to provide annual savings for 10 years of $50,000. The pump can be sold at the end of the period for $100,000. What is the present value of the investment in the pump at a 9% interest rate given that savings are realized at year end?
A restaurant is considering the purchase of new tables and chairs for their dining room with an initial investment cost of $515,000, and the restaurant expects an annual net cash flow of $103,000 per year. What is the payback period?
Gardner Denver Company is considering the purchase of a new piece of factory equipment that will cost $420,000 and will generate $95,000 per year for 5 years. Calculate the IRR for this piece of equipment. For further Instructions on internal rate of return in Excel, see Appendix C.
One year ago, JK Mfg. deposited $12,000 in an investment account for the purpose of buying new equipment four years from today. Today, it is adding another $15,000 to this account. The company plans on making a final deposit of $10,000 to the account one year from today. How much will be available when it is ready to buy the equipment, assuming the account pays 5.5 interest? solve using financial calculator please
One year ago, JK Mfg. deposited $20,500 in an investment account for the purpose of buying new equipment four years from today. Today, it is adding another $15,000 to this account. The company plans on making a final deposit of $10,000 to the account one year from today. How much will be available when it is ready to buy the equipment, assuming the account pays 3.5 interest?
The VEEtile company aims to have enough money to invest into a new grader equipment in 4 years. If the equipment will cost $250,000, how much should the company allocate now if the account earns a. 10% simple interest? b. 10% compounded semi-annually?
Atlas Moving and Storage wants to have enough money to purchase a new tractor-trailer in 4 years at a cost of $290,000. If the company sets aside $4000 in month 1 and plans to increase its set aside by a uniform amount each month, how much must the increase be provided the funds earn 6% per year compounded monthly?
A small business has determined that the machinery they currently use will wear out in 18 years. To replace the new machine when it wears out, the company wants to establish a savings account today. If the interest rate on the account is 1.5 percent per quarter and the cost of the machinery will be $320,000, how much will the company have to deposit today?
Skyline Industries will need $2.2 million in 4.5 years from now to replace some equipment. Currently, the firm has some extra cash and would like to establish a savings account for this purpose. The account pays 3.6 percent interest, compounded annually. How much money must the company deposit to fully fund the equipment purchase? Can the calculator and excel solution be provided?
One year ago the Jenkins Family Fun Center deposited $5000 in an investment account for the purpose of buying new equipment four years from today. Today, they ae adding another $$6800 to this account. They plan on making a final deposit of $9000 to the account next year. Hoow wmuch will be available when they are ready to buy the equipment, assuming they earn 8-percent rate of return