A contract calls for semiannual payments of P40,000 for the the next 10 years and an additional payment of P250,000 at the end of that time. Find the equivalent cash value of the contract at 7% compounded semiannually P598,589.00 P752,777.00 O P694,138.00 P444,526.25

A contract calls for semiannual payments of P40,000 for the the next 10 years and an additional payment of P250,000 at the end of that time. Find the equivalent cash value of the contract at 7% compounded semiannually P598,589.00 P752,777.00 O P694,138.00 P444,526.25

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter5: The Time Value Of Money

Section: Chapter Questions

Problem 41P

See similar textbooks

Related questions

Q: Prepare correcting entries as of December 31, 2020 7. The delivery expense of P 1,800 incurred on Oc...

A: When transactions occur as part of the business operations of a company, records will be made accord...

Q: Assume no other adjusting entries are made during the year. a. Unearned Rent Revenue. The Krug Compa...

A: Unearned Rent Revenue: It is a liability account, with its regular balance on the credit side, while...

Q: Required information Exercise 6-5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume ...

A: Cost volume profit analysis is the technique used by the management for decision-making. The methods...

Q: Jalapeño Corporation and Habanero Corporation formed a partnership to construct a restaurant. Jalape...

A: Partnership characteristics includes: Existence of an agreement Existence of business Sharing of pr...

Q: $ 975,000 Common stock-$15 par value, 150,000 shares authorized, 65,000 shares issued and outstandin...

A: Shares issued = 65000 shares Stock dividend = 2% Stock's market value = $ 36 The question requires s...

Q: A. Management has developed a new inventory management system that it projects will reduce company i...

A: The cash would be increased if the inventory would be decreased and accounts payable would be increa...

Q: Define Permanently Restricted Contributions based on the U.S. GAAP SFAS. Define Restricted Support ...

A: Generally accepted accounting principles (GAAP) are a set of accounting principles, standards, and p...

Q: rates rise, bor

A: The correct option is shown as,

Q: Strategy Telecom (ST) made one of the largest single purchase of long-distance telephone time in ST ...

A: Ans. Rp1,200,000

Q: CARIBBEAN CREAM LIMITED Statement of Financial Position February 28, 2021 (Expressed in Jamaica doll...

A: Financial ratios: It is analysis of financial statements where ratios are created from Numerical va...

Q: 341,000 Fair value of plan assets, Jan. 1 Contributions to the retirement fund during the year Benef...

A: Introduction: Plan assets are assets/investments kept by a long-term employee benefit fund for the p...

Q: CONGRATULATIONS Company recently acquired two items of equipment. • Acquired a press at an invoice p...

A: A company's physical or tangible long-term assets having a life expectancy of more than a year are r...

Q: Required information [The following information applies to the questions displayed below.] Evergreen...

A: Journal entry - It refers to the process where the business transactions are recorded in the books o...

Q: The X Division of XYZ Ltd produces wooden components that it both sells to external customers and tr...

A: Transfer pricing is one of the methodology which is used for setting the prices at which product can...

Q: Which of the following would not be a period cost? Group of answer choices Sales commissions. Accoun...

A: Period costs include those costs which cannot be directly associated with the manufacturing of the p...

Q: The X division of XYZ Company is currently operating at 60% capacity or 6,000 units. It produces a s...

Q: Using the FIFO method, prepare the following for the Assembly a. A physical flow schedule b. An equi...

A: FIFO termed as First in First Out which is a method inventory that determine the cost on the grounds...

Q: agree

A: In partnership normally the capital balances are adjusted as per interest ...

Q: E1. You deposited $10,000 in a savings account nine years ago. The account has earned 5.55% interest...

Q: A company reported that its bonds with a par value of $50,000 and a carrying value of $64,000 are re...

A: Cash flows from financing activities would be an outflow as a result of cash flow from retired bonds...

Q: Common coverage of HMOs include Annual Check-ups, confinements, laboratory fees, doctor's fees and d...

A: HMO stands for Health Maintenance Organization which covers a variety area of services provided to t...

Q: A printer cost P96,647. After making 600,000 prints the trade-in value of the copier would only be P...

A: Answer) Calculation of Book value after producing 150,000 copies Book value after producing 150,000 ...

Q: PARTNERSHIP OPERATION FOR NUMBERS 5 -7 On January 01, 2021, DEAN, POGI and GUAPO formed DPG Partners...

A: 5) Net loss = 500,000 6) Dean Capital = 550,000 7) Guapo Capital = 50,000 Explanation: 5) Pogi Be...

Q: To make money, we neëd make

A: Cash outflows may be regarded as payments of liquid cash by the entity towards various obligations s...

Q: GO RUSH Co.'s check register shows the following entries for the month of December: Date Checks...

A: Bank Reconciliation Statement is the statement in the tabular format that shows the difference in ea...

Q: Penbirch Electronics manufactures most of the components that make up its products. A company has ap...

A: When business has two alternatives one is to manufacture the product inside and other is to purchase...

Q: aceres Realty end its fiscal vear on June 30, 2019.

A: In accounting we follow Accrual Basis of Accounting. As per this basis we need t...

Q: If accounts receivable is projected to be $800,000 at the beginning of the next operating year and $...

A: The balance of sales made by an entity which is not received in cash or any or its equivalents is sh...

Q: Tanek Corp.’s sales slumped badly in 2017. For the first time in its history, it operated at a loss....

A: Contribution margin is the profit earned before considering the fixed cost which is to be borne by t...

Q: A company's sales in Year 1 were $380,000 and in Year 2 were $417,500. Using Year 1 as the base year...

A: Sales is the amount which is earned by company by selling its goods or services. Percentage change i...

Q: payment of a call premium of $10,000. The bonds D,000. We call these bonds prior to maturity on Sept...

A: These are the accounting transactions that are having a monetary impact on the financial statement o...

Q: A vehicle is valued at R161075. The deposit is 11% and residual 20% percent. The maturity period is ...

Q: Depreciation for Partial Periods Hathaway Company purchased a copying machine for $8,700 on October ...

A: Depreciation is considered as an expense charge on the value of the Asset. It can be calculated by u...

Q: Rox Corporation’s multiple-step income statement and retained earnings statement for the year ended ...

A: Solution Retained earning are the cumulative net earnings or profit of a company after accounting fo...

Q: uppose that the government has a wealth tay at the rate of 2% on the assessed value of wealth

A: Wealth tax is tax on wealth . In USA there is estate tax rathe...

Q: Ivanhoe Leasing Company agrees to lease equipment to Shamrock Corporation on January 1, 2020. The fo...

A: Lease term = 7 years Useful life of asset =9 years % of useful life to lease term = 7/9 *100 ...

Q: The chief accountant for Julius Co. provides you with the company's most recent income statement and...

A: Increase / Decrease in current assets and liabilities have impact on Operating activities of Cash fl...

Q: A machine with a cost of $144,000, accumulated depreciation of $92,000, and current year depreciatio...

A: Solution: Cash flow from investing activities of cash flow statement shows the cash generated or spe...

Q: E3. You loan from a bank the amount of P100,000 with a rate of simple interest of 30% but the intere...

A: The actual rate of interest is calculated as simple interest amount divided by funds available

Q: Problem 21-6 (IFRS- From FVPL to FVOCI) On January 1, 2021, Gerry Company purchased 6% bos with face...

A: Solution Income statement is a financial statement that shows you the company's Income and Expendit...

Q: Niosoki Auto Parts sells new parts for foreign automobiles to auto dealers. Company policy requires ...

A: Given That : Last shipment made for fiscal year ended on 31 august 2016 was recorded on document 21...

Q: XYZ Co has two divisions, X and Y. Division X makes a component for washing machines which it can on...

A: Transfer price refers is acknowledged as the price at which one division of an organization transfer...

Q: Financial ratio analysis is a widely used tool for assessing the "health" of an organization and ide...

A: Financial ratings are quantitative indicators that distinguish important information from a company'...

Q: Required information [The following information applies to the questions displayed below.] a. Wages ...

A: Solution A journal is a company's official book in which all business transaction are recorded in ch...

Q: rmer Company reports the following amounts on its statement of cash flow: Net cash provided by opera...

A: Ending Cash balance = Cash Flow from operating Activities + Cash Flow from Investing activities + Ca...

Q: Companies are required to report which of the following known liabilities Unearned Revenue OPayroll ...

A: Current Liabilities - Current Liabilities are the amount due to the company. But Company has not pai...

Q: True or False? You list the accounts on a Trial Balance in Ledger Order which is Assets, Liabilities...

A: The trial balance is prepared to record the final balance from the ledger accounts.

Q: Don't answer this if you already answered or you'll get a downvote. If you do this correctly and com...

A: The adjustment entries are prepared to adjust the revenue and expenses of the current period.

Q: True or False? You list the accounts on a Trial Balance in Ledger Order which is Assets, Liabilities...

A: On the trial balance, the order of accounts should be this: Assets, Liabilities, Equity, Revenues, a...

Q: Under EOQ approaches, order costs can be minimised by placing large, infrequent orders for inventory...

A: GIVEN Under EOQ approaches, order costs can be minimised by placing large, infrequent orders for ...

Concept explainers

Mortgages

A mortgage is a formal agreement in which a bank or other financial institution lends cash at interest in return for assuming the title to the debtor's property, on the condition that the obligation is paid in full.

Mortgage

The term "mortgage" is a type of loan that a borrower takes to maintain his house or any form of assets and he agrees to return the amount in a particular period of time to the lender usually in a series of regular equally monthly, quarterly, or half-yearly payments.

Question

A contract calls for semiannual payments of P40,000 for the the next 10 years
and an additional payment of P250,000 at the end of that time. Find the
equivalent cash value of the contract at 7% compounded semiannually
P598,589.00
O P752,777.00
P694,138.00
P444,526.25

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 Introduction -

VIEW

Step 2 solution -

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, accounting and related others by exploring similar questions and additional content below.

Similar questions

A contract calls for payments of $2800 at the end of every 6-month period for 8 years and additional payments of $6000 at the end of 5 years and $7500 at the end of 8 years. What is the present worth of the contract at 7.5% p.a. compounded continuously?
On 1st of December 2020, Mohamed entered in a Forward rate agreement 2*4 FRA with a fixed rate of 6.00% and a notional amount of $2,000,000. What will be the value of this contract on 11th of December, if the LIBOR-110 days is 6.15% & LIBOR - 50 days is 5.85%? * $-770 $-400 $740
Alolo has bought from YoBank a 3 versus 6 Forward Rate Agreement which is based on a notional principal amount of USD 5 million and an agreed rate of 2% per annum. At the start of the FRA period, the actual rate of interest is 1.5% per annum. Explain what will take place at the start of the Forward Rate Agreementperiod and calculate the reimbursable amount, assuming a 360-day year.
A company will receive payments of $8,000 per year for the next five years under a subscription contract. The first payment will be made at the beginning of the contract. Assuming an annual interest rate of 4% is appropriate, the present value of an ordinary annuity is 4.45182 x $8,000 = $35,615, and the present value of an annuity due is 4.62990 x $8,000 = $37,039. Which amount must the company record for this sale in accordance with generally accepted accounting principles (GAAP) if collection is reasonably assured? $37,039 $0 $40,000 $35,615
Ayola has bought from YoBank a 3 versus 6 Forward Rate Agreement which is based on a notional principal amount of USD 5 million and an agreed rate of 2% per annum. At the start of the FRA period, the actual rate of interest is 1.5% per annum. Briefly outline what will take place at the start of the Forward Rate Agreementperiod and calculate the reimbursable amount, assuming a 360-day year.
Alolo has bought from BolBank a 3 versus 6 Forward Rate Agreement which is based on a notional principal amount of USD 5 million and an agreed rate of 2% per annum. At the start of the FRA period, the actual rate of interest is 1.5% per annum. Explain what will take place at the start of the Forward Rate Agreementperiod and calculate the reimbursable amount, assuming a 360-day year.
A loan of P12, 500 is to be repaid with equal quarterly payments for one year with an interest of 6% compounded quarterly. Find the quarterly payment and construct an amortization schedule. Semi-annual payments of P1, 350 each are used to repay a loan for 3 ½ years at 5% compounded semiannually. Find the amount of the loan and construct the first four rows of the amortization table. An obligation of P35, 000 is to be repaid with equal monthly payments for 6 months with an interest of 15% compounded monthly. Find the monthly payment and construct an amortization schedule. Mr. Santos will deposit P10, 000 at the ABC bank at the end of each quarter for 2 years. If the bank gives out 9% compounded quarterly, find the amount to his credit just after the last deposit? What monthly payment into a sinking fund at 8% compounded semi –annually will be needed to raise P50, 200 at the end of 2 years and 6 months?
When deciding on a contract based on present value and a discount rate of 10%, what other factors must be considered? Contract 1 $900,000 signing bonus $850,000 at the end of each year for the next 5 years Contract 2 $200,000 immediate signing bonus $100,000 at the end of each year for the next five years $150,000 a year at the end of years 5 through 10 $1,000,000 a year at the end of years 11 through 40 Contract 3 $1,000,000 immediate signing bonus $500,000 at the end of year 1 $1,000,000 at the end of year 2 $1,500,000 at the end of year 3 $2,500,000 at the end of year 4 As part of the third offer he was also promised a $200,000 bonus for any year in which he was selected to play in the Pro Bowl All Star game. his agent figured there was a 25% probability of that occuring in each of the next 4 years.
A contract can be fulfilled by making an immediate payment of $3760, or equal payments at the end of every month for 4 years. What is the size of the monthly payments at 11% per annum compounded quarterly? The monthly payments are_____ (Round the final answer to the nearest cent as needed. Round all intermediate values to six decimal places as needed.) Please help me
. To pay off a P100,000 loan , it is required that 20 semi -annual payments that is increased byP500.00 be made . Determine the amount of the first payment if it is due six months after the loan is madeand interest Is 7% compounded semi-annually.A) P2,854 C) P102,038B) P4,182 D) P7,036
A contract can be fulfilled by making an immediate payment of $21,100 or equal payments at the end of every six months for 9 years. What is the size of the semi-annually payments at 10.6% compounded semi-annually? Question content area bottom Part 1 The payment is $enter your response here. (Round the final answer to the nearest cent as needed.
Two debt payments, the first in the amount of $1600.00 due today, and the second in the amount of $7200.00 due in 15 months with interest at 9.6% p.a. compounded quarterly, are to be settled by a payment of $3400.00 nine months from now and a final payment in 21 months. Determine the size of the final payment if the money is worth 12.12% p.a. compounded monthly. Select one: a. $5,787.66 b. $6,750.48 c. $5,400.00 d. $6,092.09