a) How much should you invest at 12% interest today if you want to receive TK.10,000 at the cnd of 3rd year; TK. 20,000 at the end of Sth year; and TK. 25,000 atthe end of 7th year if interest is compounded continuously?b) A company is thinking of acquiring fixed assets worth TK. 10 million onfinancial lease for five ycars at an interest rate of 12%. The lcase would beamortized over five years by equal annual installments. You are required tocalculate annual installment and show how lease is amortized over five years ifinstallment is paid at year cnd or at the beginning of the year.

Hi, there, Thanks for posting the question. As per our Q&A honor code, we must answer the first…

a) How much should you invest at 12% interest today if you want to receive TK. 10,000 at the cnd of 3rd year; TK. 20,000 at the end of Sth year; and TK. 25,000 at the end of 7th year if interest is compounded continuously? worth TK 10 million on aootc

a) How much should you invest at 12% interest today if you want to receive TK. 10,000 at the cnd of 3rd year; TK. 20,000 at the end of Sth year; and TK. 25,000 at the end of 7th year if interest is compounded continuously? worth TK 10 million on aootc

Intermediate Financial Management (MindTap Course List)

13th Edition

ISBN:9781337395083

Author:Eugene F. Brigham, Phillip R. Daves

Publisher:Eugene F. Brigham, Phillip R. Daves

Chapter19: Lease Financing

Section: Chapter Questions

Problem 2P: Lease versus Buy Consider the data in Problem 19-1. Assume that RCs tax rate is 40% and that the...

See similar textbooks

Related questions

Q: What will be the value of the investment after three years?

A: Future Value: It represents the future worth of the current sum amount. It is computed by the…

Q: 1. If a company has an opportunity to invest $85000 now for 16 years at 16% per year simple interest…

A: "Hi, Thanks for the Question. Since you asked multiple questions, we will answer the first question…

Q: At what rate must Rm50,000 to grow to 406,855 IN 15 years compounded annually? Select one: a. 18%…

A: Amount Invested = RM 50,000 Amount gro in 15 years = RM 406,855 Years(n) =15 Interest rate = r% let…

Q: Calculate the present value PV (in dollars) of an investment that will be worth $1,000 at the stated…

A: Given, FV of investment is $1000 Time is 3 years rate is 4% depreciating each year

Q: a. What single investment made today, earning 10 % annual interest, will be worth 10,000 TL at the…

A: Given information: Future worth is 10,000 Interest rate is 10% Number of years is 3

Q: Suppose an investment of P100,000 was made, and it matured to P104,070.70 after eight (8)…

Q: You are promised an 8 year streams of income from buying a new technology at the initial amount of…

A: Step 1 Given a certain rate of return, present value (PV) is the current value of a prospective…

Q: 1. Suppose Glenn invested P10,000 for 5 years with simple annual interest of 10%. What is the future…

A: “Hey, since there are multiple questions posted, we will answer first question. If you want any…

Q: Which of the following investments has a larger future value: Investment A, a $1,000 investment…

A: Given:

Q: 1. An initial investment of $5000 earns 8.8% interest, compounded continuously. What will the…

A: given information initial investment = $5000 interest rate = 8.8% time period = 12 years

Q: What is the accumulated value of the 5000 TL investment at the end of each year with 3% interest…

A: The accumulated value is calculated as future value of annuity

Q: What is the interest earned on a P100,000 investment if it is held for 20 years at 4.3% simple…

A: Under simple interest, Total interest per year remains the same and there is no concept of interest…

Q: Suppose you bought a 3 year CD for 22,000 with an APR of 3.76% compounded quarterly. How much…

A: Future value can be calculated using FV (rate, nper, pmt, [Pv], [type]) Rate The interest rate Nper…

Q: An investment of R20 000 accumulated to R45 200. If the applicable simple interest rate is 12% per…

Q: Assume you have $1600 to invest in a 4 year CD with an APR 2.8% compounded daily. When the CD…

A: Certificate of deposit (CD) A certificate of deposit (CD) is a type of savings account where the…

Q: If you invest 5000 dollars today at a compound interest rate of 10 percent, compounded…

A: Future value can be defined as the worth of money at a future date, computed in accordance with the…

Q: An investor put his money in an investment earning 10 1/2% simple interest rate per annum. If his…

A: simple interest formula: A=P×1+RT given, p 12.30 MILLION R=10.5% T=15 / 12 YEARS

Q: How much would an investor be willing to pay for an investment that guaranteed payments of $4,000 at…

A: Using excel PV function Where PMT is a periodic payment NPER is no. of periods RATE is rate per…

Q: What is the future value of GH¢ 1,200 a year for 40 years at 8 percent interest? Assume annual…

A: Annual deposit (P) = 1200 Interest rate(r) = 8% = 0.08 Years(n) = 40 Therefore, Future value = P*…

Q: Calculate the present value PV (in dollars) of an investment that will be worth $1,000 at the stated…

A: To calculate the present value we will use the below formula Present value = FV/(1-d)n Where FV -…

Q: How many years are needed for P40,000 to yield P13,756.66 if invested at 6% converted semi-annually…

A: Present value (PV)= 40,000 Interest amount = 13,756.66 Rate of interest = 6% Semi-annual interest…

Q: An nvestoy plan to invest in a business that willpro duce a continous income stream ovey the next 5…

A: Present value is the sum of money that must be invested in order to achieve a specific future goal.…

Q: Given invest $10000 an investment account paying 3.4507 interest, find the amount Mou would have…

A: Future value can be referred to as the value of an underlying asset or security at a future date.…

Q: Investment A costs P20,000 and pays back P23,000 two years from now. Investment B costs P16,000 and…

A: The concept of the time value of money states that the value of cash or money has a higher worth…

Q: You invest $50,000 for three years that will earn 3.6 percent compounded continuously. What will be…

A: Given Information: Amount invested=$50,000 Interest Rate=3.6% compounded continuously Time(in…

Q: If the current rate of interest is 5%, then the future value (FV) of an investment that pays $1,000…

A: The question is based on the concept of future value calculation of annuity payment, by use of…

Q: What is the present value of an investment that promises to pay you $ 1, 000 in five years if you…

A: Here, The present value is PV. The future value is FV. The maturity is n. The interest rate is r.

Q: . A sum of $145,000 is invested now and left for 8 years, at which time the principal is withdrawn.…

A: As there is more compounding more is effective interest rate and more is for monthly compounding.…

Q: 1. Investment in Sunrise Company is P 100,000 at the end of 5 years plus P 24,000 annually for 4…

A: Time value of money (TVM) refers to the method or technique which is used to measure the amount of…

Q: 2. If you invest P25,000 at 8% interest compounded annually, approximately how much money will be in…

A: The future value of a cash flow is the future worth of a cash flow at a certain rate of interest and…

Q: Suppose you invest $1000 at 6% per annum compounded annually. Approximately how many years would it…

A: In the given question we require to calculate the the number of years in which $1000 will become…

Q: Use the RSTUV method to obtain the solution. If P dollars are invested at r percent compounded…

A: Given, A = P*(1+r)^2

Q: Suppose that P dollars in principal is invested for t years at the given interest rates with…

A: In case of continuous compounding the assumption is that interest is constantly accruing. Here the…

Q: Calculate the present value PV (in dollars) of an investment that will be worth $1,000 at the stated…

A: given, Fv = $1000 n = 5 years r = -4%

Q: 8. Determine the future value at the end of two years of an investment of OMR3,000 made now and an…

A: Future value refers to the future worth of a money that has been invested now. Future value of money…

Q: A company is expected to result 2900$ savings first year then increase by 200$ annually, if the rate…

A: Annual worth is the value of benefits and costs that would be incurred over a specific time period…

Q: What is the future value of a $1,200 investment, earning 10-percent interest per period, after two…

A: In the given question we require to compute the future value. Other details are : Present value of…

Q: How much is the present value of your investment if you invest P2,000 semi-annually at the start of…

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

Q: Your company will generate $74,000 m annual reevenue cach year for the next seven years from a new…

Q: If you invest $2,000 per year for 9 years and earn a 5% return on your investment during that…

A: The future value is the amount that will be received at the end of a certain period. In simple…

Q: What will be the maturity value of P12,000 invested for four (4) years at 15% compounded quarterly?…

A: Invested amount (X) = P 12000 n = 4 years = 16 quarters r = 15% per annum = 3.75% per quarter

Q: How long RM152,091.826 grow to RM708,900 with a 8% compounded annually? Select one: a. 15 years…

A: Using the Nper function

Q: 1) A company is expected to result 2900$ savings first year then increase by 200$ annually, if the…

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

Q: Mr Cruz invest 50,000 now and yields P14,025.50 at the end of 5th year, P34,363.72 at the end of the…

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

Q: Suppose that you have the opportunity to receive $24,000 per year for the next 6 years. Over this…

A: Present value amount refers to the values of money in current period for all future expected cash…

Q: Ineed to answerthese questionscan you help me out, Questions 4,5 4- What is the current value ofthe…

Question

a) How much should you invest at 12% interest today if you want to receive TK.
10,000 at the cnd of 3rd year; TK. 20,000 at the end of Sth year; and TK. 25,000 at
the end of 7th year if interest is compounded continuously?
b) A company is thinking of acquiring fixed assets worth TK. 10 million on
financial lease for five ycars at an interest rate of 12%. The lcase would be
amortized over five years by equal annual installments. You are required to
calculate annual installment and show how lease is amortized over five years if
installment is paid at year cnd or at the beginning of the year.

Expert Solution

This question has been solved!

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

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step 3

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Similar questions

(1) Assume that the lease payments were actually 280,000 per year, that Consolidated Leasing is also in the 25% tax bracket, and that it also forecasts a 200,000 residual value. Also, to furnish the maintenance support, it would have to purchase a maintenance contract from the manufacturer at the same 20,000 annual cost, again paid in advance. Consolidated Leasing can obtain an expected 10% pre-tax return on investments of similar risk. What are its NPV and IRR of leasing under these conditions? (2) What do you think the lessors NPV would be if the lease payment were set at 260,000 per year? (Hint: The lessors cash flows would be a mirror image of the lessees cash flows.)
Lease versus Buy Consider the data in Problem 19-1. Assume that RCs tax rate is 40% and that the equipments depreciation would be 100 per year. If the company leased the asset on a 2-year lease, the payment would be 110 at the beginning of each year. If RC borrowed and bought, the bank would charge 10% interest on the loan. In either case, the equipment is worth nothing after 2 years and will be discarded. Should RC lease or buy the equipment?
Jullo Company is considering the purchase of a new bubble packaging machine. If the machine will provide $20,000 annual savings for 10 years and can be sold for $50,000 at the end of the period, what is the present value of the machine investment at a 9% interest rate with savings realized at year end?
Redbird Company is considering a project with an initial investment of $265,000 in new equipment that will yield annual net cash flows of $45,800 each year over its seven-year life. The companys minimum required rate of return is 8%. What is the internal rate of return? Should Redbird accept the project based on IRR?
(a)An investment is offered whereby £1000 is invested immediately, £2000 is invested in exactly threeyears’ time followed by a further investment of £3000 after a further threeyears. The investment is due to return £10000 in ten years’ from now. (i)Write down the equation of valuefor the investment (ii) Estimatethe yield on the investment. (b) (i)Calculate the present value, at a rate of interest of 6.5% per annum effective, of anannuity where £5000 is paidat the end of the first year, £4,800 is paid at the end ofthe second year, £4,600 is paid at the end of the third year and so on, with paymentsdecreasing by £200 per annum until the payment stream ends afterof 10 years. (ii)What would the payments be for an investment with the same present value, with equal payments every month?
A firm, whose cost of capital is 8 percent, may acquire equipment for $146,825 and rent it to someone for a period of five years. Note: Although payment of rent is typically considered to be an annuity due, treat it as an ordinary annuity when completing this problem in a spreadsheet or when using present value factors. If the firm charges $38,730 annually to rent the equipment, what are the net present value and the internal rate of return on the investment? Use Appendix D to answer the questions. Use a minus sign to enter negative values, if any. Round your answers for the net present value to the nearest dollar and for the internal rate of return to the nearest whole number. NPV: $ IRR: % Should the firm acquire the equipment? The firm acquire the equipment as the net present value is , and the internal rate of return the firm's cost of capital. If the equipment has no estimated residual value, what must be the minimum annual rental charge for the firm to earn the required 8…
You are promised an 8 year streams of income from buying a new technology at the initial amount of P 40,000.00. If the income increases by 3%, 4%, 5% and 6% respectively from the 2nd to 5th year then return to initial amount from the 6th to the 8th year, what is the present value of stream of income if the current interest prevailing is 6.5%?
Suppose we have an asset currently worth $ 2,000. The current continuously compounded rate is 4% for all maturities. Compute the price of 6 – month forward contract on this asset
A. Assume that you have $7500 to invest. You plan to invest it for 10 years at a rate of 7% per year, compounded semiannually. What is the future value (FV) of this investment? B. Assume that you need to accumulate $25,000 by the end of 17 years. You can invest today at a rate of 12% per year, compounded quarterly. At that rate, how much must you invest today (PV) to accumu-late the $25,000? C. Assume that you have $5000 to invest today. At the end of 7 years, you need that $5000 to have grown to $10,000. If you invest at semiannual compounding, what annual rate must
Assume $100,000 is available for investment and MARR =10% per year. If alternative A would earn 25% per year on inveatment of 60,000 and B would be earn 20% per year on investment of 75000 the weighted average(ROR) of A
Assume that JL Corporation would like to know the amount of investment it will make in order to yield an amount of P500,000 which it will receive three years from now. Assume that the rate for this type of investment is 10%.
i) Reno Ltd invests £150,000 at 2.5% compound interest for three years. What will be thevalue of the investment after three years?