Ahmad needs $7000 for a future project. He can invest $5000 now at an annual rate of 13.5%, compounded quarterly. Assuming that no withdrawals are made, how long will it take for him to have enough money for his project? Do not round any intermediate computations, and round your answer to the nearest hundredth. If necessary, refer to the list of financial formulas. years S ?

Ahmad needs $7000 for a future project. He can invest $5000 now at an annual rate of 13.5%, compounded quarterly. Assuming that no withdrawals are made, how long will it take for him to have enough money for his project? Do not round any intermediate computations, and round your answer to the nearest hundredth. If necessary, refer to the list of financial formulas. years S ?

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter26: Capital Investment Analysis

Section: Chapter Questions

Problem 2CMA: Staten Corporation is considering two mutually exclusive projects. Both require an initial outlay of...

See similar textbooks

Similar questions

Jasmine Manufacturing is considering a project that will require an initial investment of $52,000 and is expected to generate future cash flows of $10,000 for years 1 through 3, $8,000 for years 4 and 5, and $2,000 for years 6 through 10. What is the payback period for this project?
Bouvier Restaurant is considering an investment in a grill that costs $140,000, and will produce annual net cash flows of $21,950 for 8 years. The required rate of return is 6%. Compute the net present value of this investment to determine whether Bouvier should invest in the grill.
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?
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?
Staten Corporation is considering two mutually exclusive projects. Both require an initial outlay of 150,000 and will operate for five years. The cash flows associated with these projects are as follows: Statens required rate of return is 10%. Using the net present value method and the present value table provided in Appendix A, which of the following actions would you recommend to Staten? a. Accept Project X and reject Project Y. b. Accept Project Y and reject Project X. c. Accept Projects X and Y. d. Reject Projects X and Y.
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?
If you invest $15,000 today, how much will you have in each of the following instances? Use Appendix A as an approximate answer, but calculate your final answer using the formula and financial calculator methods. a. In 6 years at 8 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) b. In 17 years at 9 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) c. In 15 years at 8 percent? (Do not round intermediate calculations. Round your final answer to 2 decimal places.) d. In 14 years at 8 percent (compounded semiannually)? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
Park Co. is considering an investment that requires immediate payment of $27,000 and provides expected cash inflows of $9,000 annually for four years. If Park Co. requires a 10% return on its investments, what is the net present value of this investment? (Round your calculations to the nearest dollar.)
A new computer system will require an initial outlay of $19,000, but it will increase the firm’s cash flows by $3,800 a year for each of the next 8 years. How high can the discount rate be before you would reject the project? Note: Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places
Beene Distributing is considering a project that will return $150,000 annually at the end of each year for the next six years. If Beene demands an annual return of 7% and pays for the project immediately, how much is it willing to pay for the project?
You need to accumulate $10,000. To do so, you plan to make deposits of $1,050 per year - with the first payment being made a year from today - into a bank account that pays 13% annual interest. Your last deposit will be less than $1,050 if less is needed to round out to $10,000. How many years will it take you to reach your $10,000 goal? Do not round intermediate calculations. Round your answer up to the nearest whole number. year(s) How large will the last deposit be? Do not round intermediate calculations. Round your answer to the nearest cent.
Kerr Kompany is considering investing in a project that costs $50,000 and is expected to generate cash inflows of $20,450 at the end of each year for three years. The company requires a 11% rate of return on all new investments. Present Value of an Annuity of 1 Periods 9% 10% 11% 12% 3 2.531 2.489 2.444 2.402 4 3.239 3.170 3.102 3.037 The profitability index for this project is: A. 1.00. B. 0.80. C. 1.24. D. 1.27.