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- After seeing its neighboring village obtain a new water tower, the city board of East Dubuque begins planning to replace its water towers. The board estimates that it will need $1,750,000 to build the new water towers in 20 years. At this time, the city board plans to assess its 2753 homeowners with a one-time flat fee surcharge and the n invest the money received in a CD paying 9% interest compounded daily(use n=360) for 20 years. a.) How much money will the board need to raise at this time to meet the city’s water tower needs at the end of 20 years? b.) Before applying the surcharge, the city board receives a federal grant of $100,000 toward the water tower investment. Taking this grant into account, how much should the surcharge be on each homeowner?On January 2, 2011, Blink Corporation was granted 5,000 acres of land in a village, located near the slums outside city limits, by a local government authority. The condition attached to this grant was that Blink Corporation should clean up this land and lay roads by employing laborers from the village in which the land is located. The government has fix the minimum wage payable to the workers. The entire operation will take three years and is estimated to cost P100,000,000. This amount will be spent in this way, P20,000,000 each in the first, P30,000,000 in the second years and P50,000,000 in the third year. The fair value of the land is currently P120,000,000. What portion of the grant is recognized for the year ended December 31, 2012?On January 1, 2020, Optimistic Company was granted by a local government authority 5,000 hectares of land located near the slums outside the city limits. The condition attached to this grant was that the entity shall clean up this land and lay roads by employing laborers from the village where the land is located. The government has fixed the minimum wage payable to the workers. The entire operation will take 3 years and is estimated to cost P10,000,000. This amount will be spent P2,000,000 for 2020, P2,000,000 for 2021 and P6,000,000 for 2022. The fair value of this land is P12,000,000. Prepare the journal entry for 2020 in connection with this grant
- A manufacturing company has determined that it will need $600,000 in 6 years for a new roof on its southeastern regional warehouse. A sinking fund is established for the roof at 3.6% compounded semiannually. What equal payments (in $) are required every 6 months to accumulate the needed funds for the roof? (Round your answer to the nearest cent.)Pet Aware is an animal shelter and receives an upfront, unsolicited 2-year grant of $800,000 from Kindig Company (the owner of Kindig is a dog lover). The grant specifies that the money should be used to expand Pet Aware’s operations. The agreement indicates that Pet Aware must expand its operations by 6,000 square feet to accommodate additional animals by the end of 2 years. The grant contains a right of return for any unused assets. Explain whether this grant is an unconditional or conditional grant.The council members of a small town have decided that the earth levee that protects the town from flooding should be rebuilt and strengthened. The town engineer estimates that the cost of the work at the end of the first year will be $68,000. He estimates that in subsequent years the annual repair costs will decline by $7000, making the second-year cost $61,000; the third-year $54,000, and so forth. The council members want to know what the equivalent present cost is for the first 5 years of repair work if interest is 6%.
- Under a government environment incentive plan companies installing air-pollution control equipment are entitled to a 50% grant to offset the purchase and maintenance costs. Company ABC decides to avail of this incentive by acquiring equipment costing Php 500,000. The maintenance costs are estimated to be Php 40,000 in the first year, rising annually by Php 3,000. If the equipment’s useful life is 10 years, and annual interest rate is 6% compounded half-yearly, how much will the grant be? 18. Under a government environment incentive plan companies installing air-pollution control equipment are entitled to a 50% grant to offset the purchase and maintenance costs. Company ABC decides to avail of this incentive by acquiring equipment costing Php 500,000. The maintenance costs are estimated to be Php 40,000 in the first year, rising annually by Php 3,000. If the equipment’s useful life is 10 years, and annual interest rate is 6% compounded half-yearly, how much will the grant be?A town in Wyoming wants to drill a geothermal well to provide district heating steam and hot water for its businesses and residences. Aftergovernment subsidies, the capital investment for the well is $500,000, and the geothermal well will reduce natural gas consumption for steam and hot water production by $50,000 per year. The salvage value of the well is negligible. The simple payback period for this well is 10 years. If the MARR of the town is 8% per year and the life of the geothermal well is 25 years, what is the IRR for this project? Choose the closest answer below. (a) 6.2% (b) 9.1% (c) 8.8% (d) 10.3%.A college plans to build a new dormitory building. A group of alumni volunteered to donate enough funds to cover all the maintenance cost of the dormitory. As an analyst working for the college, you are asked to determine the amount of the donation. You are told that the maintenance cost of the dormitory will be $35,000 per year for the first 20 years. Then it will increase to $45,000 per year for years 21 through 30, and to $60,000 per year after that. The dormitory is assumed to have an indenite service life. The college will place the funds on an account that will pay 12% interest compounded annually. How large should the donation be? A) $500,000 B) $304,478 C) $347,231 D) Answers A, B and C are not correct
- Solve by using the sinking fund or amortization formula. A manufacturing company has determined that it will need $400,000 in 6 years for a new roof on its southeastern regional warehouse. A sinking fund is established for the roof at 3.8% compounded semiannually. What equal payments (in $) are required every 6 months to accumulate the needed funds for the roof? (Round your answer to the nearest cent.) $Mr. Charles owns a private garbage dump. He has been asked that to avoid leaks that contaminate the groundwater, he must install a plastic protector. The landfill area is 7 km2 and the cost of handling the vapors is $ 1,000 per km2 and is paid for all land use. The installation cost of the protector is known to be $ 2,000,000. To recoup the investment in 5 years, Mr. Charles charged $ 50 for the delivery truck loads, $ 100 for the dump truck loads, and $ 200 for the compactor truck loads. It is also known that the monthly distribution has been estimated at 1,000 delivery truck loads, 200 dump truck loads and 500 compactor truck loads. a) What internal rate of return did Mr. Charles obtain on his investment? to. Effective monthly and Effective annually b) If the minimum attractive rate of return is 8% annual compound monthly cash for Mr. Charles's businesses, what can you recommend in this regard, support your answers?The local botanical society wants to ensure that the gardens in the town park are properly cared for. The group recently spent $100,000 to plant the gardens. The members want to set up a perpetual fund to provide $100,000 for future replantings every 10 years. (a) If interest is 5%, how much money is needed for the fund? (b) If the last replanting is in year 100, how much is needed for the fund?
