An Engineering Research foundation wishesto set up a trust fund earning 10%compounded annually to• provide P 2,585,373 for the lot andbuilding and P 1,110,477 for the initialequipment of a Structural Engineering andMaterials Laboratory;• pay P 445,919 for the annual operatingcost every year; and• pay P 503,831 for the purchase of newequipment and replacement of someequipment every 6 years beginning 6 yearsfrom now.How much money should be paid into thefund for the building and equipment and topay for perpetual operation and equipmentreplacement?

The PV analysis is used to measure the profitability of a project by discounting its future cash…

Answered: An Engineering Research foundation…

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter19: Lease And Intermediate-term Financing

Section: Chapter Questions

Problem 8P

See similar textbooks

Similar questions

An Engineering Research foundation wishes to set up a trust fund earning 10% compounded annually to provide P 2,613,522 for the lot and building and P 1,443,776 for the initial equipment of a Structural Engineering and Materials Laboratory; pay P 405,996 for the annual operating cost every year; and pay P 528,758 for the purchase of new equipment and replacement of some equipment every 7 years beginning 7 years from now. How much money should be paid into the fund for the building and equipment and to pay for perpetual operation and equipment replacement?
Starr Company decides to establish a fund that it will use 10 years from now to replace an aging production facility. The company will make a $100,000 initial contribution to the fund and plans to make quarterly contributions of $50,000 beginning in three months. The fund earns 12%, compounded quarterly. What will be the value of the fund 10 years from now?
Starr Company decides to establish a fund that it will use 4 years from now to replace an aging production facility. The company will make a $109,000 initial contribution to the fund and plans to make quarterly contributions of $50,000 beginning in three months. The fund earns 12%, compounded quarterly. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round your "Table Factor" to 4 decimal places and final answers to the nearest whole dollar.)What will be the value of the fund 4 years from now? Table Values are Based on: n = i = Present Value Table Factor Future Value Initial Investment Periodic Investments Future Value of Fund
Tyu plans to construct an adiitional building at the end of 10 years at an estimated cost of P5,000,000. To accumulate this amount, it will deposit equal year-end amounts in a fund earning 13%. However, at the end of the fifth year, it decided to have a larger building estimated to cost P8,000,000. What is the equal year-end payments made for the first five years?
Abc plans to construct an adiitional building at the end of 10 years at an estimated cost of P5,000,000. To accumulate this amount, it will deposit equal year-end amounts in a fund earning 13%. However, at the end of the fifth year, it decided to have a larger building estimated to cost P8,000,000. What is should be the annual deposit for the last five years?
A firm wants to sponsor a new engineering lab at a local university. This requires $4M to construct the lab, $1.5M to equip it, and $750,000 every 6 years for new equipment. What is the required endowment if the university will earn 8% interest on the funds? Answer: $6,777,957
(1) Five years ago, an alumnus of a university donated $55,996.8 to establish a permanent endowment for scholarships. The first scholarships were awarded 1 year after the contribution. If the amount awarded each year, that is, the interest on the endowment, is $4,017.55, the rate of return earned on the fund is closest to: (2) For the nonconventional net cash flow series shown, the external rate of return per year using the MIRR method, with an investment rate of 20% per year and a borrowing rate of 8% per year, is closest to: Year 0 1 2 3 4 NCF, $ −40,000 +16,767 −29,000 +25,000 +53,519 According to Descartes’ rule of signs, the possible number of rate of return values for the net cash flow series ++++−−−−−−+−+−−−++ is: 6 7 4 8
Prestige Properties plans to raise $225,000 over a 10-year period so they can purchase a parcel of land. In order to obtain this amount, the company has decided to make semiannual investments into a sinking fund that will earn 8% per year compounded semiannually for the next 10 years. Using the sinking fund table, calculate the amount of each semiannual sinking fund payment required to raise $225,000 in 10 years.
Arlex Oil Corporation plans to build a new garage in 6 years. To finance the project, the financial manager established a $250,000 sinking fund at 6% compounded semiannually. Find the semiannual payment required for the fund. A. $
The management of a condominium association anticipates a capital expenditure of $150,000 in 3 years for the purpose of painting the exterior of the condominium. To pay for this maintenance, a sinking fund will be set up that will earn interest at the rate of 5.6%/year compounded monthly. Determine the amount of each (equal) monthly installment the association will be required to deposit into the fund at the end of each month for the next 3 years. (Round your answer to the nearest cent.)
Determine the amount needed now to purchase a machine for P100,000, provide an annual fund of P15,000 for operation and maintenance, and to replace it at the same cost at the end of every ten-year period. Money is worth 7.5% compounded annually.
The management of Quest Media Inc. is considering two capital investment projects. The estimated net cash flows from each project are as follows: Year Radio Station TV Station 1 $420,000 $880,000 2 420,000 880,000 3 420,000 880,000 4 420,000 880,000 Present Value of an Annuity of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 1.833 1.736 1.690 1.626 1.528 3 2.673 2.487 2.402 2.283 2.106 4 3.465 3.170 3.037 2.855 2.589 5 4.212 3.791 3.605 3.352 2.991 6 4.917 4.355 4.111 3.784 3.326 7 5.582 4.868 4.564 4.160 3.605 8 6.210 5.335 4.968 4.487 3.837 9 6.802 5.759 5.328 4.772 4.031 10 7.360 6.145 5.650 5.019 4.192 The radio station requires an investment of $1,087,380, while the TV station requires an investment of $2,512,400. No residual value is expected from either project. Required: 1a. Compute the net present value for each project. Use a rate of 10% and the present value of an annuity of $1…

SEE MORE QUESTIONS

Recommended textbooks for you

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Century 21 Accounting Multicolumn Journal

Accounting

ISBN:

9781337679503

Author:

Gilbertson

Publisher:

Cengage

Century 21 Accounting General Journal

Accounting

ISBN:

9781337680059

Author:

Gilbertson

Publisher:

Cengage

EBK CONTEMPORARY FINANCIAL MANAGEMENT

Finance

ISBN:

9781337514835

Author:

MOYER

Publisher:

CENGAGE LEARNING - CONSIGNMENT

Century 21 Accounting Multicolumn Journal

Accounting

ISBN:

9781337679503

Author:

Gilbertson

Publisher:

Cengage

Century 21 Accounting General Journal

Accounting

ISBN:

9781337680059

Author:

Gilbertson

Publisher:

Cengage

Financial Accounting Intro Concepts Meth/Uses

Finance

ISBN:

9781285595047

Author:

Weil

Publisher:

Cengage

SEE MORE TEXTBOOKS