Answered: dient series cash flow having ₱3000 on…

dient series cash flow having ₱3000 on year 3, ₱4000 on year 4, ₱5000 on year 5 and ₱6000 on year 6. Compute the present value on year

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter19: Capital Investment

Section: Chapter Questions

Problem 23E: Assume that an investment of 100,000 produces a net cash flow of 60,000 per year for two years. The...

See similar textbooks

Related questions

Q: Problem: Find the nominal rate, which if converted quarterly could be used instead of 15 %…

A: The nominal interest rate is the rate of interest prior inflation is taken into account. The…

Q: Atlantis Fisheries issues zero coupon bonds on the market at a price of $537 per bond. Each bond has…

A: Yield to Maturity for zero coupon Bonds =(Face value)/Present value)1/n- 1)

Q: The L-S Mining Company is planning to open a new strip mine in western Pennsylvania. The net…

A: NPV NPV is a capital budgeting tool to decide on whether the given capital project should be…

Q: 1. What is the value of ROR (i*) for the following equation? O= -20,000 + (29,000 - 21,000) (P/A,…

A: The rate which makes the total discounted worth of cash flows equal to zero is called IRR or…

Q: A concrete pavement on a street would cost P2M and would last for 5 years. Minor maintenance cost is…

Q: What is TRUE about the Future Value general growth: I. For a given interest rate: the longer the…

A: The present value (PV) and future value (FV) of money indicate how much its worth has shifted over…

Q: The least risky capital market security is a.preferred stock. b.common stock. c.corporate bonds.…

A: The primary purpose of capital markets is to offer financial products like stocks and bonds. Stocks…

Q: G. R. Edwin Inc. had sales of $5.88 million during the past year. The cost of goods sold amounted to…

A: Tax liability is the amount of tax that a firm/individual needs to pay to the Government on its…

Q: 3.Using Table 11-1, calculate the compound amount and compound interest (in $) for the investment.…

A: Principal (P) = 5500 Period = 4 Years Quarterly periods (n) = 4*4 = 16 Interest rate = 8% Quarterly…

Q: The operating and maintenance expense on a scientific lab are expected to increase 3% per month.…

A: Growth rate =3% Interest rate =12% Time Period = 4 Years Monthly Expenses = $1,500

Q: Please solve without using Excel and show work... An assembly machine to reduce labor costs $65,000…

A: The cost of operating equipment or machinery is known as operating cost. The operating cost is…

Q: 2.Find the total number of compounding periods and the interest rate per period for the investment.…

A: Term of investment = 7 years Nominal rate (Annual) = 2.5% Interest is compounded semi annually,…

Q: A company recently paid a dividend, D0, of $1.25. It expects to have nonconstant growth of 13% for 2…

A: We can use the dividend discount model here to determine the stock's fair value. As per the dividend…

Q: Student B placed his allowance amounting to P 5000 in a savings account with a nominal interest rate…

A: Amount placed (A) = P 5000 r = 5% per annum = 5%/12 per month = 0.4167% per month n = 5 years = 60…

Q: A firm wishes to bid on a contract that is expected to yield the following after-tax net cash flows…

A: Present worth (NPV) will be the difference between total present worth of cash inflows and total…

Q: QUESTION 9 Suppose that the forward rate today for the period between 1 year and 2 years in the…

A: “Since you have asked multiple questions, we will solve the first question for you. If you want…

Q: Q7-3. If interest is compounded more than once a year, will the effective interest rate be higher…

A: Nominal interest rate is the stated interest rate, where as effective interest rate is the rate…

Q: Cross-Ocean Boats Ltd. is in the 30% tax bracket. It is interested in determining the minimum…

A: Present Value of bond is not given, so considering 1000 as face value of bond. So, Present Value…

Q: Abby also has a $400/month car loan payment and a $150/month student loan payment. If her lender…

A: Annual gross income can be found by multiplying the value of the total monthly payment by the debt…

Q: A flat screen TV has a purchase price of P 38,000. Mr. Cruz purchase it through monthly installment…

A: Formula PV = P+P*(1-(1+i)-(n-1))/i Where PV - Purchase price i.e. P 38000 P - Monthly payment i -…

Q: How much less is a perpetuity of $2,000 worth than an annuity due of the same amount for 30 payments…

A: An annuity is a series of monetary payments. A perpetuity is a sort of annuity that lasts…

Q: Tricana Corporation borrowed $79,000.00 at 3% compounded quarterly for 8 years to buy a warehouse.…

A: The loan here is an amortized loan. An amortized loan is that loan in which interest is charged on…

Q: net investment

A: Cash flow represents the inflow and outflow of cash in a particular period of time for the company.

Q: The cc risk free rate r = -0.15% (yes, r< 0). The spot price for TFS is So = 42.50, the cc dividend…

A: The replicating portfolio is a method of finding the value of an option by considering the…

Q: 16. Tauriel deposited a certain amount on a savings account that earns compound interest on the last…

A: Interest compounded over a long enough period of time can contribute significantly to an emergency…

Q: You are required to: 1. Compute the cost of equity for this project 2. Compute the relevant cost of…

A: Weighted average cost of capital (WACC) refers to the combined cost of company's capital from all…

Q: When you have a fixed investment horizon, it is important to maximize your earnings. You must…

A: Reinvestment risk refers to the possibility that an investor will not be able to reinvest the cash…

Q: QUESTION 7 A corporation decides to deposit a fixed payment per quarter into an account earning 8%…

A: Compound interest is the interest that is charged on the principal amount as well as interest…

Q: no preferred stock. The yield to at the company's WACCs 12.60% What is Pearson's cost of common…

A: Weighted average cost of capital is the cost o capital considering the weight of the different…

Q: Mohammed needs money in order to buy a latest Villa. The cost of building the Villa is BHD 75,000.…

A: Selling price is the price that a customer pays to purchase a product or a commodity, the price for…

Q: An investment of P8.5 M is expected to yield an annual income of P2.8 M. Determine the payout period…

A: Payback period is the time taken by the investment to recover the cost of the investment. The…

Q: The Gilbert Instrument Corporation is considering replacing the wood steamer it currently uses to…

A: Net present value is the difference between the present value of cash inflows and present value of…

Q: Student A wishes to invest in cryptocurrency, how long will it take to double his investment when he…

A: Future Value refers to the value of the current asset or investment or of cash flows at a specified…

Q: 1.Find the total number of compounding periods and the interest rate per period for the investment.…

A: Period = 7 Years Interest rate = 3% Number of compounding per year = 12

Q: solve this cash flow

A: Cash flow refers to the balance of the cash inflows and outflows of a business over a period of…

Q: Intro Find the present values of these annuities due. Part 1 What is the present value of $6,000 per…

A: 1) Quarterly payment (Q) = $6000 r = 6% per annum = 1.5% quarterly n = 8 years = 32 quarters

Q: Apply incremental B/C analysis at an interest rate of 8% per year to determine which alternative…

A: The relation between the cost of the project and the benefits from the project is known as…

Q: Q7-1. What is interest? Explain.

A: Interest is a monetary fee paid for the privilege of borrowing money, and it is usually expressed as…

Q: If an investor buys shares in a no-load mutual fund for $33 and after eight years the shares…

A: Mutual funds refer to one type of financial vehicle that pools money from many investors and invests…

Q: Question 20 An analyst estimates that project C's expected rate of returm is 10%, your required rate…

A: To analyse a project, the expected rate of return and required rate of return are compared. if the…

Q: 23. Calculate the present value (principal) and the compound interest (in $). Use Table 11-2. Round…

A: The present value and compound interest can be calculated as per the principles of time value of…

Q: A 5-year project will require an investment of $100 million. This comprises plant and machinery…

A: Working Note #1 Calculation of depreciation: Year 1 2 3 4 5 Opening Balance ($) 80000000…

Q: 8. Nichols Inc. is considering a project that has the following cash flow data. What is the…

A: The internal rate of return (IRR) is a financial metric that is used to evaluate the profitability…

Q: A corporation decides to deposit fixed payment per account earning 9% interest per year in order to…

A: Amount needed at the end of year 9 235000 Period 9 years No of period (Quarterly) 36 Rate of…

Q: Q7-6. Is it possible to convert the future value of an ordinary annuity table to the future value of…

A: Answer:- Yes EXPLANATION:- An annuity refers to a stream of equal cash flows that occur at regular…

Q: 20.Calculate the present value (principal) and the compound interest (in $). Use Table 11-2. Round…

A: The present value and interest figure can be calculated as per principle of time value of money

Q: 2. You invested $39,000 in Yug Industries at an annual interest rate of 5% compounded continuously.…

A: Formula Future value = PV*ert Where PV - Investment amount i.e. $39000 e - Euler's number i.e.…

Q: Assess One of the companies is a project to build housing units with an estimated investment volume…

A: Payback period is the period in which a project paybacks its initial investment from the expected…

Q: #1 Matthew makes a series of payments at the beginning of each year for 20 years. The first payment…

A: Present value of a future amount With interest rate (i), period (t) and future value (FV), the…

Q: he Everly Equipment Company's flange-lipping machine was purchased 5 years ago for $55,000. It had…

A: Machine purchased 5 years ago = $55,000 Expected life = 10 years Depreciation on machine = $5,500…

Concept explainers

Production Budget

A budget can be defined as a financial plan designed by an undertaking for a definite period in the future that can contribute towards enhancing the financial success of the business undertaking. It is used to estimate the revenue and expenses. The budget generally takes into account both current and future income and expenses.

Question

Consider an arithmetic gradient series cash flow having ₱3000 on year 3, ₱4000 on year 4, ₱5000 on year 5 and ₱6000 on year 6. Compute the present value on year 0, based on interest rate of 4%.

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

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

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

Similar questions

Project Y cost $8,000 and will generate net cash inflows of $1,500 in year one, $2,000 in year two, $2,500 in year three, $3,000 in year four and $2,000 in year five. What is the NPV using 8% as the discount rate?
Project B cost $5,000 and will generate after-tax net cash inflows of $500 in year one, $1,200 in year two, $2,000 in year three. $2,500 in year four, and $2,000 in year five. What is the NPV using 8% as the discount rate? For further instructions on net present value in Excel, see Appendix C.
Consider the following cash flow profile: Suppose the positive-valued cash flows are now replaced by a geometric series. If the cash flow at end of year 1 is $10,000, what geometric rate is required for the cash flow profiles to be equivalent? Interest is at a compounded annual rate of 6%.
An arithmetic cash flow gradient series equals $600 in year 1, $700 in year 2, and amounts increasing by $100 per year through year 10. At i = 9% per year, determine the present worth of the cash flow series in year 0. The present worth of the cash flow series in year 0 is $
An arithmetic cash flow gradient series equals $500 in year 1, $600 in year 2, and amounts increasing by $100 per year through year 9. At i = 10% per year, determine the present worth of the cash flow series in year 0.
Consider a loan of $10,000 and the following pattern of cash flows. a. What is the interest rate that makes the present worth equal to $0.00? b. Using the interest rate determined in part (a), and leaving the −$10,000 at year 0 in place, determine the equal annual incomes that are equivalent to the gradient series in years 1, 2, 3, and 4?
An arithmetic cash flow gradient series equals $600 in year 1, $800 in year 2, and amounts increasing by $200 per year through year 5. At i = 6% per year, determine the factor from the compound interest factor table that is used to calculate the equivalent annual worth of the revenue through year 5. Multiple choice question. A. 4.212 B. 5.637 C. 1.884 D. 7.934
For the cash flows shown, determine: (a) the number of possible i* values (b) the i* value displayed by the IRR function (c) the external rate of return using the MIRR method if ii = 18% per year and ib = 10% per year. Year 0 1 2 3 4 Revenues, $ 0 25,000 19,000 4000 18,000 Costs, $ −6000 −30,000 −7000 −6000 −12,000
For the cash flows shown, find the value of x that makes the equivalent annual worth in years 1 through 7 equal to $300 per year. Use an interest rate of 10% per year. Year Cash Flow, $ Year Cash Flow, $ 0 x 4 300 1 300 5 300 2 300 6 300 3 300 7 x
A cash flow series is described by the following: $10,000 + $250(t), where t is the number of compounding periods. The present worth of this series at the end of five periods, where interest is 2% per t, is nearest what value? (a) $11,250 (b) $50,620 (c) $56,432 (d) $60,620?
In the accompanying diagram, what is the value of K on the left-hand cash-flow diagram that is equivalent to the right-hand cash-flow diagram? Let i = 10% per year. Show clear calculations.
The following cash flow diagram represents an investment of Php 400 and revenue of x at the end of years one and two. Given a discount rate of 15% compounded annually, what must “x” approximately be for this set of cash flows to have a net present worth of zero?