If a car depreciates exponentially at a rate of 8.7% per year, what was the original price if 5 years later the value is $12,250? A. $21,315.00 B. $26,643.75 C. $19,310.00 D. $14,080.46
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15. If a car
original price if 5 years later the value is $12,250?
A. $21,315.00
B. $26,643.75
C. $19,310.00
D. $14,080.46
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Solved in 2 steps
- You bought a car 5 years ago for $30,000. This type of car is known to depreciate at a compounded annual rate of 8% per year (given normal mileage and wear-and-tear). If your car depreciated at this rate, how much is it worth today? (Hint: let r = -0.08 and solve for FV).9. A mini-mart needs a new freezer and the initial investment will cost $461,558. Incremental revenues, including cost savings, are $128,876, and incremental expenses, including depreciation, are $39,076. There is no salvage value. What is the accounting rate of return (ARR)? Round the nearest whole percent, no decimal places. 10. You put $250 in the bank for 5 years at 12%. If interest is added at the end of the year, complete the chart and input the balances at the end of each year. Round to the nearest penny, two places. Data table Year Money in the Bank 1 $ 2 3 4 5A car depreciates exponentially at a rate of 5% per year. If the car is worth $30,000 after 9 months, what was the original price of the car?
- 24. Steven found that the value of his new car is currently $31,200 and willdepreciate 6.9% per year. Based on the rate of depreciation, find the value ofhis car in 5 years. A. $21,822.42B. $20,436.00C. $6,240.00D. $15,600.00You are looking at an investment which has an initial cost of $400,000 and a salvage value of zero after five years. What is the average accounting return for this investment given the following annual net incomes: year 1 $100,000, year 2 150,000, year 3 150,000, year 4 100,000 and year 5 50,000. a. 27.5%b. 52.5%c. 55.0%d. 137.5%8 A. A mini-mart needs a new freezer and the initial investment will cost $300,000. Incremental revenues, including cost savings, are $200,000, and incremental expenses, including depreciation, are $125,000. There is no salvage value. What is the accounting rate of return (ARR)? Round the nearest whole percent, no decimal places.
- The value of an automobile depreciates at the rate of 15% per year. What will be the value of an automobile 3 years hence which is now purchased for P45,000? Complete and clear solution must be shown.13- Evaluate the following statements about NPV and IRR. I. Majed said, “NPV increases as discount rate decreases”. II. Nesrin said, “IRR increases as discount rate decreases”17- CBA Elevator costs $50,000 with an expected life of 5 years.The elevator will be depreciated on a straight-line basis to an expected salvage value of zero. The annual operating costs are $8,000.Applicable tax rate is 30% and required rate of return is 10.0%. What is the net present value of the elevator?6. A company will invest $37,072 on a capital expenditure (an asset with multi-year use). They estimate it will save $25,166 per year for the next 2 years. If their TVOM is 5.89%, what is the worth of the investment per year? (be sure to include the sign)
- 6. A report from the marketing department indicates that a new product will generate the following revenue stream: P62,500 in the first year, P89,400 in year two, P136,200 in year three, P128,300 in year four, and P112,000 in year five. If your firm's discount rate is 11% and the cash flows are received at the end of each year, what is the present value of this cash flow stream? a.P379,435.35b.P421,173.24c.P476,036.04d.P528,400.00Assuming a cost of capital of 5% and that $60,000 is the correct profit estimate each year for the next 10 years, what is the IRR if NPV=463,304 a. 32.0% b. 8.1% c. 21.0% d. 2.8%The following present value factors are provided for use in this problem. Periods Present Valueof $1 at 11% Present Value of anAnnuity of $1 at 11% 1 0.9009 0.9009 2 0.8116 1.7125 3 0.7312 2.4437 4 0.6587 3.1024 Cliff Co. wants to purchase a machine for $62,000, but needs to earn a return of 11%. The expected year-end net cash flows are $24,000 in each of the first three years, and $28,000 in the fourth year. What is the machine's net present value? Multiple Choice $(3,351). $15,093. $77,093. $(43,556). $100,000.