Invest $28,000; Compounded quarterly; 30 years; Annual Interest Rate of 3.5%; Find the Future Value. Variable Value N = I% = PV = PMT= FV = P/Y = C/Y = What is the Missing Variable Unit? Write a Context Sentence:

PV= $28,000 Compounding Frequency= compounded quarterly Time period (n)= 30 years= 30*4= 120 Annual…

Answered: Invest $28,000; Compounded quarterly;…

Business

Finance

Invest $28,000; Compounded quarterly; 30 years; Annual Interest Rate of 3.5%; Find the Future Value.

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 9EB: If you invest $15,000 today, how much will you have in (for further instructions on future value in...

See similar textbooks

Related questions

Q: (Payback period, net present value, profitability index, and internal rate of return calculations)…

A: Capital budgeting techniques are the methods that are being adopted by a company to evaluate various…

Q: An initial investment amount P, an annual interest rate r, and a time t are given. Find the future…

A: Future value is the compounded value of an initial sum of money. It includes the initial amount as…

Q: A certain investment will require an immediate cash outflow of $4m. At the end of each ofthe next 4…

A: PART A & B:Calculation of Net Present Value:The real interest rate of 5% in Part B is calculated…

Q: Calculate, to the nearest cent, the present value of an investment that will be worth $1,000 at the…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: Use the present value formula to determine the amount to be invested now, or the present value…

A: Present Value refers to the value of cash flows today which is to be received at some future time…

Q: Calculate the present value PV(n dollars) of an investment that w be worth $1,000 at the stated…

A: Present value (PV) is the current estimation of a future amount of cash or stream of income given a…

Q: An investment is expected to generate cash flows of $20,000 next year (at time t=1), and $10,000 in…

A: Given: Year Particulars Amount 1 Cash inflows $20,000 2 Cash inflows $10,000 Growth rate…

Q: A project has an initial cost of $90,400, a life of 9 years, and equal annual cash inflows. The…

A: The term profitability index is used to access the attractiveness of a project. The profitability…

Q: a) How much will this investment be worth after 10 years? (Round your answer to the nearest cent.) $…

A: Investment Amount = $49,000 Time period = 10 years Rate of interest = 8% compounded continuously.…

Q: If Quail Company invests $50,000 today, it can expect to receive $10,000 at the end of each year for…

A: Introduction: The net present value of a capital asset is a metric that measures whether or not to…

Q: An investment offers $7,100 per year for 20 years, with the first payment occurring one year from…

A: When a fixed amount is received over the years, it is termed as annuity. To find the present value…

Q: Use the present value formula to determine the amount to be invested now, or the present value…

A: The amount needed now can be calculated with the help of present value function

Q: Calculate the present value PV (in dollars) of an investment that will be worth $1,000 at the stated…

A: To calculate the present value we will use the below formula Present value = FV/(1-d)n Where FV -…

Q: Calculate the present value PV (in dollars) of an investment that will be worth $1,000 at the stated…

A: Future value after 12 years (FV) = $1,000 Quarterly period (p) = 48 (i.e. 12 years * 4) Quarterly…

Q: Find internal rate of return of a project with an initial cost of $43,000, expected net cash inflows…

A: Working of the IRR of the Project is shown below: Hence, the IRR is 14.90%.

Q: Use the graph below to answer the following questions. What is the approximate final value of…

A: Future value = Present value * ( 1 + Interest rate )time

Q: An investment requires an initial disbursement of € 2,500,000 and the duration of the project is 3…

A: The difference between the present worth of cash inflows and withdrawals over a time period is the…

Q: 2. For the net cash flow series shown, find the external rate of return using the ROIC method at an…

A: For calculation external rate of return, first we need to discount the outflows at rate of…

Q: Alternatives A and B require investments of $10,310 and $13,400, respectively. For 5 years their…

A: Capital budgeting indicates the evaluation of the profitability of possible investments and projects…

Q: The value of an investment comes from its cash flows. Let’s say you are intent on receiving $45,000…

A: A concept through which it is studied that the current worth of money is higher than its future…

Q: Calculate, to the nearest cent, the future value FV (in dollars) of an investment of $10,000 at the…

A: A theory that helps to compute the present or future value of the cash flows is term as the TVM…

Q: You are looking to invest in a project. The expected return of 5% is used as the discount rate. The…

A: Discount Rate = 5℅ Initial Investment = P6,000,000

Q: uppose that $5000 is invested each quarter, for the next 20 years. what is the future worth if the…

A: An annuity is a sum of series of payments after every year or after every quarter. An annuity can be…

Q: Consider an investment that costs 100,000 and has a cash inflow of 30,000 every year for 5 years.…

A: Given Information, Initial Cost =100,000 Cash Inflow = 30,000 Annually Time Period =5 years…

Q: Calculate the net present value of a project which requires an initial investment of ₱1,000,000 with…

A: Capital budgeting is a process or method of selecting appropriate and most suitable projects or…

Q: An investment offers to pay you $300 per quarter for 10 years. If the annual rate is 11% with…

A: given, quaterly payment N 10 x 4 = 40 I 11%4 PV find PMT $300 FV

Q: The rate of return on an investment of $1500 that doubles in value over a 4-year period, and…

A: We will use the NPER formula in excel =NPER(rate, pmt,pv,-fv,type) where NPER is the number of…

Q: A project requires a $3 million investment in net working capital (NWC) today, and will be fully…

A: As per the given information: Investment in net working capital (NWC) - $3 million Recovered fully…

Q: Compute NPV and IRR if the required return is 12 percent. Year…

A: Net present value is the capital budgeting technique which is used for evaluating the investment…

Q: Calculate Net Present Value of minitor that costs $ 35,000.00 Amortization period 5 years with…

A: Net present value refers to the techniques used by the management to evaluate the profitability of…

Q: Initial investment of 900 million with operating costs of 40 million/year. The profit in the first…

A: Payback period is a capital budgeting technique which highlights the time period within which the…

Q: An investment requires an initial disbursement of €2,500,000 and the duration of the project is 3…

A: Capital budgeting indicates the evaluation of the profitability of possible investments and projects…

Q: Approximately how many years would it take for an investment of $5,250 to accumulate to $15,000,…

A: Calculate the number of years by using present value table.

Q: An investment with an initial outlay of R500 000 generates five successive annual cash inflows of…

A: Profitability Index: The PI index the profitability index of the project. The shows the…

Q: An investment under consideration has a payback of seven years and a cost of €724,000. Assume the…

A: given information payback period = 7 years cost = €724,000. required rate of return = 12%

Q: Calculate, to the nearest cent, the present value of an investment that will be worth $1,000 at the…

A: In finance, the term future value shows a dollar sum expected to be received at some point in the…

Q: Suppose that a project has an immediate cost of $10 million and running costs of $1 million per year…

A: A. NPV = Cash inflow- Cash outflow Cash outflow= $ 10 million Cash inflow= Net profit/ interest rate…

Q: An investment of $80,000 yields a net income of $10,000 per year. How many years does it toke to…

A: Data given: Investment = $80,000 Net income = $10,000 per year Nominal interest rate = 6.5%…

Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

Invest $28,000; Compounded quarterly; 30 years; Annual Interest Rate of 3.5%; Find the Future Value.

Variable Value

N =

I% =

PV =

PMT=

FV =

P/Y =

C/Y =

What is the Missing Variable Unit?

Write a Context Sentence:

Video Video

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

Given-

VIEW

Solution-

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

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

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?
Assume that an investment of 100,000 produces a net cash flow of 60,000 per year for two years. The discount factor for year 1 is 0.89 and for year 2 is 0.80. The NPV is a. 0 b. 6,800 c. 1,400 d. (4,000)
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?
Buena Vision Clinic is considering an investment that requires an outlay of 600,000 and promises a net cash inflow one year from now of 810,000. Assume the cost of capital is 10 percent. Required: 1. Break the 810,000 future cash inflow into three components: a. The return of the original investment b. The cost of capital c. The profit earned on the investment 2. Now, compute the present value of the profit earned on the investment. 3. Compute the NPV of the investment. Compare this with the present value of the profit computed in Requirement 2. What does this tell you about the meaning of NPV?
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 (for further instructions on future value in Excel, see Appendix C): A. 20 years at 22% B. 12 years at 10% C. 5 years at 14% D. 2 years at 7%
Project X costs $10,000 and will generate annual net cash inflows of $4,800 for five years. What is the NPV using 8% as the discount rate?
Today (t=0), you invested the starting prinipal of 1536 dollars. At the end of the first, second and third years, you will receive payments in the amount of 40%, 45% and 50% respectively of your initital investment. What is the net present value (NPV) of the investment if the minimum attractive rate of return (MARR) is 7.8%. Calculate the MARR for an NPV between $0 and $1 and draw the cash flow diagram.
An investment under consideration has a payback of seven years and a cost of €724,000. Assume the cash flows are conventional. Requirement 1: If the required return is 12 per cent, what is the worst-case NPV?
Investment If $5000 is invested for 6 years atinterest rate r (as a decimal), compounded annually, the future value of the investment is given byS = 5000(1 + r) 6dollars.a. Find the future value of this investment for selectedinterest rates by completing the following table. b. Graph this function for 0 <= r <= 0.20.c. Compute the future value if the rate is 10% and20%. How much more money is earned at 20%?
A $100,000 investment yields an annual return of $11,730.82 the first year; thereafter, annual returns increase at an annual rate of 6%. The MARR is 8% compounded annually. a) What is the DPBP for the investment? Show your answer to 2 decimal places. b) Based on a 10-year planning horizon, what is the ERR for the investment? Show your answer as a percentage to 2 decimal places.) Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
An investment under consideration has a payback of seven years and a cost of $870,000. Assume the cash flows are conventional. If the required return is 11 percent, what is the worst-case NPV?