The management of Kunkel Company is considering the purchase of a $41,000 machine that would reduce operating costs by $9,000 per year. At the end of the machine’s five-year useful life, it will have zero salvage value. The company’s required rate of return is 12%
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The management of Kunkel Company is considering the purchase of a $41,000 machine that would reduce operating costs by $9,000 per year. At the end of the machine’s five-year useful life, it will have zero salvage value. The company’s required
Click here to view Exhibit 12B-1 and Exhibit 12B-2, to determine the appropriate discount factor(s) using table.
Required:
1. Determine the
2. What is the difference between the total, undiscounted
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- Appendix 9.1 – Period 7 at 10%Present value of $1 received in n periods= 0.5132 Appendix 9.2- Period 4 at 14% Present value of an annuity of $1 per period = 4.8684Exhibit A.9 Present Value of an Annuity of $1 Year 1/2% 1% 2% 4% 5% 6% 8% 10% 12% 14% 15% 16% 18% 20% 22% 24% 25% 30% 35% 40% 1 0.995 0.990 0.980 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.870 0.862 0.847 0.833 0.820 0.806 0.800 0.769 0.741 0.714 2 1.985 1.970 1.942 1.886 1.859 1.833 1.783 1.736 1.690 1.647 1.626 1.605 1.566 1.528 1.492 1.457 1.440 1.361 1.289 1.224 3 2.970 2.941 2.884 2.775 2.723 2.673 2.577 2.487 2.402 2.322 2.283 2.246 2.174 2.106 2.042 1.981 1.952 1.816 1.696 1.589 4 3.950 3.902 3.808 3.630 3.546 3.465 3.312 3.170 3.037 2.914 2.855 2.798 2.690 2.589 2.494 2.404 2.362 2.166 1.997 1.849 5 4.926 4.853 4.713 4.452 4.329 4.212 3.993 3.791 3.605 3.433 3.352 3.274 3.127 2.991 2.864 2.745 2.689 2.436 2.220 2.035 6 5.896 5.795 5.601 5.242 5.076 4.917 4.623 4.355 4.111 3.889 3.784 3.685 3.498 3.326 3.167 3.020 2.951 2.643 2.385 2.168 7 6.862 6.728 6.472 6.002 5.786 5.582 5.206 4.868 4.564 4.288 4.160 4.039 3.812 3.605 3.416 3.242 3.161 2.802 2.508 2.263…Problem 5-6 Present Value of an Annuity Due (LG5-6)If the present value of an ordinary, 6-year annuity is $5, 600 and interest rates are 7.5 percent, whats the present value of the same annuity due?Note: Round your percentage answer to 2 decimal places (i. e.. 0.1234 should be entered as 12.34).
- 12.ABC Co received from a customer a 5-year non-interest bearing note of P120,000 on Jan 1, 20X1. Effective rate is 12% and due on Dec 31, 20X5. PV of P1 at 12% for 5n = .56743 PV of an ordinary annuity of P1 at 12% for 5n = 3.60478The note would be initially recorded on Jan 1, 20X1 at: 120,000 86,515 68,092Present value of an Annuity of $1 in Arrears Periods 4% 6% 8% 10% 12% 14% 1 0.962 0.943 0.926 0.909 0.893 0.877 2 1.886 1.833 1.783 1.736 1.690 1.647 3 2.775 2.673 2.577 2.487 2.402 2.322 4 3.630 3.465 3.312 3.170 3.037 2.914 5 4.452 4.212 3.993 3.791 3.605 3.433 6 5.242 4.917 4.623 4.355 4.111 3.889 7 6.002 5.582 5.206 4.868 4.564 4.288 8 6.733 6.210 5.747 5.335 4.968 4.639 9 7.435 6.802 6.247 5.759 5.328 4.946 10 8.111 7.360 6.710 6.145 5.650 5.216 Lucas Company is considering a project with an initial investment of $530,250 in new equipment that will yield annual net cash flows of $95,000, and will be depreciated at $75,750 per year over its seven year life. What is the internal rate of return? a.6% b.14% c.10% d.12% e.8%(16) Here is a table for the present value of $1 at compound interest. Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636 5 0.747 0.621 0.567 Here is a table for the present value of an annuity of $1 at compound interest. Year 6% 10% 12% 1 0.943 0.909 0.893 2 1.833 1.736 1.690 3 2.673 2.487 2.402 4 3.465 3.170 3.037 5 4.212 3.791 3.605 Using the provided present value tables, what would be the present value of $11,000 to be received 4 years from today, assuming an earnings rate of 10%?
- Question content area top Part 1 (Related to Checkpoint 6.4) (Present value of a perpetuity) What is the present value of a $ 220 perpetuity discounted back to the present at 8 percent? Question content area bottom Part 1 The present value of the perpetuity is $ enter your response here . (Round to the nearest cent.)PART 1. SIMPLE INTEREST, SIMPLE DISCOUNT, PROMISSORY NOTE. a. What is the principal invested from June 10, 2020 which will amount to 50,000 on October 20, 2021 using 14.8% simple interest? b. Find the simple discount on 12,000 due at the end of 1 year and 6 months with 7.5% simple discount rate. How much is the proceeds? c. Five J’s company received a 100,00 promissory note at 10% simple interest for 9 months from one of its customers. After 6 months, the note was discounted at a bank at a discount rate 7.8%. How much did the company receive from the discounted note?Question content area top Part 1 (Related to Checkpoint 6.4) (Present value of a perpetuity) What is the present value of a $350 perpetuity discounted back to the present at 16 percent? Question content area bottom Part 1 The present value of the perpetuity is $enter your response here. (Round to the nearest cent.)
- Hello! Please help me with as much of this as you can. Thank you! Present Value of an Annuity of $1at Compound Interest (Partial Table) Year 10% 20% 1 0.909 0.833 5 3.791 2.991 10 6.145 4.192 Alpha Beta Gamma Annual net cash flow $fill in the blank 7f0ece094062012_1 $fill in the blank 7f0ece094062012_2 $fill in the blank 7f0ece094062012_3 Present value factor fill in the blank 7f0ece094062012_4 fill in the blank 7f0ece094062012_5 fill in the blank 7f0ece094062012_6 Present value of annual net cash flows $fill in the blank 7f0ece094062012_7 $fill in the blank 7f0ece094062012_8 $fill in the blank 7f0ece094062012_9 Amount to be invested fill in the blank 7f0ece094062012_10 fill in the blank 7f0ece094062012_11 fill in the blank 7f0ece094062012_12 Net present value $fill in the blank 7f0ece094062012_13 $fill in the blank 7f0ece094062012_14 $fill in the blank 7f0ece094062012_15 Question Content Area Final Questions After reviewing all your data,…34.ABC Co received from a customer a 3-year non-interest bearing note of P120,000 on Jan 1, 20X1. Effective rate is 10% and collectible in 3 equal annual installments beginning Dec 31, 20X1. PV of P1 at 10% for 3n= .75131 PV of an ordinary annuity P1 at 10% for 3n =2.48685The carrying value of the note at Jan 1, 20X2 would be: 120,000 99,474 80,000 69,421