Answered: The present worth of of P40,000 in the…

The present worth of of P40,000 in the first year and amounts of decreasing by P3,000 per year through five years at an interest rate of 13% per year is?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter12: Capital Investment Decisions

Section: Chapter Questions

Problem 5MCQ: An investment of 1,000 produces a net cash inflow of 500 in the first year and 750 in the second...

See similar textbooks

Related questions

Q: A set of cash flows begins at $15,000 the first year, with an increase each year until n = 12 years.…

A: The current value of the cash flow or stream of cash flow after discounting is termed as the present…

Q: The present worth of of P40,000 in the first year and amounts of increasing by P3,000 per year…

A: Here, Initial cash flow = P40,000 Increase in amount per year through five years = P3,000 Rate of…

Q: The present worth of a decreasing geometric series is 96157$. The interest rate is 8% per year and…

A: Annuity refers to series of equalized payments that are paid or received at start or ending of…

Q: Suppose an investment of P100,000 was made, and it matured to P104,070.70 after eight (8)…

Q: Determine the present value in year zero of a gradient series that begins with a cash flow of $7,000…

A: Interest rate = 8% Cash flow in year 5 = $7000 Annual increase in cash flow = 8%

Q: A set of cash flows begins at $60,000 and increases at 10% per annum for the next 12 years. If the…

A: Begining Cash flow is $60,000 Cash flow growth rate is 10% per annum Time Period is 12 Years…

Q: For what interest rate will an uniform cash flow of $30,000 per year for 20 years, (t=1 to 20) be…

A: Present value of annuity is the present value of all the stream of cash flow that occur in future.

Q: Determine the difference in annual worth between an investment of $100,000 per year for 50 years and…

A: Computation of annual worth (AW) if the interest rate is 5%:

Q: An investment will have a future value equal to Php180,250 after 6 years. It has a nominal rate of…

A: Future value of the investment (F) = Php 180250 r = 10.5% per annum = 2.625% per quarter n = 6 years…

Q: Consider the followingalternatives: i. $120 received in one year ii. $220 received in five years…

A: The present value method is used to find out the profitability of a project by adding up discounted…

Q: A certain amount of money after a decade is said to b worth Php 12,000.00. If the interest rate…

A: first calculate the amount after first half present value = FV/(1+rate)n = 12,000/(1 + 1.1%/6)5*6 =…

Q: How many years will it take for P13,000.00 to become P20,000.00 if it is invested at 8% compounded…

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

Q: An investment will have a future value equal to Php180,250 after 6 years. It has a nominal rate of…

A: The quarterly compounding refers to compounding 4-times a year. To reflect the compounding impact,…

Q: How much was initially invested if the value of the investment is at P200,000 after 3 and a half…

A: The present value is the value of the sum received at time 0. It is the current value of the sum…

Q: If $500,000 is to grow to $700,000 over a 5-year period, at what annual rate of interest must it be…

A: The present value is the value of the sum received at time 0. It is the current value of the sum…

Q: For a 20-year geometric cash flow progression increasing at 2% per year, the first-year amount is…

A: The future worth of the single of a single cash flow is calculated by the following formula. Here,…

Q: A certain amount of money after a decade is said to be worth Php 12,000.00. If the interest rate…

A: Future Value = 12,000 PHP 1 USD = 49 PHP Future Value in USD = 12,000 / 49 = 244.90 USD N = 10 years…

Q: Consider a cash flow that lasts for ten years. the initial value A occurs at the third year,…

A: The time value of money becomes an important factor for capital budgeting decisions. It is an idea…

Q: A set of cash flows begins at $20,000 the first year, with an increase each year until n = 10 years.…

A: Information provided: Initial cashflow = $20,000 n = 10 years interest rate = 8% Present value =…

Q: How much will be the equivalent worth of ₱2M invested today for three years at a commercial rate of…

A: Investment amount (PV) = P 2,000,000 Annual interest rate = 10% Quarterly interest rate (R) = 10%/4…

Q: Consider an EOY geometric gradient, which lasts for eight years, whose initial value at EDY one is…

A: Here, Initial Value of cash flow of first case is $5188 Geometric gradient interest rate is 6% Cash…

Q: If an investment of $45,000 is earning an interest rate of 4.00%, compounded annually, then it will…

A: The number of years that will take to reach $53,686.19 at given interest rate can be calculated…

Q: What per annum nominal interest rate with interest compounded quarterly would be needed to achieve…

A: The present value function or concept can be used to determine the present value of a future sum or…

Q: Consider a cash flow that lasts for ten years. the initial value A occurs at the third year,…

A: Present Value of series = 34,717 Interest Rate = 8% Annual Growth Rate = -6% Cash flows start at end…

Q: The present worth of $5,000 in year 3, $10,000 in year 5, and $10,000 in year 8 at an interest rate…

A: The present worth of cash flows is calculated as sum of discounted value of all cash flows.

Q: A set of cash flows begins at $80,000 the first year, with an increase each year until n = 10 years.…

A: Present Value(PV) is current value of any amount that is to be paid or received in future. It is…

Q: How much was initially invested if the value of the investment is at ₱200,000 after 3 and a half…

A: Present Value: It is the present worth of the investment amount, discounted at an interest rate for…

Q: For a present sum of $620,000, determine the annual worth (in then-current dollars) in years 1…

A: Present sum = 620000 i = 12% inflation rate = 5% n=7 years PW = 620000(A/P,12%,7) =620000(0.2191177)…

Q: Suppose an income stream will produce income at a rate of 4000 + 1000t dollars per year for 5 years,…

A: Present value Present value of an amount with continuous compounding. With continuous compounding…

Q: Consider an EOY geometric sequence of cash flows in which the first payment made was P2,000. This is…

A: Annuity refers to a constant stream of payments made at regular intervals for a defined period. The…

Q: a. What is PV of $100 received in year 10, with 1% discount rate?b. Hans made investment $10 million…

A: Present Value Present value refers to the discounted value of cash flows which is occurring at a…

Q: The present value of P 14,000.00 has a true discount of P 14,700.00 in 7 years. How much is the rate…

A: Future value of amount is computed as sum of present value and true discount.

Q: How much was initially invested if the value of the investment is at P200,000O after 3 and a half…

A: Present value is referred to as the present worth of the investment amount which is discounted at an…

Q: A sum of OMR 25600 is invested at an interest rate of 6.25% per year. If the interest is compounded…

A: The time period or the number of years (NPER) refers to the time it would require for the investment…

Q: Find the present worth of an investment that starts at $8000 in year 1 and increases by 10% each…

A: Time value It tells that value received today has more value than that of receiving the same value…

Q: future value of an investment made 5 years ago is P150,000. If the investment offered an annual…

A: Effective rate goes on increasing if the compounding goes on increasing. And effective rate is less…

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 certain amount of money after a decade is said to be worth Php 10,000.00. IF the interest rate…

A: Present Value = Future Value/(1+EAR)n EAR = (1+nominal rate/m)m -1 m is number of times interest…

Q: What is the present value of end-of-year cash flows of $9,000 per year, with the first cash flow…

A: Cash flow: It denotes to the sum of cash that keeps flowing in the business and out of business…

Q: Given the following cash flows, what is the future value at year ten when compounded at an interest…

A: Future value: The future value of an asset today would be higher than today. it is adjusted on the…

Q: How long will it take the money to double itself if invested at 16% compounded quarterly? In how…

A: Convert 16% compounded quarterly to its equivalent interest rate for annual interval. Here, 'r'…

Q: A small company plans to spend $10,000 in year 2 and $10,000 in year 5. At an interest rate of…

A: Equivalent annual worth analysis is done to determine the net worth after subtracting equivalent…

Q: The Present Worth of $2200 in year 1 and amounts increasing by $500 per year thru year 5 at an…

A: Given information: Cash flow in year 1 is $2,200, Cash flow increases by $500 Interest rate is 13%,…

Q: An investment will have a future value equal to Php180,250 after 6 years. It has a nominal rate of…

A: Time Value of money states that each dollar has earning capacity hence a dollar today is worth more…

Q: What is the present worth of cash flows that begin at $30,000 and decrease at 10% per year for 5…

A: Given that , Cash flows = $30,000 no.of years (t)= 5 years interest rate (r)= 15%

Q: What are the PW and FW of a 20-year geometric cash-flow progression increasing at 2% per year if the…

A: Present worth is the value of money today as compared to the future time. Present worth states that…

Q: The ABC Block Company anticipates receiving $50,000 per year from its investments (with no change)…

A: Calculate discount Factor Interest rate 8% Inflation rate 3% DISCOUNT…

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

The present worth of of P40,000 in the first year and amounts of decreasing by P3,000 per year through five years at an interest rate of 13% per year is?

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Step by step

Solved in 2 steps with 1 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, accounting and related others by exploring similar questions and additional content below.

Similar questions

If an asset declines in value from 5,000 to 3,500 over nine years, what is the mean annual growth rate in the assets value over these nine years?
An investment of 1,000 produces a net cash inflow of 500 in the first year and 750 in the second year. What is the payback period? a. 1.67 years b. 0.50 year c. 2.00 years d. 1.20 years e. Cannot be determined
The present worth of of P40,000 in the first year and amounts of increasing by P3,000 per yearthrough five years at an interest rate of 13% per year is?
An investment of $15,785 is accumulated at 6.5% compounded quarterly for 5 years. At that time the interest rate is changed to 4.3% compounded monthly. How much is the investment worth after 10 years? Answer to the nearest cent.
An investment of $185,575 is expected to generate returns of $65,000 per year for each of the next four years. What is the investment’s internal rate of return? Below is a table for the present value of $1 at compound interest. Year 6% 10% 12% 15% 1 0.943 0.909 0.893 0.870 2 0.890 0.826 0.797 0.756 3 0.840 0.751 0.712 0.658 4 0.792 0.683 0.636 0.572 5 0.747 0.621 0.567 0.497 Below is a table for the present value of an annuity of $1 at compound interest. Year 6% 10% 12% 15% 1 0.943 0.909 0.893 0.870 2 1.833 1.736 1.690 1.626 3 2.673 2.487 2.402 2.283 4 3.465 3.170 3.037 2.855 5 4.212 3.791 3.605 3.353 fill in the blank 1 %
A set of cash flows begins at $80,000 the first year, with an increase each year until n = 10 years. If the interest rate is 5%, what is the present value when (a) the annual increase is $10,000? (b) the annual increase is 15%?
An investment of $8,000 is made at time 0 with returns of $3,500 at the end of each of years 1–4, with all monetary amounts being in real dollars. Inflation is running 7% per year over that time. Also, the real rate of return is 15% per year. Determine the present worth of the investment using both real dollars and then-current dollars.
What is the present value of 600 TL which will be invested at the end of each year during the next 12 years? Discount rate is 3%.6.345,96 TL4.632,785.972,4 TL9.623,478.515,2 TL.
A $90,000 investment is made. Over a 5-year period, a return of $30,000 occurs at the end of the first year. Each successive year yields a return that is $3,000 less than the previous year’s return. If money is worth 5%, use agradient series factor to determine the equivalent present worth for theinvestment.
What are the PW and FW of a 20-year geometric cash-flow progression increasing at 2% per year if the first year amount is $1,020 and the interest rate is 10% per year?
A set of cash flows begins at $25,000 the first year, decreasing 10% each year until n = 10 years. If the interest rate is 4%, what is the present value?
As shown in Table, $1,000 invested at 10 percent compound interest will grow into $1,331 after three years. What is the present value of $2,662 in three years if it is discounted back to the present at a 10 percent compound interest rate? (Hint: $2,662 is twice as much as $1,331.)