Managerial Accounting: Tools for Business Decision Making
7th Edition
ISBN: 9781119034681
Author: Weygandt
Publisher: WILEY
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Textbook Question
Chapter A, Problem A.2BE
Kor each of the following cases, indicate (a) what interest rate columns and (b) what number of periods you would refer to in looking up the future value factor.
(1) In Table 1 (future value of 1):
(2) In Table 2 (future value of an annuity of 1):
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Find the following:
a. interest rate per conversion period
b. future amount
c. compound interest
d. conversion period per year
e. total number of conversion period
For each of the following situations, identify (1) the case as either (a) a present or a future value and (b) a single amount or an annuity, (2) the table you would use in your computations (but do not solve the problem), and (3) the interest rate and time periods you would use. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided. Round "Table Factors" to 4 decimal places.)a. You need to accumulate $20,000 for a trip you wish to take in five years. You are able to earn 10% compounded semiannually on your savings. You plan to make only one deposit and let the money accumulate for five years. How would you determine the amount of the one-time deposit?b. Assume the same facts as in part (a) except that you will make semiannual deposits to your savings account. What is the required amount of each semiannual deposit?1. You want to retire after working 40 years with savings in excess of $1,000,000. You expect to save $4,000 a year for 40 years…
For each of the following situations, Identify (1) the case as either (a) a present or a future value and (b) a single amount or an annulty.
(2) the table you would use in your computations (but do not solve the problem), and (3) the Interest rate and time periods you would
use. (PV of $1, FV of $1, PVA of $1, and FVA of $1)
Note: Use appropriate factor(s) from the tables provided. Round "Table Factors" to 4 decimal places.
a. You need to accumulate $10,100 for a trip you wish to take in four years. You are able to earn 10% compounded semiannually on
your savings. You plan to make only one deposit and let the money accumulate for four years. How would you determine the amount
of the one-time deposit?
b. Assume the same facts as in part (a) except that you will make semiannual deposits to your savings account. What is the required
amount of each semiannual deposit?
1. You want to retire after working 40 years with savings in excess of $1,020,000. You expect to save $4,080 a year for 40…
Chapter A Solutions
Managerial Accounting: Tools for Business Decision Making
Ch. A - Prob. A.1BECh. A - Kor each of the following cases, indicate (a) what...Ch. A - Liam Company signed a lease for an office building...Ch. A - Prob. A.4BECh. A - Prob. A.5BECh. A - Prob. A.6BECh. A - For each of the following cases, indicate (a) what...Ch. A - Prob. A.8BECh. A - Prob. A.9BECh. A - Prob. A.10BE
Ch. A - Prob. A.11BECh. A - Prob. A.12BECh. A - Dempsey Railroad Co. is about to issue 400,000 of...Ch. A - Prob. A.14BECh. A - Neymar Taco Company receives a 75,000, 6-year note...Ch. A - Prob. A.16BECh. A - Frazier Company issues a 10%, 5-year mortgage note...Ch. A - Prob. A.18BECh. A - Prob. A.19BECh. A - Prob. A.20BECh. A - Prob. A.21BECh. A - Prob. A.22BECh. A - Prob. A.23BECh. A - Prob. A.24BECh. A - Prob. A.25BECh. A - As the purchaser of a new house, Carrie Underwood...Ch. A - Using a financial calculator, solve for the...Ch. A - Using a financial calculator, provide a solution...
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- When using the interest tables, the needed interest rate is determined from the intersection between the _____________. a interest rate and number of periods b interest rate and factor type c number of periods of factor type d none of thesearrow_forwardCalculate the present value of the following annulties, assuming each annuity payment is made at the end of each compounding period. (FV of $1, PV of $1, FVA of $1, and PVA of S1) (Use tables, Excel, or a financial calculator. Round your answers to 2 decimal places.) \table[[, \table[[Annuity], [Payment]], \table [[ Annual], [Rate]], \table[[Interest], [Compounded]], \table [[Period], [Invested]], \table [[Present Value of], [ Annuity]]], [1., $5,000, 7.0%, Semiannually,3 years,], [2., 10, 000, 8.0%, Quarterly,2 years, ], [3., 4,000, 10.0 %, Annually,5 years,]]arrow_forwardTime value of money calculations can be solved using a mathematical equation, a financial calculator, or a spreadsheet. Which of the following equations can be used to solve for the future value of an annuity due? PMT x {[(1 + r)ª − 1]/r} x (1 + r) O FV/(1 + r)¹ PMT x {[(1 + r)" - 1]/r} O PMT x ({1 - [1/(1 + r)"]}/r) x (1 + r)arrow_forward
- The value of the interest rate depends on the --------- of the time period. Select one: a. length b. size c. minimum d. maximumarrow_forwardInterest rates or discount rates. Fill in the interest rates for the following table using one of the three methods below: a. Use the interest rate formula, r=FVPV1n−1. b. Use the TVM keys from a calculator. c. Use the TVM function in a spreadsheet. Present Value Future Value Number of Periods Interest Rate $ 493.61 $ 1,902.61 20 ? $17,077.77 $228,416.84 32 ? $34,251.51 $ 63,755.61 24 ? $26,813.61 $212,279.67 10 ? Present Value Future Value Number of Periods Interest Rate $ 493.61 $ 1,902.61 20 nothing% (Round to two decimal places.) $17,077.77 $228,416.84 32 nothing% (Round to two decimal places.) $34,251.51 $ 63,755.61 24 nothing% (Round to two decimal places.) $26,813.61 $212,279.67 10 nothing% (Round to two decimal places.)arrow_forwardIncreasing the number of periods will increase all of the following except Select one: a. the present value of $1. b. the future value of an annuity. c. the future value of $1.arrow_forward
- 2 Given a set of present value tables, an annual interest rate, the dollar amount of equal payments made, and the number of semiannual payments, what other information is necessary to calculate the present value of the series of payments? A. The future value of the annuity. B. The timing of the payments (whether they are at the beginning or end of the period). C. The rate of inflation. D. No other information is required.arrow_forwardCompute the interest rate if future value (FV) = $8011, present value (FV) = $2685, and number of years (t) = 6.arrow_forwardFind the interest rate implied by the following combinations of present and future values. present values $330, Years 10, future value 591, interest rate? present values $148, Years 3, future value 192, interest rate? present values $230, Years 6, future value 230, interest rate?arrow_forward
- Increasing the number of periods will increase all of the following except: Select one: A. The present value of an annuity B. The present value of $1 C. The future value of $1 D. The future value of an annuityarrow_forwardFor part d, told to manipulate the equation: ΔM(t)= rM(t)Δt M(t) represents the money value at time t E is the final value of the note r is the interest rate Δt is expiration minus today's datearrow_forwardUse factors and a spreadsheet to determine the interest rate per period from the following equation: 0 = -26,000 + 8,000(P/A,i∗,5) + 8,000(P/F,i∗,8) What is the interest rate per period? %arrow_forward
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Internal Rate of Return (IRR); Author: The Finance Storyteller;https://www.youtube.com/watch?v=aS8XHZ6NM3U;License: Standard Youtube License