1. A business man wishes to set aside semiannual payments to purchasemachinery after two years (two years from now). The machinery's estimatedcost is Birr 8000. Each payment earns interest at 12%compoundedsemiannually.a) Find the semiannual paymentb) Find the total interest earnedc) Prepare a sinking fund schedule2. Strong steel company operates two steel mills with different production capacities.Mill I can produces 1000 tons per day of AAA steel, 3000 tons per day of AA steel,5000 tons of per day of A steel. Mill F can produce 2000 tons per day of each gradeof steel. The company has made a contract with the construction firm to provide24,000 tons of AAA steel, 32,000 tons of AA steel and 40,000 tons of A steel. The costof running mill I is $1,400 per day and mill F is $ 1000 per day. (2 pt each)a) Formulate linear programming model?b) How many amount of mill I and F should be produced? Solve by usinggraphical method? & Simplex Solution Method3. A person deposits Birr 10,000 in a savings account that pays 6% compounded semi-annually. Three years later, this person deposits an additional Birr 8,000 in thesavings account. Also, at this time, the interest rates changes to 8% compoundedquarterly. How much money is in the account 5 years after the original Birr 10,000is deposited?4. What rate compounded monthly is equivalent to 8% compounded quarterly? (1 pt)5. Ms. X has a saving goal of Birr 25,000 which she would like to reach 10 years fromnow. During the first five years she is financially able to deposit only Birr 100 eachmonth into the savings account. What must her monthly deposits over the last fivevears be if she is to reach the goal? The account pays 12% interest compoundedmonthly.

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1. A business man wishes to set aside semiannual payments to purchase machinery after two years (two years from now). The machinery's estimated cost is Birr 8000. Each payment earns interest at 12% compounded semiannually. a) Find the semiannual payment b) Find the total interest earned c) Prepare a sinking fund schedule

1. A business man wishes to set aside semiannual payments to purchase machinery after two years (two years from now). The machinery's estimated cost is Birr 8000. Each payment earns interest at 12% compounded semiannually. a) Find the semiannual payment b) Find the total interest earned c) Prepare a sinking fund schedule

EBK CONTEMPORARY FINANCIAL MANAGEMENT

14th Edition

ISBN:9781337514835

Author:MOYER

Publisher:MOYER

Chapter16: Working Capital Policy And Short-term Financing

Section: Chapter Questions

Problem 28P

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