A company wishes to set aside money now to invest over the next 14 years. The company can earn 10% on money deposited now, and it wishes to withdraw 8,000$ for the last 11 years. How much money must be deposited now to cover the anticipated payments over the next 12 years?

A company wishes to set aside money now to invest over the next 14 years. The company can earn 10% on money deposited now, and it wishes to withdraw 8,000$ for the last 11 years. How much money must be deposited now to cover the anticipated payments over the next 12 years?

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 3PB: Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate...

See similar textbooks

Related questions

Q: what is the future value of cash flow of ¢2,000.00 for the first month and a monthly rise of 0.1%…

A: 1st deposit =2000 Increase per month = 0.1% = 0.001 Increase Factor(r) = 1+0.001 = 1.001 Number of…

Q: Leyton Lumber Company has sales of $11 million per year, all on credit terms calling for payment…

A: Days Sales Outstanding: The average number of days it takes a firm to receive payment for a…

Q: The company is going to invest P26,000, P34,000, P46,000, and P54,000 respectively into a savings…

A: Solution:- When an amount is invested somewhere, it earns interest on it. The amount initially…

Q: 1. EVA Air announces that the airlines tickets for Cebu-San Francisco flight will increase 8% in…

Q: Norton Company has a 12% interest rate. If the firm invests $60,000 today, how much will have…

A: The Future Value: The value accumulated by an investment made today, at a given interest rate at the…

Q: Milo Corp. wants to accumulate $ 500,000 for a payment that will become due in 5 years. That is , at…

A: Using excel PMT function

Q: A company plans to buy new equipment in 6 years. They will start by saving $3,091 at the end of this…

A: The given answer is correct

Q: As an engineer, you plan to put aside 20% of your yearly income. You expect to make Php1 million in…

A: Savings = 20% of yearly Income N = 6 First year income = 1,000,000 Savings = 20%*1,000,000 Savings =…

Q: Milo Corp. wants to accumulate $ 500,000 for a payment that will become due in 5 years. That is , at…

A: Future Value (FV)= $ 500,000 Time period (n)= 5 years Rate of interest (r)= 8% annual Amount of…

Q: Computer Sciences Corporation provides software security systems for airports. It wants to have $85…

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

A: Net Present Value = Present value of cash inflows + Present value of salvage value - Initial…

Q: If a company is investing money at 6% interest compounded monthly and wants to have $40,000 in 4…

A: Calculate the payment as follows:

Q: hat capital must be invested to have $

A: Time value of money (TVM) means the amount of money received in the present period will have more…

Q: quarterly

A: Introduction: The amount that would be in the account at the end of a particular time period is…

Q: will your hotel have at the end of the 10th year ($)?

A: Future value refers to the amount of a current cash flow at some future date based on the given…

Q: As an engineer, you plan to put aside 20% of your yearly income. You expect to make Php1 million in…

A: Savings = 20% of yearly Income N = 6 First year income = 1,000,000 Savings = 20%*1,000,000 Savings =…

Q: Microsoft Co. places 150,000 in an investment that has a return of 8%. The investment is placed…

A: given, PV = 150,000 r=8% n = 12 years withdrawal year = 6

Q: How much money would be accumulated 15 years from now from deposits of $11,000 per year for 5…

A: Here, Amounted deposited for 5 consecutive years is $11,000 per year Interest Rate is 12% Total…

Q: How much must be deposited

A: An Annuity is a series of payments of fixed amounts and at fixed intervals. These can be of two…

Q: Ten years ago, you deposited P5400 per month. You made the deposit for 6 years and then stopped. 4…

A: Calculations are done in excel so there is no intermediate rounding effective monthly interest rate…

Q: If 2400 dollars is invested in an account for 10 years. Find the value of the investment at the end…

A: Future value(FV) is the value of initial investments at a future date after compounding it with a…

Q: TIME TO REACH A FINANCIAL GOAL You have $33,556.25 in a brokerage account, and you plan to deposit…

A: Given, Present value = $33556.25 Future value = $220000 interest r 12/100 = 0.12% Years…

Q: How many years will it take Rexchem, Inc., to accumulate $375,000 for a chemical feeder, if the…

Q: Each month you put $69.60 into the bank, with an APR of 3%, how much with you have after 10 years.…

A: We will make use fo the financial calculator to calculate the FV. Inputs are: n = number of periods…

Q: What is the total expected amount that the company will have at the end of the 4th year?

A: Compound Interest is one of the method of interest payment, under this, interest is paid to the…

Q: A company must pay a $303,000 settlement in 5 years. (a) What amount must be deposited now at 5%…

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts…

Q: What will $248,000 grow to be in 12 years if it is invested today in an account with an annual…

A: Future Value = P(1+r/n)^ntWhere P = Principal = $248,000R = Rate on interest = 15%N = number of…

Q: If a company will pay $75,000 for a truck that will increase deliveries to be made which will give…

A: The cost of cash = $75,000 Revenue per year = $10,000 Time period = 10 years Interest Rate = 4%

Q: 1) Mr. Ang's money became Php165,000 @ the end of 10 months. If the bank pays 12% annually, how much…

A: Future value (FV) = Php 165,000 Period (n)= 10 Months = 10/12 Years = 0.833333333333333 Years…

Q: You wish to have $20,000 in an account 8 years from now. How much moneymust be deposited in the…

A: Computation:

Q: As an engineer, you plan to put aside 20% of your yearly income. You expect to make Php1 million in…

A: Savings = 20% of yearly Income N = 6 First year income = 1,000,000 Savings = 20%*1,000,000 Savings =…

Q: If a company invests $10,000 at 7% simple interest for 20 years, how much will it have at the end of…

A: Formula: Future value = Amount + Interest Future value = $10,000 + ($10,000*7%*20) Future value…

Q: A company that manufactures digital pressure gauges just borrowed $10,000,000 with the understanding…

A: Annual payment (A)= $2,000,000 Number of years (n)= 4 Interest rate (i)= 8% per year How much will…

Q: How many years will it take Rexchem, Inc. to accumulate $400,000 for a chemical feeder if the…

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

Q: This morning, Mariam Inc invested $800,000 to help fund a company expansion project planned for 4…

A: given, pv = $800,000 n=4 r1= 4.59% r2= 5.59%

Q: How much would a company have to invest now in order to sufficiently provide for annual payments of…

A: Solution:- Calculation of the How much would a company have to invest as follows under:-

Q: A small business has determined that the machinery they currently use will wear out in 17 years. To…

A: The question is based on the concept of Financial Management.

Q: What is the rate of return on an investment of $150,000 if the company expects to earn $12,000…

A: The rate of return earned on the investment can be calculated with the help of RATE function of…

Q: The company has sales of $ 10 million per year, all of which are from credit terms that require…

A: The average number of days that is taken by the company to recover its sales payment or its accounts…

Q: Leyton Lumber Company has sales of $10 million per year, all on credit terms calling for payment…

A: Days sales outstanding refers to the number of days taken by the company in collecting the cash from…

Q: French Fried Food Inc. wishes to accumulate P500,000 during the next 24 months to open a second…

A: The amount which are paid constantly without any change in amount or frequency is called Annuity and…

Q: Your company wants to have GHS 135,000 four years from now to buy a new machine. As the financial…

A: GIVEN, fv=135,000 N=4 R=12% LET ANNUAL DEPOSIT = A

Q: A small business owner contributes $3,000 at the end of each quarter to a retirement account that…

A: Given information: Quarterly payment $3,000 Interest rate 10% compounded quarterly Future value is…

Q: Leyton Lumber Company has sales of $12 million per year, all oncredit terms calling for payment…

A: Capital refers to the desired amount of cash and other financial assets such as stocks, bonds,…

Q: Net revenues at an older manufacturing plant will be $2 million for this year. The net revenue will…

A: The present value of the cash flow is the current worth of a cash flow at a certain rate of interest…

Question

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

Introduction

VIEW

Computation

VIEW

Conclusion

VIEW

Step by step

Solved in 3 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, finance and related others by exploring similar questions and additional content below.

Similar questions

Use the tables in Appendix B to answer the following questions. A. If you would like to accumulate $4,200 over the next 6 years when the interest rate is 8%, how much do you need to deposit in the account? B. If you place $8,700 in a savings account, how much will you have at the end of 12 years with an interest rate of 8%? C. You invest $2,000 per year, at the end of the year, for 20 years at 10% interest. How much will you have at the end of 20 years? D. You win the lottery and can either receive $500,000 as a lump sum or $60,000 per year for 20 years. Assuming you can earn 3% interest, which do you recommend and why?
You want to invest $8,000 at an annual Interest rate of 8% that compounds annually for 12 years. Which table will help you determine the value of your account at the end of 12 years? A. future value of one dollar ($1) B. present value of one dollar ($1) C. future value of an ordinary annuity D. present value of an ordinary annuity
How much must be invested now to receive $50,000 for 8 years if the first $50,000 is received in one year and the rate is 10%?
How much would a company have to invest now in order to sufficiently provide for annual payments of $313,000 over a 8-year period? Assume the interest rate is 12% per year.
You invested $2m today in an account that is expected to earn 15% annually for the next five years. As a result of this investment, the account will pay you the same amount $Y per year for the next five years, after which you will have $0 in the account. At the end of year 1, what is the balance in the account after the withdrawal of the first $Y?
Suppose you make a one-time $ 8,000 investment into an account that yields a 12% annual return. If you keep the account for 10 years, what should be the account balance? Round your answer to 2 decimal places
You want to be able to withdraw $4500 from an account at the end of each 6-month period (that is, twice a year) for the next 11 years. How much money should you invest now into an account earning 4.1% interest per year, compounded every 6 months, in order to fund the desired withdrawals? Assume the account is empty after the last withdrawal is made. Give the answer correctly to 2 decimal places. The amount to invest now is ______ dollars.
Suppose that you invest $20 000 in an account paying 8% interest. You plan to withdraw $2000 at the end of each year for 15 years. How much money will be left in the account after 15 years?
How many years will it take for $136,000 to grow to be $468,000 if it is invested in an account with an annual interest rate of 8%?
You plan to make a lump-sum deposit of $5000 now into an investment account that pays 6% per year, and you plan to withdraw an equal end-of-year amount of $1000 for 5 years, starting next year. At the end of the sixth year, you plan to close your account by withdrawing the re- maining money. Define the engineering economy symbols involved.
You need to accumulate $10,000. To do so, you plan to make deposits of $1,250 per year, with the first payment being made a year from today, in a bank account that pays 12% annual interest. Your last deposit will be less than $1,250 if less is needed to round out to $10,000. How many years will it take you to reach your $10,000 goal, and how large will the last deposit be?
You want to be able to withdraw $8500 from an account at the end of each 6-month period (that is, twice a year) for the next 10 years. How much money should you invest now into an account earning 2.9% interest per year, compounded every 6 months, in order to fund the desired withdrawals? Assume the account is empty after the last withdrawal is made. Give the answer correctly to 2 decimal places.