A government decided to make a 25-year loan on $2,000,000 to a "Toll Road Authority". The first 4 year of the loan period was spent on road construction during which time the government agreed to "capitalize" the interest until the road construction is completed and toll collection has started in the 5th year. $400,000 was expected to be spent at the beginning of the each of the first two years and the rest was also spent equally at the beginning of the 3rd and 4th year.
a) What annual payment by the Toll Authority would repay the loan (principal plus interest) over the remaining 21 years at 10% annual
b) Assume the annual profit (toll collection minus all kinds of cost excluding the loan payment) is $350,000 and the life cycle is 21 year with zero salvage value. What is the
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- Please answer ASAP PLEASEarrow_forwardDetermine the PW of the following cash flows (CF) at 6% interest : @Year 0 = -14K , @ Year 1 = -8K, @ Year 2 = 13K, @ Year 3 = 22K, @Year 4 = -14K, @ Year 5 = -4K and @Year 6 = 12K Compute manually pls. No excel solutionarrow_forwardThe City of Townsend’s city council authorized the establishment of an internal service fund to provide human resource services to city departments.The following transactions took place in the inaugural month of Townsend’s Human Resource internal service fund: The General Fund transferred $100,000 to cover initial expenses. The transfer is not expected to be repaid. The Human Resources Fund entered into a 2-year computer lease with an initial $5,000 payment. The present value of the remaining payments is $82,218. Salaries and wages paid to employees totaled $15,000. Office supplies were purchased on account for $2,500. Billings totaling $3,000 were received from the enterprise fund for utility charges. Billings to other departments for services provided to them were as follows: General Fund $ 16,000 Special Revenue Fund 4,700 Closing entries were prepared. Required a-1. Assume all expenses at the government-wide level are charged to the General…arrow_forward
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