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 compound interest? 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 IRR of this project? Comment on the economic feasibility when MARR=13%.

A city wishes to finance the cost of a new sports arena through the issue of a $4 million, 20-year bond. The bond pays semi-annual interest at a rate of j2-5%. In addition to the interest payments, the city must also make semi-annual contributions to a sinking fund that will be used to repay the bond principal ($4 million) at the end of 20 years. The sinking fund will earn j2=3%. a) Calculate the semi-annual sinking fund deposit to 2 decimals: b) Calculate the total periodic cost of debt to 2 decimal

At the start of Year 1, the City Peacock leased 30 computers for use by various officials in school administration and public safety at a total cost of $90,000 per year. The first lease payment is made immediately. The contracts are for five years, the expected life of the computers. After that life period, the city will return them to the lessor. What reporting is appropriate for the city for the first year?

A road is constructed at the capital cost of $10 million.  At the end of Year 10, major improvements are to be made costing $12 million.  At the end of Year 25, a replacement and upgrade is to be done at a cost of $27 million.  At the end of year 40, the federal government issues a one-time tax credit in the amount of $11 million. FIND Over a 50-year analysis period (assuming a 10% interest rate) what is the annualized cost (to the nearest dollar, $###) of all of these expenses?

A city engineer has estimated the annual tollrevenues from a newly proposed highway construction over 25 years as follows:An = (2,500,000)(n)(1.08)n - 1n = 1, 2, c , 25To validate the bond, the engineer was asked to presentthe estimated total present value of toll revenue at aninterest rate of 8%. Assuming annual compounding,find the present value of the estimated toll revenue

broadband service company borrowed $ 2 mil lion for new equipment and repaid the loan in amounts of $ 200,000 in years 1 and 2 plus a lump sum amount of $ 2.2 million at the end of year 3 . What was the interest rate on the loan ? 6.17 A permanent endowment at the University of Alabama is to award scholarships to engineering students two times per year ( end of June and end of December ) . The first awards are to be made beginning 5-1 / 2 years after the $ 20 million lump sum donation is made . If the interest from the endowment is to fund 100 students each semester ( i.e. , twice a year ) in the amount of $ 5000 each semester , what semiannual rate of return must the endowment fund earn ? Identify three possible difficulties with rate of return analyses compared to PW , AW , or FW analyses .

Required information [The following information applies to the questions displayed below.) On January 1, 2024, Monster Corporation borrowed $19 million from a local bank to construct a new highway over the next four years. The loan will be paid back in four equal installments of $5,609,334 on December 31 of each year. The payments include interest at a rate of 7%. 2. Prepare an amortization schedule over the four-year life of the installment note. (Round your final answers to the nearest dollar amount. Enter your answer in dollars, not millions. (i.e., $5.5 million should be entered as 5,500,000.).) Date 12/31/2024 12/31/2025 12/31/2026 12/31/2026 Cash Paid Interest Expense Decrease in Carrying Value Carrying Value

The state of Glottamora has $100 million remaining in its budget for the current year. One alternative is to give Glottamorans a one-time tax rebate. Alternatively, two proposals have been made for state expenditures of these funds. The first proposed project is to invest in a new power plant, costing $100 million and having an expected useful life of 20 years. Projected benefits accruing from this project are as follows:YEARS          BENEFITS PER YEAR ($ MILLIONS)1–5                                       06–20                                     20The second alternative is to undertake a job retraining program, also costing $100 million and generating the following benefits:YEARS            BENEFITS PER YEAR ($ MILLIONS)1–5                                     206–10                                   1411–20                                  4The state Power Department argues that a 5 percent discount factor should be used in evaluating the projects because that is the government’s…

The college is considering funding options for new engineering building on campus. The money has been raised for the construction costs and now the focus is raising funds for the annual upkeep and maintenance (U&M) expenses. For this building, contractors will be hired with a series of 3-year agreements over the 30 years. Under each contract the university will pay $125,000 at the beginning of each 3-year agreement to cover all U&M building expenses over that 3-year period. The first 3-year agreement begins when the building opens. A wealthy alumnus (you one day) has agreed to donate enough at the building opening to cover the U&M expenses over the 30- year term. If money invested by the school's engineering foundation earns 6% interest compounded quarterly, how much must be donated. (Hint: Build a spreadsheet like the one below) Year 0 3 6 9 12 15 18 21 24 27 Cost Rate Cash Flow FERH $125,000 $ 125,000.00 Present Worth 6% $125,000 3 year U&M Contract Cost Annual Interest Rate…

A government was awarded a grant from another government. The $8,000,000 grant is restricted to use for construction of a facility for one of the grantee government's enterprise activities. The grant is for half the cost of the facility. The grantor will reimburse half of the costs as they are incurred. At the end of the first fiscal year, $3,000,000 has been spent on the project. $1,500,000 has been collected from the grantor. How should the grantee's Enterprise Fund statement of cash flows report the cash inflows?