A retailer is considering opening a new store as a business venture. The purchase price of the store will be $2 million and there will be a further investment required of $0.5 million six months after purchase. The store will open one year after purchase. Revenues less running costs are expected to occur continuously and will be $0.1 million in the first year of operation, $0.15 million in the second year of operation and thereafter increasing at yearly intervals by 2.0% per annum compound. Eight years after purchase, a major refit costing $0.8 million will be required. Twenty-one years after purchase, it is assumed that the store will be closed and sold for $6 million. The retailer requires a rate of return on its investment of 7.0% per annum effective. Which of the following is the accumulated profit the retailer will have made at the end of the term?     $867,113.1     $1,391,845.76     $1,468,794.21     $1,577,605.94     $1,696,537.16     $1,765,078.73     $1,941,735.44     $1,965,730.23     $1,973,357.33     $2,212,835.82

A company is considering buying a CNCmachine. In today’s dollars, it is estimated that themaintenance costs for the machine (paid at the endof each year) will be $25,000, $26,000, $28,000,$30,000, and $32,000 for years 1 to 5, respectively.The general inflation rate ( f ) is estimated to be5% per year, and the company will receive 13%return (interest) per year on its invested funds during the inflationary period. The company wants topay for maintenance expenses in equivalent equalpayments (in actual dollars) at the end of each ofthe five years. Find the amount of the company’spayments

Sauer Food Company has decided to buy a new computer system with an expected life of three years. The cost is $430,000. The company can borrow $430,000 for three years at 13 percent annual interest or for one year at 11 percent annual interest. Assume interest is paid in full at the end of each year. a. How much would Sauer Food Company save in interest over the three-year life of the computer system if the one-year loan is utilized and the loan is rolled over (reborrowed) each year at the same 11 percent rate? Compare this to the 13 percent three- year loan. 11 percent loan 13 percent loan Interest savings Interest b. What if interest rates on the 11 percent loan go up to 16 percent in year 2 and 19 percent in year 3? What would be the total interest cost compared to the 13 percent, three-year loan? Fixed-rate 13% loan Variable-rate loan Additional interest cost Interest

The initial purchase price of a new stamp press is $6,000. The firm will spend $5,000 on shipping and installation. Training of new employees will cost $2,000. As a result of the purchase, inventory must increase $1,300. What is the net initial cash flow? Round your answer to the nearest dollar. Tax rate is 40%. Sign your cash flows negative for outflows and positive for inflows.