Domebo Corporation has entered into a 8 year lease for a piece of equipment. The annual payment under the lease will be $3,200, with payments being made at the beginning of each year. If the discount rate is 14%, the present value of the lease payments is closest to (Ignore income taxes.): Click here to view Exhibit 14B-1 and Exhibit 14B-2, to determine the appropriate discount factor(s) using the tables provided. (Round your intermediate calculations to 3 decimal places.)
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- Exhibit 1-B Future value (compounded sum) of $1 paid in at the end of each period for a given number of time periods (an annuity) 1% 3% 1.000 2.030 Period 2% 4% 5% 6% 7% 8% 9% 10% 11% 1 1.000 2.020 3.060 4.122 5.204 6.308 7.434 1.000 2.040 3.122 1.000 2.050 3.153 1.000 1.000 1.000 1.000 1.000 1.000 1.000 2.010 3.030 2.070 3.215 4.440 5.751 2.090 3.278 4.573 5.985 2.100 3.310 4.641 6.105 7.716 9.487 2.110 3.342 4.710 6.228 7.913 2.060 2.080 3 3.184 4.375 3.091 3.246 4.184 5.309 6.468 7.662 4 4.060 4.246 4.310 4.506 5.101 5.416 6.633 7.898 9.214 10.583 12.006 13.486 15.026 16.627 18.292 20.024 21.825 23.698 25.645 27.671 29.778 41.646 56.085 5.526 5.637 5.867 6.975 8.394 7.336 8.923 6.152 6.802 7.153 7.523 7 7.214 8.142 8.654 9.200 9.783 8.583 11.028 13.021 15.193 17.560 20.141 22.953 8.286 10.260 11.436 13.579 11.859 14.164 16.722 8. 8.892 9.549 9.897 10.637 9.369 9.755 10.159 11.027 11.491 11.978 12.488 12.578 14.207 10 10.462 10.950 11.464 13.181 13.816 14.487 15.937 12.169 13.412…Tran Lee plans to set aside $2,200 a year for the next six years, earning 8 percent. What would be the future value of this savings amount? Use Exhibit 1-B. (Round time value factor to 3 decimal places and final answer to 2 decimal places.) Future valueests - X þver Reference Reference Present Value of Ordinary Annuity of $1 Present Value of $1 Periods Period 1 Period 2 Period 3 Period 4 Period 5 Period 6 Period 7 Period 8 Period 9 Period 10 0.905 0.820 | 0.744 0.676 0.614 | 0.558 0.508 Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% us Period 1 Period 2 Period 3 Period 4 Period 5 0.935 0.952 0.943 0.935 1.859 1.833 1.808 0.926 0.917 0.909 0.893 0.877 0.870 1.783 1.759 1.736 2.577 2.531 2.487 0.990 0.990 0.980 0.971 0.962 | 0.952 0.980 0.961 0.943 0.925 0.907 0.971 0.942 0.915 0.889 0.864 0.961 0.924 0.888 0.855 0.823 0.951 0.906 0.863 0.822 0.784 0.943 0.917 0.909 0.893 | 0.877 0.842 0.826 0.797 0.769 0.772 0.751 0.712 0.675 0.658 | 0.641 0.708 0.683 0.636 | 0.592 0.572 0.552 0.516 0.482 0.650 0.621 0.567 0.980 0.971 0.962 0.862 0.847 0.833 0.926 0.862 0.847 0.833 1.566 | 1.528 2.174 2.106 3.717 3.630 3.546 3.465 3.387 3.312 3.240 3.170 3.037 2.914 2.855 2.798…
- TABLE 9C.2 Present Value of Annuity of $1, p = [1-1/(1+]/i 3.25% 3.5% 1 2 3 4 5 6 7 6.5982 6.5346 8 7.4859 7.4051 7.4051 7.3255 7.2472 9 8.3605 8.2605 8.1622 8.0657 9.2222 9.1012 8.9826 8.8662 10 11 12 13 14 15 Periods 1.5% 1.75% 2% 2.25% 2.5% 2.75% 3% 0.9852 0.9828 0.9804 0.9780 0.9756 0.9732 0.9709 0.9685 0.9662 1.9559 1.9487 1.9416 1.9345 1.9274 1.9204 1.9135 1.9066 1.8997 2.9122 2.8980 2.8839 2.8699 2.8560 2.8423 2.8286 2.8151 2.8016 3.8544 3.8309 3.8077 3.7847 3.7620 3.7394 3.7171 3.6950 3.6731 4.7826 4.7479 4.7135 4.6795 4.6458 4.6126 4.5797 4.5472 4.5151 5.6972 5.6490 5.6014 5.5545 5.5081 5.4624 5.4172 5.3726 5.3286 6.4720 6.4102 6.3494 6.2894 6.2303 6.1720 6.1145 7.1701 7.0943 7.0197 6.9462 6.8740 7.9709 7.8777 7.7861 7.6961 7.6077 8.7521 8.6401 8.5302 8.4224 8.3166 10.0711 9.9275 9.7868 9.6491 9.5142 9.3821 9.2526 9.1258 9.0016 10.9075 10.7395 10.5753 10.4148 10.2578 10.1042 9.9540 9.8071 9.6633 11.7315 11.5376 11.3484 11.1636 10.9832 10.8070 10.6350 10.4669 10.3027 12.5434…Tait is entering high school and is determined to save money for college. Tait feels he can save $2,500 each year for the next four years from his part-time job. If Tait is able to invest at 6%, how much will he have when he starts college? (Click the icon to view Present Value of $1 table.) E (Click the icon to view Present Value of Ordinary Annuity of $1 table.) (Click the icon to view Future Value of $1 table.) E (Click the icon to view Future Value of Ordinary Annuity of $1 table.) - X Reference (Round your answer to the nearest dollar.) Reference When Tait starts college he will have Present Value of $1 Periods Period 1 Period 2 Period 3 Period 4 Period 5 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18% 20% Future Value of $1 0.990 0.980 0.971 0.962 0.952 0.943 0.980 0.961 0.943 0.925 0.907 0.971 0.942 0.915 0.889 0.864 0.840 0.961 0.924 0.888 0.855 0.823 0.792 0.951 0.906 0.863 0.822 0.784 0.747 0.917 0.909 0.893 | 0.877 0.870 0.862 0.847 0.833 0.826 0.797 0.769 0.756 0.743…Exhibit A.9 Present Value of an Annuity of $1 Year 1/2% 1% 2% 4% 5% 6% 8% 10% 12% 14% 15% 16% 18% 20% 22% 24% 25% 30% 35% 40% 1 0.995 0.990 0.980 0.962 0.952 0.943 0.926 0.909 0.893 0.877 0.870 0.862 0.847 0.833 0.820 0.806 0.800 0.769 0.741 0.714 2 1.985 1.970 1.942 1.886 1.859 1.833 1.783 1.736 1.690 1.647 1.626 1.605 1.566 1.528 1.492 1.457 1.440 1.361 1.289 1.224 3 2.970 2.941 2.884 2.775 2.723 2.673 2.577 2.487 2.402 2.322 2.283 2.246 2.174 2.106 2.042 1.981 1.952 1.816 1.696 1.589 4 3.950 3.902 3.808 3.630 3.546 3.465 3.312 3.170 3.037 2.914 2.855 2.798 2.690 2.589 2.494 2.404 2.362 2.166 1.997 1.849 5 4.926 4.853 4.713 4.452 4.329 4.212 3.993 3.791 3.605 3.433 3.352 3.274 3.127 2.991 2.864 2.745 2.689 2.436 2.220 2.035 6 5.896 5.795 5.601 5.242 5.076 4.917 4.623 4.355 4.111 3.889 3.784 3.685 3.498 3.326 3.167 3.020 2.951 2.643 2.385 2.168 7 6.862 6.728 6.472 6.002 5.786 5.582 5.206 4.868 4.564 4.288 4.160 4.039 3.812 3.605 3.416 3.242 3.161 2.802 2.508 2.263…
- Appendix 9.1 – Period 7 at 10%Present value of $1 received in n periods= 0.5132 Appendix 9.2- Period 4 at 14% Present value of an annuity of $1 per period = 4.8684MY NOTES ASK YOUR TEACHER Solve by using tables Table 12-1 and Table 12-2. Paul and Donna Kelsch are planning a Mediterranean cruise in 3 years and will need $6,500 for the trip. They decide to set up a "sinking fund" savings account for the vacation. They intend to make regular payments at the end of each 3 month period into the account that pays 6% interest compounded quarterly. What periodic sinking fund payment (in $) will allow them to achieve their vacation goal? (Round your answer to the nearest cent.) %24Grove Media plans to acquire production equipment for $845,000 that will be depreciated for tax purposes as follows: year 1, $329,000; year 2, $189,000; and in each of years 3 through 5, $109,000 per year. A 10 percent discount rate is appropriate for this asset, and the company's tax rate is 20 percent. Use Exhibit A.8 and Exhibit A.9. Required: a. Compute the present value of the tax shield resulting from depreciation. b. Compute the present value of the tax shield from depreciation assuming straight-line depreciation ($169,000 per year). Complete this question by entering your answers in the tabs below. Required A Required B Compute the present value of the tax shield resulting from depreciation. Note: Round PV factor to 3 decimal places. Present value of the tax shield
- Appendix D Present value of an annuity of $1, PVA Period -NM in D 1 2 3 4 5 6 7 8 9 12 13 15 16 18 19 20 25 30 40 50 PUINDING FAMIGOs 19 0.990 1.970 2.941 3.902 4.853 5.795 6.728 7.652 8.566 9.471 10.368 11.255 12.134 13.004 13.865 14.718 15.562 16.398 17.226 18.046 22.023 25.808 32.835 39.196 2% 0.980 1.942 2.884 3.808 4.713 5.601 6.472 7.325 8.162 8.983 9.787 10.575 11.348 12.106 12.849 13.578 14.292 14.992 15.678 16.351 19.523 22.396 27.355 31.424 3% 0.971 1.913 2.829 3.717 4.580 5.417 6.230 7.020 7.786 8.530 9.253 9.954 10.635 11.296 11.938 12.561 13.166 13.754 14.324 14.877 17.413 19.600 23.115 25.730 PVA-A 1 4% 0.962 1.886 2.775 3.630 4.452 5.242 6.002 6.79.3 8.111 8.760 9.385 9.986 10.563 11.118 11.652 12.166 12.659 13.134 13.590 15.622 17.292 19.793 21.482 1 (1 + )" 5% 0.952 1.859 2.723 3.546 4.329 5.076 5.786 6.463 7.108 7.722 8.306 8.863 9.394 9.899 10.380 10.838 11.274 11.690 12.085 12.462 14.094 15.372 17.159 18.256 Percent 0.943 1.833 2673 3.465 4.212 4.917 5.582 6.210…Net Present Value Method for a Service Company Opulence Corporation has recently placed into service some of the largest cruise ships in the world. One of these ships, the Bellwether, can hold up to 3,200 passengers and it can cost $640 million to build. Assume the following additional information: There will be 300 cruise days per year operated at a full capacity of 3,200 passengers. • The variable expenses per passenger are estimated to be $95 per cruise day. The revenue per passenger is expected to be $475 per cruise day. The fixed expenses for running the ship, other than depreciation, are estimated to be $94,848,000 per year. • The ship has a service life of 10 years, with a residual value of $100,000,000 at the end of 10 years. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7…On January 1, 2020, Everly Bottle Company sold $3,000,000 in long-term bonds. The bonds will mature in 5 years and have a stated interest rate of 8% and a yield rate of 10%. The bonds pay interest July 1 and January 1 of each year. The bonds are to be accounted for under the effective-interest method. Instructions: 1. Calculate the bond proceeds using the attached present value tables. 2. Prepare a Bond Discount/Premium Amortization Schedule. 3. Prepare the journal entry to record the bonds on the date of issue, January 1, 2020. 4. Prepare the journal entry to record the first payment and amortization of the discount/premium on July 1, 2020. 5. Prepare the journal entry to record the accrued interest and amortization of the discount/premium on December 31, 2020. 6. Prepare the journal entry to record the payment of the bonds at maturity; January 1, 2025. Assume the appropriate accrual was made on December 31, 2024 (see 5. above)