TABLE 13.2Present value of an annuity of $1½%8%1%0.99012%0.98043%0.97094%0.96155%0.95241.85946%7%0.9434 0.9346 0.92599%10%11%12%0.9174 0.9091 0.9009 0.89290.99501.98511.9704 1.94161.91351.88612.97022.94102.88392.82862.77512.72323.95053.90203.80773.71713.62993.54591.7591 1.7355 1.7125 1.69012.5313 2.4869 2.4437 2.40183.2397 3.1699 3.1024 3.03733.8897 3.7908 3.6959 3.60484.4859 4.3553 4.2305 4.11144.92594.8534 4.71344.57974.45181.8334 1.8080 1.78332.6730 2.6243 2.57713.4651 3.3872 3.31214.1002 3.99274.62295.20645.74664.32954.21245.89645.79555.60145.41725.24215.07574.91734.76656.86216.7282 6.47206.23036.00215.78645.5824 5.38935.0330 4.86847.82307.65177.32557.0197 6.7327 6.46326.2098 5.97138.77918.56608.16227.7861 7.43537.10786.80176.51526.24694.7122 4.56385.5348 5.3349 5.1461 4.96765.9952 5.7590 5.5370 5.32826.4177 6.1446 5.8892 5.65026.80527.16078.98268.53028.11097.72177.36017.02366.71019.7304 9.471310.6770 10.3676 9.78689.25268.76058.30647.88697.49877.13906.4951 6.2065 5.93779.38518.86328.38387.94277.53616.8137 6.4924 6.19448.85278.35767.90387.4869 7.1034 6.7499 6.42359.29508.74558.24427.7862 7.3667 6.9819 6.62829.10798.55958.0607 7.6061 7.19096.810914.416615.33996.974016.25867.119611.6189 11.2551 10.5753 9.954012.5562 12.1337 11.3483 10.6350 9.9856 9.393613.4887 13.0037 12.1062 11.2961 10.5631 9.898613.8650 12.8492 11.9379 11.1184 10.3796 9.712214.7179 13.5777 12.5611 11.6523 10.8378 10.1059 9.4466 8.8514 8.3126 7.8237 7.379215.5622 14.2918 13.1661 12.1657 11.2741 10.4773 9.7632 9.1216 8.5436 8.0216 7.548816.3983 14.9920 13.7535 12.6593 11.6896 10.8276 10.0591 9.3719 8.7556 8.2014 7.701617.2260 15.6784 14.3238 13.1339 12.0853 11.1581 10.3356 9.6036 8.9501 8.3649 7.8393 7.365818.0455 16.3514 14.8775 13.5903 12.4622 11.4699 10.5940 9.8181 9.1285 8.5136 7.9633 7.469417.4131 15.6221 14.0939 12.7834 11.6536 10.6748 9.8226 9.0770 8.4217 7.843119.6004 17.2920 15.3724 13.7648 12.4090 11.2578 10.2737 9.4269 8.6938 8.055223.1148 19.7928 17.1591 15.0463 13.3317 11.9246 10.7574 9.7790 8.9511 8.243825.7298 21.4822 18.2559 15.7619 13.8007 12.2335 10.9617 9.9148 9.0417 8.304517.17287.249718.082418.987423.4457 22.0231 19.523427.7941 25.8077 22.396436.1723 32.8347 27.355444.1428 39.1961 31.4236Period123456789101112131415161718192025304050 Using the annuity table, complete the following. (Use Table 13.2;)Note: Do not round intermediate calculations. Round your answer to the nearest cent.Payment amount end of Frequency ofeach periodpaymentAnnually1,450Length of time7 yearsInterestrate9%PV of Annuity

Present value of annuity is the equivalent amount based on the future cash flow and interest rate…

esent value of an annuity of $1 ½/2% 0.9950 1.9851 2.9702 3.9505 4.9259 riod 1 2 3 4 5 6 7 8 9 10 11 1% 2% 3% 4% 5% 6% 7% 8% 0.9615 0.9524 0.9434 0.9346 0.9259 1.8861 1.8594 1.8334 1.8080 1.7833 0.9901 0.9804 0.9709 1.9704 1.9416 1.9135 2.8286 3.7171 3.6299 3.5459 2.9410 2.8839 2.7751 2.7232 2.6730 2.6243 2.5771 3.9020 3.8077 3.4651 3.3872 3.3121 4.8534 4.7134 4.5797 4.4518 4.3295 4.2124 4.1002 3.9927 5.8964 5.7955 5.6014 5.4172 5.0757 4.9173 4.7665 4.6229 5.2421 6.2303 6.0021 5.7864 6.8621 6.7282 6.4720 5.5824 5.3893 5.2064 7.8230 7.6517 7.0197 6.7327 6.4632 6.2098 5.9713 5.7466 7.3255 8.7791 8.5660 8.1622 6.8017 6.5152 6.2469 9.7304 7.7861 7.4353 7.1078 8.5302 8.1109 7.7217 8.7605 8.3064 7.3601 7.0236 6.7101 10.6770 9.2526 7.8869 7.4987 7.1390 8.8633 8.7938 7.5261 11 €190 9.4713 8.9826 10.3676 9.7868 11.9551 10 5752 0.05.10 0.2951 70137 9% 0.911 1.759 2.53 3.23 3.889 4.485 5.033 5.53- 5.99 6.41 6.80 7.16

esent value of an annuity of $1 ½/2% 0.9950 1.9851 2.9702 3.9505 4.9259 riod 1 2 3 4 5 6 7 8 9 10 11 1% 2% 3% 4% 5% 6% 7% 8% 0.9615 0.9524 0.9434 0.9346 0.9259 1.8861 1.8594 1.8334 1.8080 1.7833 0.9901 0.9804 0.9709 1.9704 1.9416 1.9135 2.8286 3.7171 3.6299 3.5459 2.9410 2.8839 2.7751 2.7232 2.6730 2.6243 2.5771 3.9020 3.8077 3.4651 3.3872 3.3121 4.8534 4.7134 4.5797 4.4518 4.3295 4.2124 4.1002 3.9927 5.8964 5.7955 5.6014 5.4172 5.0757 4.9173 4.7665 4.6229 5.2421 6.2303 6.0021 5.7864 6.8621 6.7282 6.4720 5.5824 5.3893 5.2064 7.8230 7.6517 7.0197 6.7327 6.4632 6.2098 5.9713 5.7466 7.3255 8.7791 8.5660 8.1622 6.8017 6.5152 6.2469 9.7304 7.7861 7.4353 7.1078 8.5302 8.1109 7.7217 8.7605 8.3064 7.3601 7.0236 6.7101 10.6770 9.2526 7.8869 7.4987 7.1390 8.8633 8.7938 7.5261 11 €190 9.4713 8.9826 10.3676 9.7868 11.9551 10 5752 0.05.10 0.2951 70137 9% 0.911 1.759 2.53 3.23 3.889 4.485 5.033 5.53- 5.99 6.41 6.80 7.16

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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MY 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.) %24
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…
Use the table below to answer the following questions: Period 4 567 8 9 10 11 Present Value of an Annuity of 1 4% Future Value of an Annuity of 1 5% 5% 8% 10% 4% 8% 10% 3.6299 3.5460 3.3121 3.1699 4.2465 4.3101 4.5061 4.6410 4.4518 4.3295 3.9927 3.7908 5.4163 5.5256 5.8666 6.1051 5.2421 5.0757 4.6229 4.3553 6.6330 6.8019 7.3359 7.7156 6.0021 5.7864 5.2064 4.8684 7.8983 8.1420 8.9228 9.4872 5.7466 5.3349 9.2142 9.5491 10.6366 11.4359 7.4353 7.1078 6.2469 5.7590 10.5828 11.0266 12.4876 13.5795 8.1109 7.7217 6.7101 6.1446 12.0061 12.5779 14.4866 15.9374 8.7605 8.3064 7.1390 6.4951 13.4864 14.2068 16.6455 18.5312 6.7327 6.4632 Bobby receives alimony payments every 6 months and the next payment is tomorrow. Median homes go for $950,000 and he wants to save $190,000 in 4 years. How much money should Bobby put away into an investment each time he receives alimony payments if he can get a 8% return a year? $35,593 O $31,624 O $23,131 O $46,262
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…
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…
Complete the following for the present value of an ordinary annuity. (Use Table 13.2.) (Do not round intermediate calculations. Round your answer to the nearest cent.) Amount of annuity expected Present value (amount needed now to invest to receive annuity) Interest Payment Time rate $ 900 Annually 4 years 6 %
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 = 4.8684
Present value of an Annuity of $1 in Arrears Periods 4% 6% 8% 10% 12% 14% 1 0.962 0.943 0.926 0.909 0.893 0.877 2 1.886 1.833 1.783 1.736 1.690 1.647 3 2.775 2.673 2.577 2.487 2.402 2.322 4 3.630 3.465 3.312 3.170 3.037 2.914 5 4.452 4.212 3.993 3.791 3.605 3.433 6 5.242 4.917 4.623 4.355 4.111 3.889 7 6.002 5.582 5.206 4.868 4.564 4.288 8 6.733 6.210 5.747 5.335 4.968 4.639 9 7.435 6.802 6.247 5.759 5.328 4.946 10 8.111 7.360 6.710 6.145 5.650 5.216 Lucas Company is considering a project with an initial investment of $530,250 in new equipment that will yield annual net cash flows of $95,000, and will be depreciated at $75,750 per year over its seven year life. What is the internal rate of return? a.6% b.14% c.10% d.12% e.8%
Use Table 12-1 to solve. Suppose a certain manufacturer deposits $7,000 at the beginning of each 3 month period for 8 years in an account paying 8% interest compounded quarterly. (Round your answers to the nearest cent.) (a) How much (in $) will be in the account at the end of the 8 year period? $ 315767 (b) What is the total amount (in $) of interest earned in this account? $ 91767
Grove 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
TABLE 13-1 Ordinary annuity table: Compound sum of an annuity of $1 Period 2% 5% 7% 8% 1.0000 1.0000 1.0000 1.0000 1.0000 1 1.0000 1.0000 2.0300 2.1200 2.1300 2 2.0200 3.3744 3.4069 3 3.0604 3.0909 4.7793 4.8498 6.3528 6.4803 8.3227 7 1.0000 1.0000 1.0000 1.0000 1.0000 2.0400 2.0500 2.0600 2.0700 2.0800 2.0900 2.1000 2.1100 3.1216 3.1525 3.1836 3.2149 3.2464 3.2781 3.3100 3.3421 4 4.1216 4.1836 4.2465 4.3101 4.3746 4.4399 4.5061 4.5731 4.6410 4.7097 5 5.2040 5.3091 5.4163 5.5256 5.6371 5.7507 5.8666 5.9847 6.1051 6.2278 6 6.3081 6.4684 6.6330 6.8019 6.9753 7.1533 7.3359 7.5233 7.7156 7.9129 8.1152 7.4343 7.6625 7.8983 8.1420 8.3938 8.6540 8.9228 9.2004 9.4872 9.7833 10.0890 10.4047 8 8.5829 8.8923 9.2142 9.5491 9.8975 10.2598 10.6366 11.0285 11.4359 11.8594 12.2997 12.7573 9 9.7546 10.1591 10.5828 11.0265 11.4913 11.9780 12.4876 13.0210 13.5795 14.1640 14.7757 15.4157 10 10.9497 11.4639 12.0061 12.5779 13.1808 13.8164 14.4866 15.1929 15.9374 16.7220 17.5487 18.4197 11 12.1687 12.8078…
City Hospital, a nonprofit organization, estimates that it can save $28,000 a year in cash operating costs for the next 10 years if it buys a special-purpose eye-testing machine at a cost of $110,000. No terminal disposal value is expected. City Hospital's required rate of return is 14%. Assume all cash flows occur at year-end except for initial investment amounts. City Hospital uses straight-line depreciation. Present Value of $1 table Present Value of Annuity of $1 table Future Value of $1 table Future Value of Annuity of $1 table Read the requirements. C Requirement 1. Calculate the following for the special-purpose eye-testing machine: a. Net present value (NPV) (Use factors to three decimal places, X.XXX, and use a minus sign or parentheses for a negative net present value. Enter the net present value of the investment rounded to the nearest whole dollar.) The net present value is Requirements 1. Calculate the following for the special-purpose eye-testing machine: a. Net present…

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