If the rate of earnings is 12% and the cash to be received in two years is $20,000, determine the present value amount, using the following partial table of present value of $1 at compound interest. Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636

If the rate of earnings is 12% and the cash to be received in two years is $20,000, determine the present value amount, using the following partial table of present value of $1 at compound interest. Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter11: Capital Budgeting Decisions

Section: Chapter Questions

Problem 8EA: You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how...

See similar textbooks

Related questions

Q: Given the following cash inflow at the end of each year what is the future value of this cash flow…

A: Calculation of future values: Answer: Future value at 6% is $235,916.61 Future value at 9% is…

Q: If interest is 5% compounded annually, calculate the present value of five year cash flows of $1,000…

A: The present value function or concept can be used to determine the present value of a future sum or…

Q: Suppose a principal of 2500 Rials accumulated to 4000 Rials over a period of 8 years. Determine the…

A: The interest rate can be calculated with the help of continuous compounding function

Q: A debt of RM3,000 will mature in three years’ time. Assuming that the money is worth 14% compounded…

A: Present value = Future value / ( 1 + Periodic interest rate )Number of periods

Q: Given the following cash inflow at the end of each year what is the future value of this cash flow…

A: The question is based on the concept of Future value

Q: determine the equivalent a. present worth at the beginning of the first year and b. uniform annual…

A: Net Present Value: It is the present worth of the annual cash flows and the initial cost of the…

Q: What is the present worth of the followingseries of payments?(a) $1,500 at the end of each year for…

A: A series of recurring fixed payments over a particular period of time is called as annuity. To…

Q: 12. If Php5,000 shall accumulate for 10 years at 8% compounded quarterly, find the compounded…

A: GIVEN ÷ Present Amount = Php 5000 Time period = 10 years Interest rate = 8% compounded quarterly…

Q: The present worth of the cash flow with payments in the second through seventh year for amount of…

A: Present value of cash flow in nth year [PV of CFn] = CF x (1 + r)-n Where, CF = cash flow of the…

Q: The cash flows shown in the table below occur every six months (bi-annually) and have a total…

A: Present value of annuity is the current value of the future payments that are calculated using the…

Q: If $25,000 is deposited in a 5% savings account and inflation is 3%, what is the value of the…

A: Given information : Deposited amount = $25,000 Interest rate on savings = 5% Inflation rate = 3%…

Q: 800

A: Formula to calculate the future value of ordinary annuity is: FV = C*[(1+I)^n - 1/i] Where C is the…

Q: If money is worth 12% compounded quarterly and n = 5, compute the present value of the following:…

A: The present value method is a discounted method of the time value of money. It determines the value…

Q: What is the present value of $17,000 deposited at the end of each year for 23 years earning 9.5%…

A: We need to compute the present value in this question using following details : Deposit at end of…

Q: 9 years of savings were made in a deposit account that pays 20% compound interest annually. The…

A: The future value of a deposit is calculated as the sum of present value and interest earned on the…

Q: What is the future equivalent at EOY 8 of $5,000 annual payments made at the beginning of each year…

A: Since you have asked multiple questions, we will solve the first question for you. Please ask…

Q: An amount of P100,00 is borrowed at 16% pa compounded quarterly. A partial payment of P40,000 is…

A: Loan amount (L) = P 100000 First payment (P1) = P 40000 after 4th quarter Second payment (P2) = P…

Q: The rate of earnings is 10% and the cash to be received in three years is $10,000. Determine the…

A: Income statement: The income statement is one of the three primary financial statements used to…

Q: Using the annuity formula find the total profit earned in the first 10 years where the company…

A: This is a case of a growing annuity. Hence we will use the formula of present value of growing…

Q: A principal of 2450 Rials is invested at rate 5.25% compounded quarterly. After how many years the…

A: Given in the Question Principal = 2450 Riyals Rate = 5.25% Compounded Quarterly

Q: After tax cash flows are 100,000 a year for 5 years. There is no terminal value. The payback period…

A: Initial Investment = cashflow per year × payback period =100000 × 3=…

Q: What is the present value of a $120,000 cash flow to be received at the beginning of each of the…

A: Amount of Cash flow = $120000 at the beginning of the year Years(n) = 20 Annual rate(r) = 9%…

Q: Suppose that a certain EOY (end of year) cash flows are expected to be $1,000 for the second year,…

A: End of year cash flows are those cash flows which are generated at the end of each year for an…

Q: A set of cash flows begins at $20,000 the first year, with an increase each year until n = 10 years.…

A: Information provided: Initial cashflow = $20,000 n = 10 years interest rate = 8% Present value =…

Q: The rate of earnings is 10% and the cash to be received in three years is $10,000. Determine the…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: Determine the present value of the following cash flows; P4,000 at the end of 4th month and every…

A: Given information= P4000 at the end of 4th month and every month thereafter till the 12th Month…

Q: annual cash flow f

A: Annual cash flows refer to the income of the company before deducting any interest, taxes,…

Q: Consider the following cash-flow sequence of returns (in thousands of dollars) at the end of the…

A: The question gives the following information:

Q: Using the tables provided, the present value of $13,265.00 (rounded to the nearest dollar) to be…

A: Introduction:- Present Value Factor is used to calculate a present value of all the future value to…

Q: Today $5000 is deposited in an account that earns 2.5% per quarter. Additional deposits are made at…

A: given, $5000 deposited at 2.5% per quarter for 20 years fv=$5000 x(F/P,2.5%,80) $100 deposited at…

Q: Given the following cash inflow at the end of each year what is the future value of this cash flow…

A: Time value of money: Time value of money refers to the concept that the value of money available at…

Q: Determine the present value amount, using the following partial table of present value of $1 at…

A: Present Value means the present worth of the amount receivable or payable in the future period.…

Q: The rate of earnings is 6% and the cash to be received in 4 years is $50,036. The present value…

A: The present value is calculated as future cash flows multiplied by the present value factor. The…

Q: What is the present worth of cash flows that begin at $10,000 and increase at 8% per year when N is…

A: The present value function or concept can be used to determine the present value of a future sum or…

Q: Consider an EOY geometric sequence of cash flows in which the first payment made was P2,000. This is…

A: Annuity refers to a constant stream of payments made at regular intervals for a defined period. The…

Q: A certain end of year cash flows are expected to be P 7,000.00 at the end of the 3rd year, P…

A: Present value: Present value is the future cash flow at a specific discount rate. The time value…

Q: JRT Publishers invests P100,000 today to be repaid in five years in one lump sum at 12% compounded…

A: Time value of money is a concept which states that the value of one unit of currency in today's time…

Q: A debt of RM3,000 will mature in three years’ time. Assuming that the money is worth 14% compounded…

A: Total debt = RM 3,000 Time period = 3 years Interest rate = 14%

Q: Given below are the future value factors for 1 at 11% for one to five periods. Interest is…

A: Option b is correct.

Q: How much must be deposited at 6% each year beginning on January 1, year 1, in order to accumulate…

A: This is the question related to compound interest and Future Amount. We use Principal , Interest and…

Q: What is the future value of a stream of $800 cash receipts, each to be received at the beginning of…

A: Given data; payment amount = $800 interest rate = 10% number of years = 4

Q: Find the P and F values of a certain transaction that has an interest of 12% per year and rate of…

A: Present value is the sum of money that must be invested in order to achieve a specific future goal.…

Q: What is the present worth of cash flows that begin at $10,000 and increase at 5% per year for 10…

A: Present value is the sum of money that must be invested in order to achieve a specific future goal.…

Concept explainers

Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.

Question

If the rate of earnings is 12% and the cash to be received in two years is $20,000, determine the present value amount, using the following partial table of present value of $1 at compound interest.

Year	6%	10%	12%
1	0.943	0.909	0.893
2	0.890	0.826	0.797
3	0.840	0.751	0.712
4	0.792	0.683	0.636

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1

VIEW

Step 2

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

You put $250 in the bank for S years at 12%. A. If interest is added at the end of the year, how much will you have in the bank after one year? Calculate the amount you will have in the bank at the end of year two and continue to calculate all the way to the end of the fifth year. B. Use the future value of $1 table in Appendix B and verity that your answer is correct.
The rate of earnings is 10% and the cash to be received in three years is $10,000. Determine the present value amount, using the following partial table of present value of $1 at compound interest: Year 69% 10% 1296 1.943 .909 .893 2.890 .826.797 3.840 .751 .712 4.792.683 .636 a. $8,260 b. $6,830 c. $7,510 d. $13,316
The rate of earnings is 12% and the cash to be received in 2 years is $29,617. Determine the present value amount, using the following partial table of present value of $1 at compound interest. (round to two decimal points). Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636 a.$26,447.98 b.$23,604.75 c.$24,463.64 d.$21,087.30
Using the following partial table of present value of $1 at compound interest, determine the present value of $25,000 to be received four years hence, with earnings at the rate of 10% a year. Year 6% 10% 12% 1 .943 .909 .893 2 .890 .826 .797 3 .840 .751 .712 4 .792 .683 .636 a.$22,725 b.$15,900 c.$17,075 d.$19,800
Assuming an interest rate of 6.3 percent, what is the value of the following cash flows four years from today? Year Cash Flow 1 $ 3,225 4,220 6,110 8,245 234 3 4 Multiple Choice O $24,538.06 $25,174.54 $22,446.85 $23,382.13 $23,901.57
For the cash flows shown, find the value of x that makes the equivalent annual worth in years 1 through 7 equal to $300 per year. Use an interest rate of 10% per year. Year Cash Flow, $ Year Cash Flow, $ 0 x 4 300 1 300 5 300 2 300 6 300 3 300 7 x
Consider the following sequence of year-end cash flows: EOY 1 3 Cash Flow $9,000 $14,000 $19,000 $24,000 $29.000 What is the uniform annual equivalent if the interest rate is 7% per year? Click the icon to view the interest and annuity table for discrete compounding when i=7% per year. Choose the correct answer below. O A. $18,325 O B. $19,000 O C. $14,636 O D. $20,425 O E. $9,325
For the cash flow revenues shown below, find the value of G that makes the equivalent annual worth in years 1 through 7 equal to $500. The interest rate is 6.00% per year. (Round the final answer to three decimal places.) Cash flow, $ Year 0 1 2 3 The value of G is $ 225.0 225.0+ G 225.0+2G Year 4 5 16 Cash flow, $ 225.0+36 225.0+4G 225.0+5G 225.0+66
If an initial investment of $1,000 is invested at 8% interest per year with semi-annual compounding, how much would be in the account after five years? A. $1,081.60 B. $1,061.66 C. $1,051.00 D. $1,281.60 The difference between the present and future worth of money at some time in the future is called A. Discount B. Deduction C. Inflation D. Depletion
Consider each of the following deposit cash flow series. What will the final balance be (e.g., future equivalent value) after the final deposit? Assume the account earns 10% interest compounded annually. a) b) Year Cash Flow/$ Year Cash Flow/$ 0 25 0 35 1 50 1 60 2 75 2 75 3 100 3 110 4 125 4 135 5 150 5 160
The table below shows a series of cashflows. At an interest rate of 10% per year, what are the series of payments equivalent to at time "0"? Year 1 End of year payment $ 1,100 $ $6,243 $6,664 $6,048 $5,300 $8,850 2 1,250 $ 3 4 1,400 $1,550 $ 5 6 1,700 $ 1,850
The rate of earnings is 6% and the cash to be received in 4 years is $50,036. The present value amount, using the following partial table of present value of $1 at compound interest is (round to two decimal points). Year 6% 10% 12% 1 0.943 0.909 0.893 2 0.890 0.826 0.797 3 0.840 0.751 0.712 4 0.792 0.683 0.636