Period/Rate 10 11 12 13 Knowledge Check 01 Clean Tel, Incorporated is considering investing in an 11-year project with annual cash inflows of $1,000,000. These cash inflows have an initial investment of $7,139,000. At what discount rate would this present value be the same as the initial investment? 6% -7% Present Value of Ordinary Annuity 7% 5% 6% 8% 9% 7.7217 7.3601 7.0236 6.7101 6.4177 7.8869 7.4987 7.1390 6.8052 8.3838 7.9427 7.5361 7.1607 8.8527 8.3577 7.9038 7.4869 8.3064 8.8633 9.3936 Ⓒ9% 8%

Incorrect Question 13 Suppose you invest $2,500 in a fund earning 15% simple interest. Further suppose that you have the option at any time of closing this account and opening an account earning compound interest at an annual effective interest rate of 9%. At what instant should you do so in order to maximize your accumulation at the end of five years? (Round your answer to two decimal places.) 4.53 years How about if you wish to maximize the accumulation at the end of ten years? (Round your answer to two decimal places.) 4.53 years

Chapter 10 Discussion Q1 A property is sold for $200,000. Typical financing terms are an 85 percent loan with a 10 percent interest rate over 15 years. If the gross income per year is $30,000, what is the overall capitalization rate?

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Question 9 of 13 How much would a business have to invest in a high-growth fund to receive $24,000 every month for 5 years, receiving the first payment 4 years from now. The investment earns interest at 7.25% compounded monthly. 2$ Round to the nearest cent

int rences 8 00 Gook Suppose you are 35 and have a $90,000 face amount, 15-year, limited-payment, participating policy (dividends will be used to build up the cash value of the policy). Your annual premium is $810. The cash value of the policy is expected to be $3,600 in 15 years. Using time value of money and assuming you could invest your money elsewhere for a 8 percent annual yield, calculate the net cost of insurance. Use (Exhibit 1-A, Exhibit 1-B, Exhibit 1-C, Exhibit 1-D) Note: Use appropriate factor(s) from the tables provided. Do not round intermediate calculations. Round time value factor to 3 decimal places and final answer to the nearest whole number. Net cost of insurance D

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Previous Problem Problem List Next Problem HW 20 Simple and Compound Interest: Problem 7 (3 points) Find the total amount of money accumulated for an initial investment $1,050 at 8% compounded quarterly after 10 years. Amount: Preview My Answers Submit Answers You have attempted this problem 0 times. You have unlimited attempts remaining.

9. Problem 12.17 (Equivalent Annual Annuity) eBook A firm has two mutually exclusive investment projects to evaluate. The projects have the following cash flows: TimeAfter-tax Cash Flow XAfter-tax Cash Flow Y -$80,000 -$80,000 40,000 30,000 55,000 30,000 60,000 D 1 2 3 4 5 30,000 30,000 5,000 Projects X and Y are equally risky and may be repeated indefinitely. If the firm's WACC is 15%, what is the EAA of the project that adds the most value to the firm? Do not round intermediate calculations. Round your answer to the nearest dollar. Choose Project -Select , whose EAA-S