The owner of a downtown parking lot has employed a civil engineering consulting firm to advise him on the economic feasibility of constructing an office building on the site. Betty Samuels, a newly hired civil engineer, has been assigned to make the analysis. She has assembled the following data: Total Net Annual Total Investment* Alternative Revenue Sell parking lot Keep parking lot $ $ 200,000 22,000 Build 1-story building 400,000 60,000 Build 2-story building 555,000 72,000 Build 3-story building 750,000 100,000 1: 075 0 00 105 0 00
Q: interest is 6 percent and the expected retun on the market is 11 percent. What is the market risk pr...
A: Market risk premium is the difference between expected return from market and risk free rate. Market...
Q: project requires $ 80,000 end produces a A on Pnitial out lay of return of $20,000 end of year 1 , $...
A: Initial outlay (CF0) = $80,000 Year 1 cash inflow (CF1) = $20,000 Year 2 cash inflow (CF2) = $30,000...
Q: How much less is a perpetuity of $2,000 worth than an annuity due of the same amount for 30 payments...
A: An annuity is a series of monetary payments. A perpetuity is a sort of annuity that lasts indefinite...
Q: An annuity due typically has a higher present value than an ordinary annuity. • True O False
A: Since you have posted a question with multiple questions, we will solve the first question for you. ...
Q: Consider a one-year discount bond that has a present value of P1,500. If the rate of discount is 4 p...
A: Present value (PV) = P1500 Discount rate (r) = 4% Period (n) = 1 Year
Q: A stock is expected to pay a $6.00 dividend next year, and the dividend is projected to continue gro...
A: According to dividend discount modelP0 =D1Ke-gWhere,P0 = current price = To be calculatedD1 = Expect...
Q: A fund is to provide an annual scholarship at P4,000.00 for the first 5 years; P6,000.00 for the nex...
A: Hi There, Thanks for posting the questions. As per our Q&A guidelines, must be answered only one...
Q: Use -to determine the regular payment amount, rounded to the nearest dollar. Consider the following ...
A: Mortgage A Mortgage B Loan Amount $ 1,65,000.00 $ ...
Q: Bond Prices and Interest Rate Changes A 7 percent coupon bond with 8 years left to maturity is price...
A: The current price of the bond is equal to the present value of all its future payments discounted at...
Q: 2. It is estimated that a stand of timber will net P 25,000 a year for the next 10 years and that th...
A: Annual cash inflow (P) = P25000 Interest rate (r) = 6% Salvage value (SV) = P15000 Period (n) = 10 Y...
Q: At an annual rate of 6% which is the average yield of PAG-IBIG MP2, what is the future worth of P 10...
A: Annual rate (r) = 6% n = 4 years Present worth (P) = P 100
Q: The current risk-free rate is 3 percent and the market risk premium is 5 percent. You are trying to ...
A: Fist we need to calculate expected rate of return by using CAPM equation rs =Rf +Beta(Rm-Rf) where r...
Q: Strategic Workforce Planning at Dutch Railway Infrastructure Manager- ProRail Traffic Control Dutch...
A: Treasury managers typically monitor the financial condition of an organization and help ensure the c...
Q: Describe the potential costs and benefits of LBOs?
A: LBO is the acquisition method where the company used to use the borrowed money in order to acquire t...
Q: Find the mean of Terry's stock, giving the following information? Year Return 2011 22% 2012 -8% 2013...
A: Here, To Find: Mean =?
Q: 2.Brian invests $15,500, at 6% interest, compounded semiannually for 2 years. Manually calculate the...
A: Investment (PV) = $15500 Interest rate = 6% Semi annual rate (r) = 6%/2 = 3% Period = 2 Years Semi a...
Q: ABC Corp has an average inventory period (production process time + time before sale) of 36 days. Ac...
A: An operating cycle is the amount of time it takes for a firm from getting the production started to ...
Q: You have just retired with savings of $4 million. If you expect to live for 34 years and to earn 13%...
A: This is the case of an annuity due. This is because money is being spend at the start of each year.
Q: Compute the rate of return.
A: The rate of return refers to the amount earned on the investment made by the investor. It is helpful...
Q: What is the project's NPV?
A: Net Present Value: It represents the measure of the profitability of a project or investment in dol...
Q: Cost of commercial paper Commercial paper is usually sold at a discount. Fan Corporation has just so...
A: commercial paper is the short-term money market instrument that is issued by the company to meet its...
Q: One of the best examples of a zero-coupon bond is?
A: In finance zero coupon bonds are an important debt instrument used by companies as well as by govern...
Q: Your firm is contemplating the purchase of a new $595,000 computer-based order entry system. The sys...
A: Here, Initial Investment is $595,000 Salvage Value of is $81,000 Savings before taxes every year is ...
Q: A project requires an initial outlay of $80000 and produces a return of $20000 at the end of year 1,...
A: Solution:- Internal Rate of Return (IRR) means the rate at return the project is yielding. At IRR, N...
Q: If Going Merry Inc. has a net income of P 200,000 and a net sales of P 5,050,000 during 2020; and a ...
A: Year Net income Net sales 2020 200000 5050000 2021 225000 7000000
Q: b. A farmer is considering replacing a labor-intensive machine system with a more capital- intensive...
A: The initial investment and incremental cash flows: The initial investment in a project involves all ...
Q: The parents of a newborn have decided to make deposits into an investment account on each of their s...
A: Formula Present value = P*[1-(1+g)n*(1+r)-n]/(r-g) Where P - First payment i.e. $2500 g - Annual gro...
Q: Red Company invested $20,000 in a fund that was earning interest at a rate of 3.00% compounded semi-...
A: Answer a:- The future value of an investment is calculated using the following formula:- Future valu...
Q: On January 2, 2021, Santos Company invested in a 4-year, 10% bond with face value of P6,000,000 in w...
A: The question has 2 parts: 1. The investment designated as an investment at amortized cost on the dat...
Q: 5. Patterson Co. is considering a project that has the following cash flow cost of capital (r) data....
A: Net present value is the difference between the present value of cash flow and the initial investmen...
Q: Flounder Company's net income for 2020 is $672,000, and 91.000 shares of common stock were issued an...
A: The diluted earning per share is used to measure a company's earning per share by assuming that all ...
Q: ou purchase a house for $250,000 by getting a mortgage for $200,000 and paying a $50,000 down paymen...
A: Loan amount (PV) = $200,000 Interest rate = 4% Monthly interest rate (r) = 4%/12 = 0.33333333333% Pe...
Q: "If Treasury bills are currently paying 4.6 percent and the inflation rate is 1.9 percent, what is t...
A: Nominal rate = 4.6% Inflation rate = 1.9%
Q: Sheldon is going to enroll in a flexible spending account (FSA). In order to decide how much to cont...
A: The savings amount which is specifically made by individually to meet their healthcare expenses is c...
Q: Assume Merck (MRK) just finished paying an annual dividend of $2.1 (for 2019). You look up their bet...
A: GivenRisk free rate = rf =1.96%Beta=B=0.34Dividend=D=$2.1Market risk premium= rm-rf =9.9%Stock price...
Q: Find the monthly house payments nessary to amortize the following loan. Find total payments and tota...
A: Loan amount (PV) = 198000 Interest rate = 6.94% Monthly interest rate (i) = 6.94%/12 = 0.57833333333...
Q: The market compensates investors for accepting which type(s) of risk? O None of the listed selection...
A: Risk refers to the level of uncertainty in returns that an investor expects while making investments...
Q: urvivorship
A: A life insurance policy refers to the contract between a person and the insurance company. An insu...
Q: Calculate the total amount paid for Mortgage A. Calculate the total interest paid for Mortgage A. Ca...
A: Home loan mortgages are paid on a monthly basis. During the initial years interest amounts are hig...
Q: Consider a fixed-payment security that pays P100 at the end of every year fo the three years. If the...
A: Present value of bond can be calculated by using this equation Present value =C1/(1+r) +C2/(1+r)2 +C...
Q: Hastings Entertainment has a beta of 0.65. If the market return is expected to be 11 percent and the...
A: Required rate of return of stock can be found from the CAPM model using risk free rate and market ri...
Q: A corporation decides to deposit fixed payment per account earning 9% interest per year in order to ...
A: Compound interest is the interest that is charged on the principal amount as well as interest amount...
Q: You win a structured settlement in a lawsuit. Assume that the settlement pays $30,000 per year for ...
A: Periodic Payment = $30,000 Time Period = 25 Years Discount Rate = 7%
Q: If an investor buys shares in a no-load mutual fund for $33 and after eight years the shares appreci...
A: Mutual funds refer to one type of financial vehicle that pools money from many investors and invests...
Q: 1. What are the annual net cash inflows that will be provided by the new dipping machine? 2. Compute...
A: Companies invest only in those machines and projects are profitable. To evaluate the profitability o...
Q: Suppose à priñčipal Generate a table of the corresponding effective interest rates. (ruond to 3 deci...
A: Effective interest rate is the interest rate considering the impact of the compounding on the intere...
Q: A 5-year project will require an investment of $100 million. This comprises of plant and machinery w...
A: Since you have posted a question with more than three sub-parts, we will solve the first three sub-p...
Q: what would be the total return of the bond in percent? (Assume interest payments are semi-annual.)
A: Bond valuation refers to a method which is used to compute the current value or present value (PV) o...
Q: What is the standard deviation of Ava's stock, giving the following information: Year
A: Standard Deviation: It is a measure of statistics and measures the dispersion of the data relative ...
Q: At the end of one year, Angelique had $8,456 in her HSA. This year, she has used 75% of that amount ...
A: The savings amount which is specifically maintained by individually to meet their high healthcare de...
Solve wi
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 3 images
- The Flintstone Construction Company delivers dirt and stone from local quarries to its construction sites. A new truck that was purchased for a cost of $122,000 at the beginning of the year was expected to deliver 122,000 tons over its useful life. The following is a breakdown of the tons delivered during the year to each construction site: Construction Sites: Tons Delivered: Multiple Choice $12,767 $1,400 A 1,400 How much truck depreciation should be allocated to Site A? (Do not round intermediate calculations. Round your answer to the nearest dollar.) $1,220 B 2,900 None of the answers are correct. с 3,400 D 900For each of the following expenditures, indicate the type of account (asset or expense) in which the expenditure should be recorded. a530.000 annual cost of routine repair and maintenance expenditures for a fleet of delivery vehides b. $12.000,000 cost to develop a coal mine, from which an estimated 1 million tons of coal can be edracted e$248,000 cost to replace the roof on a building d. $140,000 cost of a radio and television advertising campaign to introduce a new product line. e58.000 cost of grading and leveling land so that a building can be constructed.During the year ended 31 December 20X1, Bougs Co built an extension to its head office. Associated costs are as follows: Land acquisition Fees for environmental certifications and building permits Sm 20 X3 X4 Architect and engineer fees Construction material and labour costs X5 At 30 September 20X1, this head office extension became available for use. At that date, the total borrowing costs incurred on a loan which was used specifically to finance this head office extension amounted to $1.6 million. Since construction costs are gradually eliminated according to the construction progress, there is a temporary income from the above loan of $0.3 million during the construction period.
- A city has purchased a new asphalt paving machine for $300,000.The city comptroller states that the machine will be depreciatedusing a stright line method. At the end of 8 years, the machinewill be sold with an expected salvage value of 60,000.a. Determine the function V = f(t) which expresses the bookvalue of the machine V as a function of its age t.b. What is the book value expected to be when the machine is 6years old?The Flintstone Construction Company delivers dirt and stone from local quarries to its construction sites. A new truck that was purchased for a cost of $119,000 at the beginning of the year was expected to deliver 202,000 tons over its useful life. The following is a breakdown of the tons delivered during the year to each construction site: Construction Sites: Multiple Choice C $17,144 Tons Delivered: How much truck depreciation should be allocated to Site A? Note: Do not round Intermediate calculations. Round your answer to the nearest dollar. $1,296 $1,190 A 2,200 None of the answers are correct. B 3,700 C 4, 200 D 1,700Marjorie Company commenced operations at the beginning of the current year. The following costs are incurred by the entity: Payment for land Taxes in arrears on building on land Demolition of current building on land, net of salvage of P10,000 1,000,000 40,000 100,000 Survey before construction of new building Contract price for factory building 60,000 5,000,000 Architect fee 230,000 Payment to city hall for approval of building construction 120,000 Safety fence around construction site Safety inspection on building 35,000 30,000 20,000 Removal of safety fence after completion of factory building New fence surrounding the factory Driveways, parking bays and safety lighting Cost of trees, shrubs and other landscaping 80,000 550,000 250,000 The land and factory building should respectively be measured at
- Martini Company incurred the following costs in purchasing a land as a factory site:Purchase price 2,400,000Cost of tearing down old building 240,000Legal fee for title investigation 15,000Title insurance 10,000 Architect fee 125,000Liability insurance during construction 25,000Excavation cost 40,000Payment to building contractor 8,800,000Special assessment by city for public improvement 30,000Interest cost during construction 300,000 What is the cost of the building?Six sites have been identified for a parking lot in downtown Blacksburg. Because the sites are plots of land, their salvage value and investment cost are identical. A 10-year study period has been specified, and the MARR is 17% per year. Which site should be chosen based on the IRR criterion? Click the icon to view the alternatives description More Info Investment cost (thousands) Annual revenue minus expense (thousands) IRR on total investment A $120 $17 14.2% B $170 $39.5 23.2% C $280 $52 18.6% Print Done D $420 $84.5 20.1% E $520 $104,5 20.1% $650 $138.5 21.3% - XThe following annual costs are associated with three new extruder machines being considered for use in a Styrofoam cup plant: Data X-TRUD SUPR-X Useful Life, Years 11 |13 17 First Cost $2,790,000 $3,000,000 $2,980,000 Salvage Value $100,000 $81,000 $93,000 Annual Benefit $265,000 $692,000 $699,000 M&O $62,000 $60,000 $56,000 M&O Gradient $15,500 $10,500 $14,000 The company's interest rate (MARR) is 6%. Which extruder should the Styrofoam company choose? Use Annual Cash Flow Analysis and provide the right reason. Choosing SUPR-X is best because it has the highest Annual Benefit Choosing SUPR-X will maximize the EUAB-EAUC; its value is $41,738 higher than X and $15,242 higher than X-TRUD. Choosing SUPR-X is best because it has the lowest M&O cost in yr1 Choosing SUPR-X will maximize the EUAB-EAUC; its value is $481,738 higher than X and $26,242 higher than X-TRUD.
- On January 6, Year 1, Mount Jackson Corporation purchased a tract of land for a factory site for $845,000. An existing building on the site was demolished and the new factory was completed on October 11, Year 1. Additional cost data are shown below: Construction cost of new building $ 1,032,000 Real estate and attorney fees Architect fees Cost to demolish old building Salvage recovery from old building What is the capitalized cost of the new building? O $1,205,900 O $1,120,000 O $1,105,000 O $1,184,900 21,000 88,000 79,900 (15,000)Mix ‘Em Up engages in research to develop cures for famous diseases. Costs incurred during development of one such project are as shown below: Researchers’ wages $10,000 Materials used in research 5,000 Machinery used in research 700 Registration of product discovered 1,950 Attorney’s fees for registration 3,000 Record the journal entry for these items. Assume we credit Cash. 8-9a. Disposal of asset. Sellem, Inc. is disposing of office furniture it has had for 2 ½ years. The cost of the furniture was $10,000, and Sellem estimated the salvage to be $2,000. A four-year life was expected. Journalize the sale of the machine for $7,500.Required information [The following information applies to the questions displayed below.] University Car Wash built a deluxe car wash across the street from campus. The new machines cost $264,000 including installation. The company estimates that the equipment will have a residual value of $25,500. University Car Wash also estimates it will use the machine for six years or about 12,500 total hours. Actual use per year was as follows: Year L234inc 5 6 "Hours Used 2,900 1,300 1,400 2,600 2,400 1,900 Prepare a depreciation schedule for six years using the double-declining-balance method. (Do not round your intermediate culations 1 13 A Next