Managerial Accounting (5th Edition)
5th Edition
ISBN: 9780134128528
Author: Karen W. Braun, Wendy M. Tietz
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Question
Chapter 12, Problem 12.9SE
a.
To determine
The total present value of the cash flows received over the five-year period for $1.
b.
To determine
Whether characterization of this stream of cash flows as an annuity can be done with reasons.
c.
To determine
The present value of the $1 stream of cash flows using annuity table.
To conclude: The difference between present value and annuity value of stream of cash flows by comparision.
d.
To determine
To explain: The finding of difference between present value and annuity present value of stream of cash flows.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
At a rate of 5.5%, what is the present value of the following cash flow stream?
Years
1.
2
3
Cash Flows
$0
$750
$600
$500
$400
Show your work in Excel and highlight your answer to this question.
Your excel file will be submitted at the end of the exam.
Consider a Cash Flow Stream of equal amounts of
1500 dollars for 8 years and a discount rate of 10%.
a. Calculate the PVOA and the FVOA, by using the Annuity
Formulae that you have learned in your class.
b. Calculate the PVAD and the FVAD.
c. Show that the PVAD exceeds PVOA.
d. Show that the FVAD exceeds FVOA.
You expect to receive two cash flows: $41,000 paid in 5 years and $61,500 paid in 10 years. You'll put the money into a savings account with an annual interest rate of 8%.
What is the future value of the combined cash flows, in 15 years?
Please Introduction and explanation without plagiarism please and use math tools plZ
Chapter 12 Solutions
Managerial Accounting (5th Edition)
Ch. 12 - Prob. 1QCCh. 12 - (Learning Objective 2) After identifying potential...Ch. 12 - Prob. 3QCCh. 12 - Prob. 4QCCh. 12 - Prob. 5QCCh. 12 - Prob. 6QCCh. 12 - Prob. 7QCCh. 12 - Prob. 8QCCh. 12 - Prob. 9QCCh. 12 - (Learning Objective 5) Which of the following...
Ch. 12 - Order the capital budgeting process (Learning...Ch. 12 - Prob. 12.2SECh. 12 - Prob. 12.3SECh. 12 - Prob. 12.4SECh. 12 - Prob. 12.5SECh. 12 - Prob. 12.6SECh. 12 - Prob. 12.7SECh. 12 - Prob. 12.8SECh. 12 - Prob. 12.9SECh. 12 - Prob. 12.10SECh. 12 - Prob. 12.11SECh. 12 - Prob. 12.12SECh. 12 - Prob. 12.13SECh. 12 - Prob. 12.14SECh. 12 - Prob. 12.15SECh. 12 - Identify ethical standards violated (Learning...Ch. 12 - Prob. 12.17AECh. 12 - Compute payback period and analyze changes...Ch. 12 - Prob. 12.19AECh. 12 - Prob. 12.20AECh. 12 - Prob. 12.21AECh. 12 - Prob. 12.22AECh. 12 - Calculate the payback and NPV for a sustainable...Ch. 12 - Prob. 12.24AECh. 12 - Prob. 12.25AECh. 12 - Prob. 12.26AECh. 12 - Prob. 12.27AECh. 12 - Prob. 12.28AECh. 12 - Prob. 12.29AECh. 12 - Prob. 12.30AECh. 12 - Prob. 12.31AECh. 12 - Prob. 12.32AECh. 12 - Prob. 12.33AECh. 12 - Prob. 12.34AECh. 12 - Prob. 12.35AECh. 12 - Prob. 12.36BECh. 12 - Prob. 12.37BECh. 12 - Prob. 12.38BECh. 12 - Prob. 12.39BECh. 12 - Prob. 12.40BECh. 12 - Prob. 12.41BECh. 12 - Prob. 12.42BECh. 12 - Prob. 12.43BECh. 12 - Prob. 12.44BECh. 12 - Prob. 12.45BECh. 12 - Prob. 12.46BECh. 12 - Prob. 12.47BECh. 12 - Prob. 12.48BECh. 12 - Prob. 12.49BECh. 12 - Prob. 12.50BECh. 12 - Prob. 12.51BECh. 12 - Prob. 12.52BECh. 12 - Prob. 12.53BECh. 12 - Prob. 12.54BECh. 12 - Prob. 12.55APCh. 12 - Prob. 12.56APCh. 12 - Prob. 12.57APCh. 12 - Prob. 12.58APCh. 12 - Prob. 12.59BPCh. 12 - Prob. 12.60BPCh. 12 - Evaluate an investment using all four methods...Ch. 12 - Prob. 12.62BPCh. 12 - Prob. 12.63SCCh. 12 - Discussion Questions 1. Describe the capital...Ch. 12 - Prob. 12.65ACTCh. 12 - Prob. 12.66ACTCh. 12 - Prob. 12.67ACT
Knowledge Booster
Similar questions
- Use the Present Value of $1 table to determine the present value of $1 received one year from now. Assume an 8% interest rate. Use the same table to find the present value of $1 received two years from now. Continue this process for a total of five years. Round to three decimal places. (Click the icon to view Present Value of $1 table.) Read the requirements. Requirement 1. What is the total present value of the cash flows received over the five-year period? Calculate the total present value of $1 received each year (Round to three decimal places, X.XXX.) Present Value One year from now Two years from now Three years from now Four years from now Five years from now Total present value Requirements 1. What is the total present value of the cash flows received over the five-year period? 2. Could you characterize this stream of cash flows as an annuity? Why or why not? 3. Use the Present Value of Ordinary Annuity of $1 table to determine the present value of the same stream of cash flows.…arrow_forwardBelow is a cash flow diagram drawn with a sample student number representing three different interest rates valid over a five-year period.$ 1033 in the first two years, twice that in the third year, $ 2066, and again $ 1033 in the last two years. a) Calculate the present value of these expenses.b) Calculate the equivalent amount at the end of the 5th year. Please write down the operations and formulas !!!arrow_forwardConstruct a cash flow diagram to find the presentworth in year 0 of a $400 expenditure in year 3, a$900 receipt in year 4, and $100 expenses in eachof years 5 and 6 at an interest rate of 15% per year.arrow_forward
- What is the present value of a savings account that is expected to pay $1,250 of cash inflow at the end of year 1, $0 cash inflow at the end of year 2 and $1,050 cash inflow at the end of 3rd year given the rate of return 10% in the first and second year and 12% in the third year? Please Show the workarrow_forwardTOPIC: ENGINEERING ECONOMICS INSTRUCTION: Answer the following questions by including the appropriate cash flow diagrams, solution, and final answer. 1. What is the future worth of a series of equal yearly deposits of Php 100,000 for 8 years in a savings account that earns 6% annual compound interest if (a) all deposits are made at the end of each year? and (b) all deposits are made at the beginning of each year?arrow_forwardSolve for the value of X in the accompanying table, so that the cash flow A is equivalent to the cash flow B. Let i 8% per year. Cash flow A Cash flow B Year Cash flow, $ Year Cash flow, S 2. 8,000 2. 3. 3. 4. -2X 8,000 3X Select one: O a. 8381.6 O b. 9009.4 O c.7126.0 O d. 9637.2 O e. 7753.8 4.arrow_forward
- Below is a cash flow diagram drawn with a sample student number representing three different interest rates valid over a five-year period.$ 1033 in the first two years, twice that in the third year, $ 2066, and again $ 1033 in the last two years. a) Calculate the present value of these expenses.b) Calculate the equivalent amount at the end of the 5th year.arrow_forwardconsider the following cash flow diagram: Date $500 -$500 Cash flow If the current interest rate is 7%, then the value as of year 1 is closest to Select one: a. $0 b. $68 c. $1000 d. $570arrow_forwardSUBJECT: ENGINEERING ECONOMICS INSTRUCTION: Answer the following questions by including the appropriate cash flow diagrams (graph it), solution, and final answer. 1. What equal-annual-payment series is required in order to repay each given present amount? (a) Php 1.5M in four years at 7% interest compounded quarterly, (b) Php 2.0M in five years at 8% interest compounded semi-annually, (c) Php 2.5M in six years at 5% interest compounded annually, and (d) Php 3.5M in 15 years at 7% interest.arrow_forward
- Which of the following is closest to the present value of a cash flow of $1,000 occurring in 7 years’ time given a discount rate of 4% p.a.? Group of answer choices A. $762.90 B. Need more information to answer the question C. $1,315.93 D. $1,310.80 E. $759.92arrow_forward1. Consider the following cash flow payments: An income of $2000 at the end of year 2, an income of $5000 at the end of year 4, an expense of $3000 at the end of year 8, and a final income of $4000 at the end of year 10. (a) Draw the cash flow diagram for the cash flow payments. (b) Write an expression: what is the present equivalent value of these payments over the 10-year period assuming an interest rate of 10% per year. Just write down the expression like "e.g. P = 1,000 (P/F, 4%, 10) + 2,500 (P/A, 4%, 5)-4,000". You don't need to calculate the final numerical answer. (Hint: you can write out the present equivalent value for each cash flow, and then sum them up.)arrow_forwardWhat is the present value of the following stream of cash flows if the discount rate is 9%? Year 1-5: $14,000 inflow Years 6-20: $23,000 inflow (Use the present value tables in your course packet for any present value calculations. Round your final answer to the nearest dollar.)arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you