In order to have $85,000 four years from now for equipment replacement, a construction company plans to set aside money today in government-issues bonds. If the bonds earn interest at a rate of 6% per year, how much money must the company invest?
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In order to have $85,000 four years from now for equipment replacement, a construction company plans to set aside money today in government-issues bonds.
If the bonds earn interest at a rate of 6% per year, how much money must the company invest?
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- Answer the following questions related to Dubois Inc. a. Dubois Inc. has $600,000 to invest. The company is trying to decide between two alternative uses of the funds. One alternative provides $80,000 at the end of each year for 12 years, and the other is to receive a single lump-sum payment of $1,900,000 at the end of the 12 years. Which alternative should Dubois select? Assume the interest rate is constant over the entire investment. b. Dubois Inc. has completed the purchase of new Dell computers. The fair value of the equipment is $824,150. The purchase agreement specifies an immediate down payment of $200,000 and semiannual payments of $76,952 beginning at the end of 6 months for 5 years. What is the interest rate, to the nearest percent, used in discounting this purchase transaction? c. Dubois Inc. loans money to John Kruk Corporation in the amount of $800,000. Dubois accepts an 8% note due in 7 years with interest payable semiannually. After 2 years (and receipt of…A major city wants to establish a sinking fund to pay off debts of PKR 800 million which come due in 10 years. The city can earn interest at the rate of 8 percent per year compounded monthly. If first deposit is made 1 month from now; What monthly deposit will be required to accumulate the PKR 800 million? How much interest will be earned on these depositsIndigo Company is considering investing in an annuity contract that will return $53,000 annually at the end of each year for 19 years. What amount will Indigo Company pay for this investment if the company earns an 8% return? (For calculation purposes, use 5 decimal places as displayed in the factor table provided. Round answer to 2 decimal places, e.g. 52.75.) Click here to view the factor table. Indigo Company pay for investment
- A real estate development company is planning to build five homes, each costing $155,000, in 212 years. The Galaxy Bank pays 6% interest compounded semiannually. How much (in $) should the company invest now to have sufficient funds to build the homes in the future?An investment company wants to establish a sinking fund to pay off debts of $85 million which come due in 10 years. The company can earn interest at the rate of 9 percent per year compounded annually. If the first deposit is made at the end of this year, what annual deposit will be required to accumulate the $85 million?To pay off $50,000,000 worth of new construction bonds when they come due in 20 years, a water municipality must deposit money into a sinking fund. Payments to the fund will be made quarterly, starting three months from now. If the interest rate for the sinking fund is 8% compounded quarterly,how much will each deposit be?
- You are the finance manager for a particular company. The company plans to purchase $2,000,000 in new assembly line machinery in 5 years. (Use Table 11-1 and Table 11-2. Round your answers to the nearest cent.) (a) How much (in $) must be set aside now at 8% interest compounded semiannually to accumulate the $2,000,000 in 5 years? (b) If the inflation rate on this type of equipment is 5% per year, what will be the cost (in $) of the equipment in 5 years, adjusted for inflation? $ (e) Use the inflation-adjusted cost of the equipment to calculate how much (in $) must be set aside now. (d) Use the present value formula to calculate how much (in $) would be required now if you found a bank that offered 8% interest compounded daily to obtain the value found in part b. (Ignore leap years in calculation.)To pay off $50,000,000 worth of new construction bonds when they come due in 20 years, a water municipality must deposit money into a sinking fund. Payments to the fund will be made quarterly, starting three months from now. If the interest rate for the sinking fund is 8% compounded quarterly, how much will each deposit be?A community wishes to purchase an existing utility valued at P500,000 by selling 5% bonds that will mature in 30 years. The money to retire the bond will be raised by paying equal annual amounts into a sinking fund that will earn 4%. What will be the total annual cost of the bonds until they mature?
- (Comprehensive problem) You would like to have $52,000 in 16 years To accumulate this amount, you plan to deposit an equal sum in the bank mach year that will our 7 percent interest compounded annually Your first payment will be made at the end of the year. a. How much must you deposit annually to accumulate this amount? b. If you decide to make a large lump-sum deposit today instead of the annual deposits, how large should this lump-sum deposit be? (Assume you can earn 7 percent on this depost) c. At the end of five years, you will receive $10,000 and deposit this in the bank toward your goal of $52,000 at the end of year 16 In addition to the lump sum deposit, how much must you deposit in equal annual amounts, beginning in year 1 to reach your goal? (Again, assume you can earn 7 percent on your deposits) a. How much must you deposit annually to accumulate this amount? (Round to the nearest cont) b. If you decide to make a large lump-sum deposit today instead of the annual deposits,…he Aggarwal Corporation needs to save $10 million to retire a(n) $10 million mortgage that matures in 13 years. To retire this mortgage, the company plans to put a fixed amount into an account at the end of each year for 13 years. The Aggarwal Corporation expects to earn 14 percent annually on the money in this account. What equal annual contribution must the firm make to this account to accumulate the $10 million by the end of 13 years?ttIn five years, ₱1.8M will be needed to pay for a building renovation. In order to generate this sum, a sinking fund of three annual payments is established now. For tax purposes, no further payments will be made after three years. How much payment is necessary if the money is worth 14% per annum? Assume a 6% inflation rate. Suppose an engineer purchases a home and secures a loan of ₱2.5M from a commercial bank for 20 years at an annual interest rate of 9%. Find the monthly amortization of the loan. How much is the total amount paid over the life of the loan in Problem 2? How much is the total amount of interest paid over 20 years in Problem 2. Please help me with this problem, thank you so much! I want to learn, you guys will be my guide
