Homework Answers
Present Value, PV = $15,336
Future Value, FV = 0
Time Period = 6 years
Annual Withdrawal, PMT = -$3,200
Calculating Interest Rate,
Using TVM Calculation,
I = [PV = 15,336, PMT = -3,200, FV = 0, N = 6]
I = 0.0682
Interest Rate = 6.82%
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You have deposited $15,336 in a special account that has a guaranteed interest rate. If you...
ou have deposited $12,710 in a special account that has a guaranteed rate of return. If you withdraw $3,100 at the end o...
ou have deposited $12,710 in a special account that has a guaranteed rate of return. If you withdraw $3,100 at the end of each year for 5 years, you will completely exhaust the balance in the account. The guaranteed rate of return is closest to: (Ignore income taxes.) Click here to view Exhibit 13B-1 and Exhibit 13B-2, to determine the appropriate discount factor(s) using the tables provided.
You have deposited $7,620 in a special account that has a guaranteed rate of return of...
You have deposited $7,620 in a special account that has a guaranteed rate of return of 19% per year. If you are willing to completely exhaust the account, what is the maximum amount that you could withdraw at the end of each of the next 7 years? Select the amount below that is closest to your answer. (ignore income taxes.) Click here to view Exhibit 128-1 and Exhibit 120.2. to determine the appropriate discount factor(s) using the tables provided
Use the following information for the next two questions. Annual cash inflows that will arise from...
Use the following information for the next two questions. Annual cash inflows that will arise from two competing investment projects are given below: Investment Year $4,000 $8,000 $12,000 4 $16,000 Total $40,000 3 $16,000 $12,000 $8,000 $4,000 $40,000 Each investment project will require the same investment outlay. The discount rate is 16% Compute the present value of the cash inflows for Investment A. (Round to nearest dollar) Question 12 Compute the present value of the cash inflows for Investment B....
Matt recently deposited $27,500 in a savings account paying a guaranteed interest rate of 5.2% for...
Matt recently deposited $27,500 in a savings account paying a guaranteed interest rate of 5.2% for the next 10 years if Matt expects his marginal rate tax to be 22% for the next 10 years how much interest will he earn after-tax for the first year of his investment? how much interest will I earn after-tax for the second year of his investment if he withdraws enough cash every year to pay the tax on the interest he earns? How...
In Year 0, you deposit $5,000 into an account with an interest rate of 6%. Two...
In Year 0, you deposit $5,000 into an account with an interest rate of 6%. Two years later, the interest rate increases to 8%. Five years after that, the interest rate drops to 7%. You plan to withdraw all the money at the end of Year 15. a. At the end of Year 2, how much money is in the account? b. At the end of Year 7, how much money is in the account? c. At the end of...
(Ignore income taxes in this problem.) Judy Soope just received an annual raise of $700 starting...
(Ignore income taxes in this problem.) Judy Soope just received an annual raise of $700 starting with the current year. If Judy anticipates working for nine more years (including the current year) and the cash flows are discounted at 8%, what cash award (closest to) today would be equivalent to the pay raise? $6,300 $4,373 O $3,402 $3,848 (Ignore income taxes in this problem.) You have deposited $28,038 in a special account that has a guaranteed interest rate of 19%...
You have deposited $42,000 into an account that will earn an interest rate of 12% compounded...
You have deposited $42,000 into an account that will earn an interest rate of 12% compounded semiannually. How much will you have in this account at the end of seven years? $92,848.62 $71,218.48 $94,957.97 $113,949.56
You have $200,000 in a bank account today. It accrues interest at the rate of 6%...
You have $200,000 in a bank account today. It accrues interest at the rate of 6% annually. At the end of 20 years, you start withdrawing money from the account. The account still gains 6% per year on the remaining balance. How much can you withdraw per year if you want the account to last:
You have just deposited $6,000 into an account that promises to pay you an annual interest...
You have just deposited $6,000 into an account that promises to pay you an annual interest rate of 5.5 percent each year for the next 6 years. You will leave the money invested in the account and 10 years from today, you need to have $12,800 in the account. What annual interest rate must you earn over the last 4 years to accomplish this goal? Multiple Choice 10.64% 10.48% 9.22% 12.97% 11.53%
Use the following information: Annual cash inflows that will arise from two competing investment projects are...
Use the following information:
Annual cash inflows that will arise from two competing
investment projects are given below:
Investment
Year
A
B
1
$4,000
$16,000
2
$8,000
$12,000
3
$12,000
$8,000
4
$16,000
$4,000
Total
$40,000
$40,000
Each investment project will require the same investment outlay.
The discount rate is 16%
Compute the present value of the cash inflows for Investment A.
(Round to nearest dollar)
Compute the present value of the cash inflows for Investment B.
(Round to nearest...
You have deposited $7,620 in a special account that has a guaranteed rate of return of 19% per year. If you are willing to completely exhaust the account, what is the maximum amount that you could withdraw at the end of each of the next 7 years? Select the amount below that is closest to your answer. (ignore income taxes.) Click here to view Exhibit 128-1 and Exhibit 120.2. to determine the appropriate discount factor(s) using the tables provided
Use the following information for the next two questions. Annual cash inflows that will arise from two competing investment projects are given below: Investment Year $4,000 $8,000 $12,000 4 $16,000 Total $40,000 3 $16,000 $12,000 $8,000 $4,000 $40,000 Each investment project will require the same investment outlay. The discount rate is 16% Compute the present value of the cash inflows for Investment A. (Round to nearest dollar) Question 12 Compute the present value of the cash inflows for Investment B....
In Year 0, you deposit $5,000 into an account with an interest rate of 6%. Two years later, the interest rate increases to 8%. Five years after that, the interest rate drops to 7%. You plan to withdraw all the money at the end of Year 15. a. At the end of Year 2, how much money is in the account? b. At the end of Year 7, how much money is in the account? c. At the end of...
(Ignore income taxes in this problem.) Judy Soope just received an annual raise of $700 starting with the current year. If Judy anticipates working for nine more years (including the current year) and the cash flows are discounted at 8%, what cash award (closest to) today would be equivalent to the pay raise? $6,300 $4,373 O $3,402 $3,848 (Ignore income taxes in this problem.) You have deposited $28,038 in a special account that has a guaranteed interest rate of 19%...
Use the following information:
Annual cash inflows that will arise from two competing
investment projects are given below:
Investment
Year
A
B
1
$4,000
$16,000
2
$8,000
$12,000
3
$12,000
$8,000
4
$16,000
$4,000
Total
$40,000
$40,000
Each investment project will require the same investment outlay.
The discount rate is 16%
Compute the present value of the cash inflows for Investment A.
(Round to nearest dollar)
Compute the present value of the cash inflows for Investment B.
(Round to nearest...
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