Question

Question 16 Not yet Retreaded Tires plans to save $23,500, 524,500, $26,500, and $28,000 at the end of each year for Years 1 to 4, respectively. If it earns 2.1 percent on its savings, how much will the firm have saved at the end of Year 4? Points out of 5.00 Select one: a $100,878.30 b. $104,174,00 c. $111,860.57 d. $102,140 20 e $105,608.11 Question 17 Moonlight Industries just signed a sales contract with a new customer. JK will receive annual payments in the amount of $50,000, 596,000, $123,000, and $138,000 at the end of Years 1 to 4, respectively. What is this contract worth at the end of Year 4 if the firm earns 3.75 percent on its savings? an Points out of 500 Select one: a. $443,571.88 b. $348,457.72 c. $412,264.53 d. $431,417.66 e. $424,786.07

Answer 1

rate positively ..

Ans 16	computation of future value
	Year	Cash flow	future value
	1	23500	25,011.81	23500*(1+2.1%)^3
	2	24500	25,539.80	24500*(1+2.1%)^2
	3	26500	27,056.50	26500*(1+2.1%)
	4	28000	28,000.00	28000
			105,608.11
	ans = option e =		105,608.11
Ans 17	computation of future value
	Year	Cash flow	future value
	1	50000	55,838.57	50000*(1+3.75%)^3
	2	96000	103,335.00	96000*(1+3.75%)^2
	3	123000	127,612.50	123000*(1+3.75%)^1
	4	138000	138,000.00	138000
			424,786.07
	ans = option e =		424,786.07
Ans 18	Computation of present value
		i	ii	iii=i*ii
	Year	Cash flow	PVIF @ 9%	Present value
	1	18000	0.917431193	16,513.76
	2	32000	0.841679993	26,933.76
	3	45000	0.77218348	34,748.26
				78,195.78
	Ans = option b. =			78,195.78