Question

Help with #4 please

be $530 per acre-ft, using an interest rate of 10% per year, a) Determine the difference between present worth (in $/acre-ft) of the old and the new contracts (solve using both formula and spreadsheet functions). b) If new contract also needs a future payment of $2,000 at year 20, what is the equivalent annual worth of the new contract? (solve using both table values and spreadsheet functions) During a period when the real estate market in Phoenix, Arizona, was undergoing a significant downturn, CSM Consulting Engineers made an agreement with a distressed seller to purchase an office building under the following terms: total price of $2.1 million with a down payment of $400,000 now and no payments for 6 years, after which the remaining balance of $1.7 million would be paid. CSM was able to make this deal because of poor market conditions at the time of purchase, and, at the same time, planning to sell the building in 6 years (when market conditions would probably be tter) and move to a larger office building in Scottsdale, Arizona. If CSM was able to sell the building in exactly 6 years for $2.8 million, what rate of return per year did the company make on the investment? Solve the problem using formula, table values and 4. spreadsheet function and compare them. You are told that the present worth of a decreasing geometric gradient is $88,000. If the cash flow in year l is $30,000 and the gradient decrease is 19% per year, what is 5. the value of n? The interest rate is 15% per year.

Answer 1