Based on the given data pls find below steps, workings and answers:
The rate of return (IRR) is 7.38% which is lower than given 10%;
The NPV is negative $ 36749.84 at 10% cost of capital
If the required rate of return is less than 7.38% then this is feasible.
If the costs increased to $ 25000, then the rate of return (IRR) is 5.39%
The NPV is negative $ 82078.91
2. You are investing in a college education. The cost will be $12,000 at the beginning...
7. You plan to establish a college education fund for your child. The current cost for college is $12,000 per year and you expect this cost to increase by $600 per year. You plan to deposit money into an account earning 10% yearly nominal interest, compounded monthly, at the end of each year for the next 17 years. You will withdraw the amount required for college in the end of years 18 to 21 to pay for college for years...
11 Calculating Interest Rates. Assume the total cost of a college education will be $250,000 when your child enters college in 18 years. You presently have $25,000 to invest. What annual rate of interest must you earn on your investment to cover the cost of your child's college education? Calculating the Number of Periods. At 10 percent interest, how long does it take to double your money? To quadruple it? 12
Assume the total cost of a college education will be $285,000 when your child enters college in 22 years. You presently have $35,000 to invest. What annual rate of interest must you earn on your investment to cover the cost of your child's college education?
Your parents promise to buy your dream car upon graduation from college with your Masters Degree. Your dream car is expected to cost $60,000 in six years. If your parents earn an average return of 8% for 6 years, what amount must they invest each year in order to accumulate $60,000. If upon graduation (age 21) you decide to invest in a 401K. You begin at age 21 and invest $3,000 per year for 10 years and then stop. If...
Monterey company is considering investing in two new vans that are expected to generate combined cash inflows of $30,000 per year. The vans combined purchase price is $93,000. The expected life and salvage value of each or four years and $23,000, respectively. Monterey has an average cost of capital of 7%. a. calculate the net present value of the investment opportunity. b. indicate whether the investment opportunity is expected to earn a return that is above or below the cost...
cation fund for your child. The current cost for college 7 You plan to establish a college education fund for your child. The 000 per vear and you expect this cost to increase by $600 per year. You plan to deposit money into an account earning 10% yearly nominal interest, compounde monthly, at the end of each year for the next 17 years. You will withdraw the ar required for college in the end of years 18 to 21 to...
1. You have just graduated from college and want to start your own farm. You have three potential options: (1) a cow/calf operation, (2) grow your own crops, or (3) a feed lot where you finish cattle. All three require an investment of $100,000. The resulting profits for each option are: Option 3 S30,000 30,000 30,000 30,000 30,000 S45,000 40,000 35,000 15,000 15,000 Year 1 Year 2 Year 3 Year 4 Year 5 $15,000 20,000 30,000 35,000 55,000 The required-rate-of-return...
How do you calculate using TVM solver? 23. Bills planning for his daughter's college education to being in 7 years. He estimates the costs to be $15,000 per year for her 4 year degree. He also feels he can earn 7% on any money he invests over the next 7 years and during the 4 college years. How much must Bill deposit today for his daughter to be able to withdraw $15,000 at the beginning of each of her 4...
Assume the total cost of a college education will be $360,000 when your child enters college in 15 years. You presently have $58,000 to invest. What annual rate of interest must you earn on your investment to cover the cost of your child's college education? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Annual rate
You have no retirement savings upon graduation from college, but you can afford to save $4,800 annually at the end of each year until retirement that you plan to take place 43 years from today. If you hope to have $800,000 in savings when you retire, what rate of return must you earn over that time? Goal: Years: Planned annual payment: 800,000 43 4,800.00 Required rate of return;