Question

In: Finance

A. Wissler, Inc. owes $273,000 to the bank for some improvements made to its office building....

A.

Wissler, Inc. owes $273,000 to the bank for some improvements made to its office building. The loan is for 60 months and the monthly payment is $5,945.79 What is the interest rate on the loan?

B.

Huggins Co. has identified an investment project with the following cash flows.

    

Year Cash Flow
1 $ 790
2 1,070
3 1,330
4 1,450

  

If the discount rate is 9 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

  

  Present value $   


What is the present value at 17 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

  

  Present value $   

  

What is the present value at 25 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)

  

  Present value $   

Solutions

Expert Solution

A.

Wissler, Inc. owes $273,000 to the bank for some improvements made to its office building. The loan is for 60 months and the monthly payment is $5,945.79 What is the interest rate on the loan?

RATe ?
NPER 60
PV 273000
FV 0
PMT 5945.79
=RATE(60,5945.79,-273000,0,0)*12 11.07%

Huggins Co. has identified an investment project with the following cash flows.

If the discount rate is 9 percent, what is the present value of these cash flows?

PV factor 9% PV
1 790 0.917431 724.77
2 1070 0.841680 900.60
3 1330 0.772183 1027.00
4 1450 0.708425 1027.22
Present value 3679.59

What is the present value at 17 percent?

PV factor17% PV
1 790 0.854701 675.21
2 1070 0.730514 781.65
3 1330 0.624371 830.41
4 1450 0.533650 773.79
Present value 3061.07

What is the present value at 25 percent?
PV factor17% PV
1 790 0.800000 632.00
2 1070 0.640000 684.80
3 1330 0.512000 680.96
4 1450 0.409600 593.92
Present value 2591.68

jeff jeffy answered 7 months ago
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