Question
In: Accounting
Present value of $1 Periods 4% 6% 8% 10% 12% 14% 1 0.96154 0.94340 0.92593 0.90909...
Present value of $1
| Periods | 4% | 6% | 8% | 10% | 12% | 14% |
| 1 | 0.96154 | 0.94340 | 0.92593 | 0.90909 | 0.89286 | 0.87719 |
| 2 | 0.92456 | 0.89000 | 0.85734 | 0.82645 | 0.79719 | 0.76947 |
| 3 | 0.88900 | 0.83962 | 0.79383 | 0.75131 | 0.71178 | 0.67497 |
| 4 | 0.85480 | 0.79209 | 0.73503 | 0.68301 | 0.63552 | 0.59208 |
| 5 | 0.82193 | 0.74726 | 0.68058 | 0.62092 | 0.56743 | 0.51937 |
| 6 | 0.79031 | 0.70496 | 0.63017 | 0.56447 | 0.50663 | 0.45559 |
| 7 | 0.75992 | 0.66506 | 0.58349 | 0.51316 | 0.45235 | 0.39964 |
| 8 | 0.73069 | 0.62741 | 0.54027 | 0.46651 | 0.40388 | 0.35056 |
| 9 | 0.70259 | 0.59190 | 0.50025 | 0.42410 | 0.36061 | 0.30751 |
| 10 | 0.67556 | 0.55839 | 0.46319 | 0.38554 | 0.32197 | 0.26974 |
Present value of an annuity of $1
| Periods | 4% | 6% | 8% | 10% | 12% | 14% |
| 1 | 0.96154 | 0.94340 | 0.92593 | 0.90909 | 0.89286 | 0.87719 |
| 2 | 1.88609 | 1.83339 | 1.78326 | 1.73554 | 1.69005 | 1.64666 |
| 3 | 2.77509 | 2.67301 | 2.57710 | 2.48685 | 2.40183 | 2.32163 |
| 4 | 3.62990 | 3.46511 | 3.31213 | 3.16987 | 3.03735 | 2.91371 |
| 5 | 4.45182 | 4.21236 | 3.99271 | 3.79079 | 3.60478 | 3.43308 |
| 6 | 5.24214 | 4.91732 | 4.62288 | 4.35526 | 4.11141 | 3.88867 |
| 7 | 6.00205 | 5.58238 | 5.20637 | 4.86842 | 4.56376 | 4.28830 |
| 8 | 6.73274 | 6.20979 | 5.74664 | 5.33493 | 4.96764 | 4.63886 |
| 9 | 7.43533 | 6.80169 | 6.24689 | 5.75902 | 5.32825 | 4.94637 |
| 10 | 8.11090 | 7.36009 | 6.71008 | 6.14457 | 5.65022 | 5.21612 |
Jackson Company invests in a new piece of equipment costing
$40,000. The equipment is expected to yield the following amounts
per year for the equipment's four-year useful life:
| Cash revenues | $ 60,000 |
| Cash expenses | (32,000) |
| Depreciation expenses (straight-line) | (10,000) |
| Income from equipment | $ 18,000 |
| Cost of capital | 14% |
What is the net present value of this investment in equipment?
(Note: Use the discount tables provided and round the NPV to the
nearest dollar.)
a.$81,592
b.$(4,480)
c.$52,452
d.$41,584
Solutions
Expert Solution
Correct answer--------------d.$41,584
Working
| Year | Cash revenues (A) | Cash expenses (B) | Net cash inflows (C=A-B) | Discounting factor (D) | Discounted cash flow (E=C x D) |
| 1 | $ 60,000 | $ 32,000.00 | $ 28,000.00 | 0.87719 | $ 24,561 |
| 2 | $ 60,000 | $ 32,000.00 | $ 28,000.00 | 0.76947 | $ 21,545 |
| 3 | $ 60,000 | $ 32,000.00 | $ 28,000.00 | 0.67497 | $ 18,899 |
| 4 | $ 60,000 | $ 32,000.00 | $ 28,000.00 | 0.59208 | $ 16,578 |
| Present value of all cash inflow | $ 81,584 | ||||
| Amount to be invested | $ 40,000 | ||||
| Net Present value | $ 41,584 | ||||
ekkarill92 answered 2 years agoRelated Solutions
Figure 14-10. Present value of $1 Periods 4% 6% 8% 10% 12% 14% 1 0.962 0.943...
Figure 14-10.
Present value of $1
Periods
4%
6%
8%
10%
12%
14%
1
0.962
0.943
0.926
0.909
0.893
0.877
2
0.925
0.890
0.857
0.826
0.797
0.769
3
0.889
0.840
0.794
0.751
0.712
0.675
4
0.855
0.792
0.735
0.683
0.636
0.592
5
0.822
0.747
0.681
0.621
0.567
0.519
6
0.790
0.705
0.630
0.564
0.507
0.456
7
0.760
0.665
0.583
0.513
0.452
0.400
8
0.731
0.627
0.540
0.467
0.404
0.351
9
0.703
0.592
0.500
0.424
0.361
0.308
10
0.676
0.558
0.463...
Present value of an Annuity of $1 in Arrears ? Periods 4% 6% 8% 10% 12%...
Present value of an Annuity of $1 in
Arrears
?
Periods
4%
6%
8%
10%
12%
14%
1
0.962
0.943
0.926
0.909
0.893
0.877
2
1.886
1.833
1.783
1.736
1.690
1.647
3
2.775
2.673
2.577
2.487
2.402
2.322
4
3.630
3.465
3.312
3.170
3.037
2.914
5
4.452
4.212
3.993
3.791
3.605
4.433
6
5.242
4.917
4.623
4.355
4.111
3.889
7
6.002
5.582
5.206
4.868
4.564
4.288
8
6.733
6.210
5.747
5.335
4.968
4.639
9
7.435
6.802
6.247
5.759
5.328
4.946...
Figure 14-11. Present value of an Annuity of $1 in Arrears Periods 4% 6% 8% 10%...
Figure 14-11.
Present value of an Annuity of $1 in
Arrears
Periods
4%
6%
8%
10%
12%
14%
1
0.962
0.943
0.926
0.909
0.893
0.877
2
1.886
1.833
1.783
1.736
1.690
1.647
3
2.775
2.673
2.577
2.487
2.402
2.322
4
3.630
3.465
3.312
3.170
3.037
2.914
5
4.452
4.212
3.993
3.791
3.605
4.433
6
5.242
4.917
4.623
4.355
4.111
3.889
7
6.002
5.582
5.206
4.868
4.564
4.288
8
6.733
6.210
5.747
5.335
4.968
4.639
9
7.435
6.802
6.247
5.759
5.328...
Periods 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 12% 14% 15% 16% 18%...
Periods
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
12%
14%
15%
16%
18%
20%
1
0.990
0.980
0.971
0.962
0.952
0.943
0.935
0.926
0.917
0.909
0.893
0.877
0.870
0.862
0.847
0.833
2
0.980
0.961
0.943
0.925
0.907
0.890
0.873
0.857
0.842
0.826
0.797
0.769
0.756
0.743
0.718
0.694
3
0.971
0.942
0.915
0.889
0.864
0.840
0.816
0.794
0.772
0.751
0.712
0.675
0.658
0.641
0.609
0.579
4
0.961
0.924
0.888
0.855
0.823
0.792
0.763
0.735
0.708
0.683
0.636...
Present Value of $1 at 5% for 5 periods .78353 Present Value of $1 at 6%...
Present Value of $1 at 5% for 5 periods .78353 Present Value of
$1 at 6% for 5 periods .74726 Present value of $1 at 10% for 5
periods .62092 Present Value of $1 at 12% for 5 periods .56743
Present Value of $1 at 5% for 10 periods .61391 Present Value of $1
at 6% for 10 periods .55840 Present value of $1 at 10% for 10
periods .38554 Present Value of $1 at 12% for 10 periods .32197...
Present Value of $ 1 at 12% for 8 years = 0.404 Present Value of an...
Present Value of $ 1 at 12% for 8 years = 0.404
Present Value of an annuity at 12% for 8 years = 4.968
Future Value of $1 at 12% for 8 years = 2.476
Future Value of an annuity at 12% for 8 years = 12.3
Vargas Products has settled a lawsuit for patent infringement.
They will receive $60,000 per year for the next 8 years. They
intend to put that money aside for a large R & D...
Present Value of $ 1 at 12% for 8 years = 0.404 Present Value of an...
Present Value of $ 1 at 12% for 8 years = 0.404
Present Value of an annuity at 12% for 8 years = 4.968
Future Value of $1 at 12% for 8 years = 2.476
Future Value of an annuity at 12% for 8 years = 12.3
Vargas Products is considering a capital project. Project A has
net cash inflows of $56,000 annually for 8 years. What is the total
amount they would be willing to invest if their expected...
Match No. 1 2 3 4 5 6 7 8 9 10 11 12 13 14...
Match No.
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Player A
8
42
56
68
91
123
12
46
57
137
5
80
14
10
19
Player B
38
44
46
59
57
61
48
42
51
39
58
41
55
45
68
1. For the given data set representing the runs scored by two
players in last 15 matches, conduct the following analysis:
i. Which average you will use to summarize...
(a) What is the present value of $29,400 due 8 periods from now, discounted at 6%?...
(a) What is the present value of $29,400 due 8
periods from now, discounted at 6%? (Round answer to 2
decimal places, e.g. 25.25.)
(b) What is the present value of $29,400 to be
received at the end of each of 12 periods, discounted at 12%?
(Round answer to 2 decimal places, e.g.
25.25.)
------------------
Ivanhoe Company is about to issue $298,700 of 6-year bonds
paying an 11% interest rate, with interest payable semiannually.
The discount rate for such securities...
Day 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15...
Day
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
Number of Aides Absent
5
8
11
15
4
2
7
1
4
6
14
19
3
5
8
In which of the following ranges you can find the Upper Control
Limit of the control chart?
0.1427
0.1536
0.1677
Not computable with information available
In which of the following ranges you can find the Lower Control
Limit of the control chart?
Does not exit...
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