Answer the following questions. Polk Products is considering an investment project with the following cash flows:
|
Year 0 |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
|
|
Cashflow |
-100 |
90 |
-25 |
-40 |
30 |
80 |
The company’s cost of capital is 10%, and it can get an unlimited amount of capital at that cost.
What is the modified internal rate of return (MIRR) for the Project?
Select one:
a. 15.77%
b. 10.80%
c. 10.18%
d. 6.03%
e. 8.54%
In: Finance
An individual initially deposits $4,000 into an account that
pays interest at 8% per year compounded quarterly. A $200 deposit
is made in the first month of the second year with deposits
increasing by $40 per month until the end of the third year.
Beginning in the first month of the fifth year, withdrawals of $100
per month are taken out of the account until the end of the fifth
year. Compute the amount of money in the account to the nearest
cent immediately after the last withdrawal in year five.
In: Economics
A) Anthony invested $35,000 in Quanta three years ago. Quanta's value increased by -6.80% in the 1st year, -8.00% in the 2nd year, and 6.80% in the third year. how much does he have now?
B) Brandon invested $31,000 into principal financial three years ago. principal financial's value increased by 6.60% in the 1st year, 10.80% in the 2nd year, and -7.50% in the third year. what has been his gross holding period rate of return
In: Finance
Suppose that you could buy a one-year bond today, which has an interest rate of 3%. If you wait a year and buy a one-year bond then, the interest rate will be 4%. Two years from now, a one-year bond is expected to offer an interest rate of 5%. According to the expectations theory of the term structure of interest rates, what is the interest rate on a two-year bond today? What is the interest rate on a three-year bond today?
In: Economics
1. You take out a $20,000, ten-year loan. Equal payments are to be made at the end of each year at an interest rate of 10%. Calculate the appropriate loan table, showing the breakdown in each year between principal and interest.
| Cost | 20,000 | |||
| Payment | $3,254.91 | |||
| Interest | 10% | |||
| Years | 10 | |||
| Division of payment between: | ||||
| Year |
Principal at beginning of year |
Payment at end of year |
Interest | Principal |
| 1 | ||||
| 2 | ||||
| 3 | ||||
| 4 | ||||
| 5 | ||||
| 6 | ||||
| 7 | ||||
| 8 | ||||
| 9 | ||||
| 10 | ||||
| 0.00 | ||||
In: Finance
Suppose that annual income from a rental property is expected to start at $1800 per year and decrease at a uniform amount of $73 each year after the first year for the 13 year expected life of the property. The investment cost is $8800 and i is %11 per year. What is the present equivalent of the rental income? Assume that the investment occurs at time zero (now) and that the annual income is first received at the end of first year. PLEASE DEF?NE NET ANSWER W?TH BOL
In: Accounting
[The following information applies to the questions displayed below.] Russell Corporation sold a parcel of land valued at $517,500. Its basis in the land was $382,950. For the land, Russell received $72,750 in cash in year 0 and a note providing that Russell will receive $265,000 in year 1 and $179,750 in year 2 from the buyer. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)
b. What is Russell’s recognized gain in year 0, year 1, and year 2?
In: Accounting
Copy of Given the following information and options, calculate the optimal life of the project. Assume the cost of capital is 10% p.a. Maximum life is five years and replacement of like with like..
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Net Cash Flows ($) | (10,000) | 2,200 | 3,000 | 3,500 | 2,500 | 2,000 |
| Retirement Values ($) | 6,000 | 5,000 | 4,800 | 3,000 | 1,000 |
Kindly please explain the formula used and the way to approach this type of question.
Thanks
In: Finance
A farm purchased a new tractor for $30,000. They estimated the tractor would have a useful life of 5 years and would have a salvage value of $5,000. The farm uses the straight-line method and the half-year convention. The farm sold the tractor during year 3 for $19,000.
1. Compute the amount of depreciation expense to be taken in years 1, 2 and 3
Year 1
Year 2
Year 3
2. Prepare a journal entry to record the sale of the tractor in year 3.
In: Accounting
Actuaries use various parameters when evaluating the cost of a life insurance policy. The variance of the life spans of a population is one of the parameters used for the evaluation. Each year, the actuaries at a particular insurance company randomly sample 30 people who died during the year (with the samples chosen independently from year to year) to see whether the variance of life spans has changed. The life span data from this year and from last year are summarized below:
| Current Year | Last Year |
|---|---|
=x176.2 | =x276.6 |
=s2162.4 | =s2246.2 |
(The first row gives the sample means, and the second row gives
the sample variances.)
Assuming that life spans are approximately normally distributed for
each of the populations of people who died this year and people who
died last year, construct a 99%confidence interval for σ^2/ σ^2 the
ratio of the variance of the life span for the current year to the
variance of the life span for last year. Then complete the table
below.
Carry your intermediate computations to at least three decimal places. Write your final responses to at least two decimal places. (If necessary, consult a list of formulas.)
| What is the lower limit of the 99% confidence interval? | |
| What is the upper limit of the 99% confidence interval? |
In: Statistics and Probability