Use the table below to answer the following questions: Present Value of 1 Factor Present Value...
| Use the table below to answer the following questions: | |||||
| Present Value of 1 Factor | Present Value of an Annuity of 1 Factor | ||||
| Period | 1/2 Yr | Full-Yr | 1/2 Yr | Full-Yr | |
| 1 | 0.9449 | 0.8929 | 0.9449 | 0.8929 | |
| 2 | 0.8929 | 0.7972 | 1.8378 | 1.6901 | |
| 3 | 0.8437 | 0.7118 | 2.6814 | 2.4018 | |
| 4 | 0.7972 | 0.6355 | 3.4786 | 3.0373 | |
| 5 | 0.7533 | 0.5674 | 4.2319 | 3.6048 | |
| 6 | 0.7118 | 0.5066 | 4.9437 | 4.1114 | |
| Assumption: Required annual effective rate (EPR) of return is 12%. | |||||
If an investment pays you $8,500 every 6 months for 3 years, starting at the beginning of each 6 month period, what is its present value?
Group of answer choices
44,471
44,021
40,831
36,302
Homework Answers
Number of payments = 3*2 = 6
Present value = amount to be received today + present value of amount to be received in future
= 8500 +8500*PVAF(1/2 Year, 5 periods)
=8500+8500*4.2319
=$44,471.15
I.e. $44,471
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Part A is:
What is the conventional payback period for Option A? Answer
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What is the conventional payback period for Option B? Answer
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Part B is:
What is the Present Worth of Option A? Answer -
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Present Value of Present Value of 1 Factor an Annuity of 1 Factor Period 1/2Yr Full-Yr 1/2 Yr Full-Yr 0.9449 0.8929 0.9449 0.8929 0.8929 0.7972 1.8378 1.6901 0.8437 0.7118 2.6814 2.4018 0.7972 0.6355 3.4786 3.0373 0.7533 0.5674 4.2319 3.6048 0.7118 0.5066 4.9437 4.1114 2 4 6 Assumption: Required annual effective rate (EPR) of return is 12%. If an investment pays you $8,500 every 6 months for 3 years, starting at the beginning of each 6 month period, what is its...
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Three mutually exclusive earth-moving pieces of equipment are being considered for several large building projects in India over the next five years. The estimated cash flows for each alternative are given below. The construction company's MARR is 12% per year. Which of the three alternatives, if any, should be adopted? Assume repeatability is appropriate for this comparison. Caterpillar Deere Case Capital investment $20,000 $26,000 $17,000 Net annual revenue $6,500 $10,000 $5,500 Salvage value...
Need assistance with this question.
Part A is:
What is the conventional payback period for Option A? Answer
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What is the conventional payback period for Option B? Answer
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What is the Present Worth of Option A? Answer -
What is the Present Worth of Option B? Answer -
I really appreciate the assistance
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