26.) You invest $13,420 in an annuity contract that earns 8% interest, compounde

Question

26.)

You invest $13,420 in an annuity contract that earns 8% interest, compounded annually. You are to receive annual payments for the next ten years. How much will each of the payments be? (Future Value of $1,Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Round your Time Value factors to 4 decimal places and final answer to answer to the nearest dollar amount.)

$1,342

$2,000

$1,449

$1,459

27.)

Your grandmother has told you she can either give you $4,100 now or $5,600 when you graduate from college in three years. Your savings account earns 6% interest, compounded annually. Which option would be worth more to you now, and how much more? (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Round your PV factor to 4 decimal places and final answer to 2 decimal places.)

The $4,100 now is worth $600.00 more than the $5,600 in the future.

The $5,600 in the future is worth $601.76 more than the $4,100 now.

The $4,100 now is worth $601.76 more than the $5,600 in the future.

The $5,600 in the future is worth $600.00 more than the $4,100 now.

28.)

You are saving for a car that you plan to purchase in five years. You plan to put $3,300 in savings (which earns 9%, compounded annually) at the end of each year until then. How much will you have saved for the car at the end of the five years? (Future Value of $1, Present Value of $1, Future Value Annuity of $1,Present Value Annuity of $1.) (Round your FV factor to 4 decimal places and final answer to the nearest dollar amount.)

$16,500

$24,190

$18,350

$19,750

29.)

Wilson Corp is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $53,000. The equipment will have an initial cost of $631,000 and have an 8 year life. The salvage value of the equipment is estimated to be $63,000. If the hurdle rate is 11%, what is the approximate net present value? (Future Value of $1, Present Value of $1,Future Value Annuity of $1, Present Value Annuity of $1.) (Round your PV factors to 4 decimal places and final answer to the nearest dollar amount.)

$63,000

$34,452

less than zero

$568,000

30.)

Frank Inc. is trying to decide whether to lease or purchase a piece of equipment needed for the next ten years. The equipment would cost $45,000 to purchase, and maintenance costs would be $5,600 per year. After ten years, Frank estimates it could sell the equipment for $27,000. If Frank leased the equipment, it would pay a set annual fee that would include all maintenance costs. Frank has determined after a net present value analysis that at its hurdle rate of 12%, it would be better off by $5,500 if it buys the equipment. What would the approximate annual cost be if Frank were to lease the equipment? (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Round your PV factors to 4 decimal places. Do not round intermediate calculations. Round your final answer to the nearest hundred.)

$10,000

$14,250

$13,000

$8,000

You invest $13,420 in an annuity contract that earns 8% interest, compounded annually. You are to receive annual payments for the next ten years. How much will each of the payments be? (Future Value of $1,Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Round your Time Value factors to 4 decimal places and final answer to answer to the nearest dollar amount.)

Explanation / Answer

26 th answer is 2000

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