5. The balance sheet (not shown in the excel document) as of 12/31/12 shows that

Question

5. The balance sheet (not shown in the excel document) as of 12/31/12 shows that Owner Equity was $798,918. If this amount were invested at 3% paid out annually for 40 years, what annual income would the investment produce? (Tip: His investment would be a “payment”).

Moore's Spreaesheet- Hnal [4 Compabblry Mode Exce Irsat Page Layou Fomu D RaviVi Hl Tel me what you wan to do Normal 2 Nomal 4 Calcuilatlon Check Ccl ormsthng abe 2 Moares Familay Restaurant Financial Data 3Income & Expensn statcment Historic pertormance 10ld Business Modell Change $0.,?34,COU $1,b//,120 $1,b15,/50 S4R5,000 $714,250 $784,963 $295,000 $294,355 292,515 $1,t 20,U60 $797,211 330,772 -y. Atr% 64.37% 10.77% $56,000 $61,425 ssa,047 567,721 15.76% 57,560 20,000 ss,801 957,729 ss,sns ,sa5 S9,072 21,000 s25,000 $29,000 $13,000 Ser,200 5.3bO $1,227,287 $1.344,495 $1.441,783 $449,833 $291,254 $178,277 20.00% 45.00% 420.vr% S0.54% 78.65% 12 Scrviccacccunting.trash,clcaning, ctc 1 Earnings Bcforc Interest, Income Taxcs,& Depreciation (EBITD) $8 $234,156 $125,953 $81,551 $49,918 .78.68%. 13 Dcoreciation on valuss 312.000.00 279.520.00 261,720.00 249,240.00-20.12% 21 Avcrage Maal Valuc O lype hene to search

Explanation / Answer

Future Value = Present Value (1+r)t

Where, r = rate of interest

t = time period

FV = 7,98,918 (1+0.03) 40

FV = $25,30,195

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