Calculations and Business Problems, calculus homework help

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Purpose of Assignment 

The purpose of this assignment is to allow the student to calculate the project cash flow using net present value (NPV), internal rate of return (IRR), and the payback methods. 

Assignment Steps

Calculate the following time value of money problems: 

  1. If you want to accumulate $500,000 in 20 years, how much do you need to deposit today that pays an interest rate of 15%?
  2. What is the future value if you plan to invest $200,000 for 5 years and the interest rate is 5%?
  3. What is the interest rate for an initial investment of $100,000 to grow to $300,000 in 10 years?
  4. If your company purchases an annuity that will pay $50,000/year for 10 years at a 11% discount rate, what is the value of the annuity on the purchase date if the first annuity payment is made on the date of purchase?
  5. What is the rate of return required to accumulate $400,000 if you invest $10,000 per year for 20 years. Assume all payments are made at the end of the period. 

Calculate the project cash flow generated for Project A and Project B using the NPV method.

  • Which project would you select, and why?
  • Which project would you select under the payback method? The discount rate is 10% for both projects.
  • Use Microsoft® Excel® to prepare your answer.
  • Note that a similar problem is in the textbook in Section 5.1.

Sample Template for Project A and Project B: 

 


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Explanation & Answer

Haloo Please find the attached copy of the answers to the question you postedin case of further assistance let me know asap.

Running Head: TIME VALUE OF MONEY

1

Time Value Of Money
Student’s Name
Professor’s Name
Course Title
Date

TIME VALUE OF MONEY

2
Time value of money

If you want to accumulate $ 500,000 in 20 years, how much do you need to deposit today
that pays an interest rate of 15%?
Future value

$ 500,000

Time

20 years

Rate

15 %

Present value =?
Present value = Future value / (1 + r) ^ n
Where r is the interest rate and n is the number of years
= $ 500,000 / (1 + 0.15) ^ 20
= $ 500,000 / (1.15) ^ 20
= $ 500,000 / 16.37
= $ 30543.68
What is the future value if you plan to invest $ 200,000 for 5 years and the interest rate is
5%?
Present v...


Anonymous
I was struggling with this subject, and this helped me a ton!

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