Interest and savings

Assignment Help Financial Accounting
Reference no: EM13754504

Interest and savings.

If an initial bank deposit of $5,000 yields an account value of $12,000 at the end of 10 years, what is the interest rate at work?

If an initial deposit of $250,000 is made into an escrow account that pays 9% interest annually, what is the maximum amount that can be withdrawn (equally) at the end of each year for 12 years, leaving an account balance or $0 after the 12th year?

Under consideration is the purchase of a new air conditioning system. It costs $30,000 to purchase and will be used for 5 years. The electric bill paid at the end of each year will be reduced by $9,000 with the new system. The new unit will require a $2,000 overhaul at the end of the 2nd and 4th years. The new unit will have a salvage value of $11,000. The interest rate is twelve percent.

a) What is the present equivalent value of the savings yielded by the new system?

b) What is the rate of return for the new system?

Reference no: EM13754504

Questions Cloud

Using the fair value to measure no controlling interest : On January 1, 2014, A company acquired 60% of the outstanding shares of B company by paying $1.2 Million in cash, the fair value of B's identifiable asset and liability is $2 million and $ 0.5 million respectively. Using the fair value to measure no ..
Difference in total dollars : Calculate the difference in payments on a 30-year mortgage at 9% interest versus a 15-year mortgage with 8.5% interest. Both mortgages are for $300,000 and have monthly payments. What is the difference in total dollars that will be paid to the len..
Memorandum format : Write a one-page action plan, in memorandum format, discussing how you would obtain an understanding of key business processes of a company that hires you to provide financial services. The memorandum should specify an industry, a product, and one se..
Why did the great depression happen : why did the great depression happen? Why did it last for so long?
Interest and savings : If an initial bank deposit of $5,000 yields an account value of $12,000 at the end of 10 years, what is the interest rate at work? If an initial deposit of $250,000 is made into an escrow account that pays 9% interest annually, what is the maximum am..
Using the percentage-of-completion method : Johnny Bravo Company began operations in 2012 and has provided the following information. Gross profit on construction contracts using the percentage-of-completion method for book purposes amounts to $92,000. Gross profit on construction contracts fo..
To determine a standard time for the task : To determine a standard time for the task, an employee from an existing assembly station was trained in the new assembly process. Once proficient, the employee was then asked to perform the task 17 times so a standard could be determined. The actual ..
What are the product features : What are the product's features? In your paper, explain how that technological innovation will change the way we live today (be specific). How will the product be commercialized?
What are basic characteristics of classical empires greece : What are the basic characteristics of the classical empires of Greece, Rome, Qin and Han China, and Maurya and Gupta India?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Describe the reasons why corporations invest in securities

Describe the reasons why corporations invest in securities. Discuss how the market would be affected if they stopped this practice?

  Evaluating audit results for assets in the audit

You are evaluating audit results for assets in the audit of Roberts Manufacturing. You set the preliminary judgment about materiality at $50,000. The account balances, tolerable misstatement, and estimated overstatements in the accounts are shown nex..

  What is the net present value of the proposed investment

What is the net present value of the proposed investment ignore income taxes and depreciation and assuming a 5-year straight-line depreciation, how will this impact the factory's fixed costs for each of the 5 years (and the implied product costs)? ..

  What was the average issue price per share of preferred

what was the average issue price per share of preferred stock?7 preferred stock 100 par callable at 105. 50000 shares

  Wood company has starting work in process inventory of

wood company has starting work in process inventory of 216000 and net manufacturing costs of 954000. if cost of goods

  Solve integrating case

Complete the following activities and submit your answers to your instructor in a Word document formatted to proper APA specifications.  Include any relevant supporting calculations.

  Which alternative produces the larger cash flow

Mills, Inc., sold 120,000 cases of glue at $20 per case during 2014. Its beginning inventory consisted of 20,000 cases at a cost of $12 per case. During 2014 it purchased 60,000 cases at $14 per case and, later, 50,000 cases at $15 per case. Using th..

  Discussion on any relevant accounting standards

Outline why depreciation is required – basing your discussion on any relevant accounting standards; and any relevant definitions, concepts and assumptions from the accounting framework.

  On 31st december 2010 the american bank enters into a debt

on 31st december 2010 the american bank enters into a debt restructuring agreement with barkley company which is now

  Engages in a number of transactions

A Stockholders' equity transactions and analysis LO C2, P1 Kinkaid Co. is incorporated at the beginning of this year and engages in a number of transactions. The following journal entries impacted its stockholders’ equity during its first year of ope..

  Summary of significant accounting policies

On 14 July 2016, a rights issue of 1,280,000 ordinary shares were madeat $1.25 each. The underwriting commission and other shares issue costs forthe issue amounted to $15,000. The shares issued ranked equally with existing shares for dividend.

  Identify the greatest problems virms

Reporting results Identify the greatest problems Virms is likely to have doing the audit

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd