What is the present value of $800 to be received

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1. At what annual interest? rate, compounded? annually, would ?$500 have to be invested for it to grow to ?$1,956.77 in 13 ?years? (Round to two decimal places.)

2. What is the present value of $800 to be received 9 years from now discounted back to the present at 12 percent? (Round to the nearest cent.)

3. You lend a friend $10,000?, for which your friend will repay you ?$27,027 at the end of 5 years. What interest rate are you charging your? "friend"? (Round to the nearest whole percent.)

4. You are offered $100,000 today or $320,000 in 15 years. Assuming that you can earn 16 percent on your? money, which should you? choose? (Round to the nearest cent.)

5. You are offered $100,000 today or $300,000 in 13 years. Assuming that you can earn 11 percent on your? money, which should you? choose? (Round to the nearest cent.)

6. Dowling Sportswear is considering building a new factory to produce aluminum baseball bats. This project would require an initial cash outlay of ?$5,500,000 and would generate annual net cash inflows of $1,100,000 per year for 6 years. Calculate the? project's NPV using a discount rate of 5 percent. (Round to the nearest dollar.)

7. Big? Steve's, makers of swizzle? sticks, is considering the purchase of a new plastic stamping machine. This investment requires an initial outlay of $105,000 and will generate net cash inflows of ?$19,000 per year for 8 years.

a. What is the? project's NPV using a discount rate of 9 percent?? Should the project be? accepted? Why or why? not?

b. What is the? project's NPV using a discount rate of 17 ?percent? Should the project be? accepted? Why or why? not?

c. What is this? project's internal rate of? return? Should the project be? accepted? Why or why? not? (Round to the nearest dollar.)

Reference no: EM133558067

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