Question

Please note- we can not use the table. All answers need to be calculated in Excel....

Please note- we can not use the table. All answers need to be calculated in Excel.

Fraser Company will need a new warehouse in eight years. The warehouse will cost $430,000 to build.

Use Excel or a financial calculator to solve. Round answers to the nearest dollar.
Required:
1.

What lump-sum amount should the company invest now to have the $430,000 available at the end of the eight-year period? Assume that the company can invest money at four percent.

      

2.

What lump-sum amount should the company invest now to have the $430,000 available at the end of the eight-year period? Assume that the company can invest money at eight percent.

      

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Interest Rate (rate) Term in years (nper) Payment (pmt) Future Value (fv) Present Value Formula
4% 8 430000 314196.79 =PV(4%,8,,430000,0)
8% 8 430000 232315.62 =PV(8%,8,,430000,0)
W.N
The PV function in Excel is as follows:
=PV(rate,nper,pmt,[fv],[type])
Note: When the PV function is used with the fv argument instead of the pmt argument,the pmt argument in the function is indicated with a comma
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
How much money do you need to put away every year for the first 10 years...
How much money do you need to put away every year for the first 10 years into an account, that earns an interest rate of 2% compounded quarterly, if you expect to have $250,000 at the end of the 15th year? You now invest this $250,000 (lump sum) into another account for 15 more years. What is the interest rate, compounded annually, that you should look for if you need to have $325,000 at the end of the period?
In three years, when he is discharged from the Air Force, Steve wants to buy an...
In three years, when he is discharged from the Air Force, Steve wants to buy an $18,000 power boat. Required: What lump-sum amount must Steve invest now to have the $18,000 at the end of three years if he can invest money at: (Use Microsoft Excel to calculate present values. Do not round intermediate calculations.)
On Excel ABC Corp. wishes to invest a fixed sum at 4.65% and withdraw $10,000 at...
On Excel ABC Corp. wishes to invest a fixed sum at 4.65% and withdraw $10,000 at the end of each month for the next three years. How much ABC will need to invest? In other words, what is the present value of an ordinary annuity of $10,000 for 36 periods, discounted at a rate of 4.65%/12 per period? Assume that ABC Corp can earn 4.65%, but needs to withdraw $10,000 for 72, not 36 months. How much cash must it...
Show all your work (use of formula, etc.) in solving the problems. You still need to...
Show all your work (use of formula, etc.) in solving the problems. You still need to show your work even if you use the financial calculator to get the answers.    2. You are planning to save for retirement over the next 40 years. To do this, you will invest $900 per month in a stock account and $500 per month in a bond account. The return of the stock account is expected to be 8 percent per year (compounded...
You would like to have ​$73,000 in 14 years. To accumulate this​ amount, you plan to...
You would like to have ​$73,000 in 14 years. To accumulate this​ amount, you plan to deposit an equal sum in the bank each year that will earn 9 percent interest compounded annually. Your first payment will be made at the end of the year. a.  How much must you deposit annually to accumulate this​ amount? b.  If you decide to make a large​ lump-sum deposit today instead of the annual​ deposits, how large should the​ lump-sum deposit​ be? ​...
15 years from now, your 2-year old son will be attending Harvard. You have determined he...
15 years from now, your 2-year old son will be attending Harvard. You have determined he will need $85,000 per year for tuition and living expenses. In 15 years, you will give him a lump sum payment for the entire amount he will need, assuming that he will be able to invest the money not yet needed at 4.5% interest. You have found an investment opportunity that will yield an annual return of 6.5% on your monthly payments. How much...
15 years from now, your 2-year old son will be attending Harvard.  You have determined he will...
15 years from now, your 2-year old son will be attending Harvard.  You have determined he will need $85,000 per year for tuition and living expenses.  In 15 years, you will give him a lump sum payment for the entire amount he will need, assuming that he will be able to invest the money not yet needed at 4.5% interest.  You have found an investment opportunity that will yield an annual return of 6.5% on your monthly payments.  How much will you have to...
15 years from now, your 2-year old son will be attending Harvard. You have determined he...
15 years from now, your 2-year old son will be attending Harvard. You have determined he will need $85,000 per year for tuition and living expenses. In 15 years, you will give him a lump sum payment for the entire amount he will need, assuming that he will be able to invest the money not yet needed at 4.5% interest. You have found an investment opportunity that will yield an annual return of 6.5% on your monthly payments. How much...
Please use Excel to answer the following TVM questions. You can use this spreadsheet to set...
Please use Excel to answer the following TVM questions. You can use this spreadsheet to set up your calculations if you so desire. Unless indicated otherwise, assume that all of the problems are ordinary annuities (payment made at the end of the period).        Part 4 I need $1,000,000 in 20 years if I am going to retire (Fat Chance!!) I currently have $100,000 saved for my retirement (I wish!!). A slick Wallstreet investment expert with the last name of Madoff...
Dubois Inc. has $600,000 to invest. The company is trying to decide between two alternative uses...
Dubois Inc. has $600,000 to invest. The company is trying to decide between two alternative uses of the funds. One alternative provides $80,000 at the end of each year for 12 years, and the other is to receive a single lump-sum payment of $1,900,000 at the end of the 12 years. Which alternative should Dubois select? Assume the interest rate is constant over the entire investment. I need this in EXCEL explaining the step so I understand.
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT