Question

Wildhorse Co. earns 9% on an investment that will return $530,000 9 years from now.

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(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

What is the amount Wildhorse should invest now to earn this rate of return? (Round answer to 2 decimal places, e.g. 5,275.25.)

Wildhorse Co. should invest

$enter an amount to be invested in dollars rounded to 2 decimal places

Blossom Company earns 4% on an investment that pays back $80,000 at the end of each of the next 4 years.

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(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

What is the amount Blossom Company invested to earn the 4% rate of return? (Round answer to 2 decimal places, e.g. 5,275.25.)

Blossom Company invested

$enter an amount invested in dollars rounded to 2 decimal places

Sheridan Company issues a 8%, 7-year mortgage note on January 1, 2022, to obtain financing for new equipment. Land is used as collateral for the note. The terms provide for semiannual installment payments of $58,000.

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(For calculation purposes, use 5 decimal places as displayed in the factor table provided.)

What are the cash proceeds received from the issuance of the note? (Round answer to 2 decimal places, e.g. 25.25.)

Answer 1

1) The return of $530,000 is one time at the end of 9 years

At 9% we will use PV factor of 9 year

=0.46043

pv = ?

FV= $530,000

R= 0.09

N= 9 YEARS

=530,000*0.46043

=$244,027.9

Wildhorse Co. should invest

$244,027.9

$enter an amount to be invested in dollars rounded

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