Question

Assume DHL will need to replace a piece of equipment and will use that will cost...

Assume DHL will need to replace a piece of equipment and will use that will cost $240,000 the company will set up a sinking fund to finance the future purchase what amount should DHL put away quarterly if they can earn 12% entrance round to the nearest cent
Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Assumption : As year is not mentioned to buy the asset. Let us suppose company has to pay for the asset after 1 year.

Amount should be put away quarterly =

Where

A = Amount Required

r = Annualised rate of interest

r/m = Periodic Interest rate

nm = total number of periods

57360

Hence amount should be put out quaterly for buying the asset after one year is $ 57360

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
Assume DHL needs access to a stream of capital for the next 10 years at DHL...
Assume DHL needs access to a stream of capital for the next 10 years at DHL needs to plan $5 million per year and can earn 4% interest compounded annually how much was the company put away today to have these funds when needed how much of DHS capital need will come from interest earned round to the nearest Dollar
A corporation creates a sinking fund in order to have $680,000 to replace some machinery in...
A corporation creates a sinking fund in order to have $680,000 to replace some machinery in 10 years. How much should be placed in this account at the end of each quarter if the annual interest rate is 4.3% compounded quarterly? (Round your answers to the nearest cent.) $ How much interest would they earn over the life of the account? $ Determine the value of the fund after 2, 4, and 6 years. 2 years $ 4 years $...
A corporation creates a sinking fund in order to have $610,000 to replace some machinery in...
A corporation creates a sinking fund in order to have $610,000 to replace some machinery in 11 years. How much should be placed in this account at the end of each quarter if the annual interest rate is 4.9% compounded quarterly? (Round your answers to the nearest cent.) $10544.14   How much interest would they earn over the life of the account? $   146057.84 Determine the value of the fund after 2, 4, and 6 years. 2 years $  88059.78 4 years $  185128.62...
Major Corp. is considering the purchase of a new piece of equipment. The cost savings from...
Major Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $114,000. The equipment will have an initial cost of $577,000 and have an 8 year life. The equipment has no salvage value. The hurdle rate is 8%. Ignore income taxes. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor from...
Find the amount accumulated FV in the sinking fund. HINT [See Example 1.] (Assume end-of-period deposits...
Find the amount accumulated FV in the sinking fund. HINT [See Example 1.] (Assume end-of-period deposits and compounding at the same intervals as deposits. Round your answer to the nearest cent.) $400 is deposited monthly for 10 years at 2% per year in an account containing $6,000 at the start FV = $ Find the periodic payments PMT necessary to accumulate the amount given in a sinking fund. HINT [See Example 2.] (Assume end-of-period deposits and compounding at the same...
A corporation creates a sinking fund in order to have $760,000 to replace some machinery in...
A corporation creates a sinking fund in order to have $760,000 to replace some machinery in 8 years. How much should be placed in this account at the end of each month if the annual interest rate is 3.6% compounded monthly? (Round your answers to the nearest cent.) $ How much interest would they earn over the life of the account? Determine the value of the fund after 2, 4, and 6 years.    $ How much interest was earned...
A company estimates that it will need $139,000 in 18 years. if it eatablishes a sinking...
A company estimates that it will need $139,000 in 18 years. if it eatablishes a sinking fund hy making fixed monthly payments into an account paying 5.4% compounded monthly, how much should each payment be? The amount of each payment should be:?? (Round to the nearest cent)
Newport Corp. is considering the purchase of a new piece of equipment. The cost savings from...
Newport Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $203,000. The equipment will have an initial cost of $994,000 and have a 6 year life. There is no salvage value for the equipment. If the hurdle rate is 7%, what is the approximate net present value? Ignore income taxes. (Future Value of $1, Present Value of $1, Future Value Annuity of...
Grady Corp. is considering the purchase of a new piece of equipment. The equipment costs $51,500,...
Grady Corp. is considering the purchase of a new piece of equipment. The equipment costs $51,500, and will have a salvage value of $5,040 after six years. Using the new piece of equipment will increase Grady’s annual cash flows by $6,190. Grady has a hurdle rate of 12%. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor from the PV tables.) a. What is the present value of...
Wilson Corp. is considering the purchase of a new piece of equipment. The cost savings from...
Wilson Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in net income after tax of $54,000. The equipment will have an initial cost of $622,000 and have an 8 year life. The salvage value of the equipment is estimated to be $94,000. If the hurdle rate is 11%, what is the approximate net present value? (Future Value of $1, Present Value of $1, Future Value...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT