Solution manual financial accounting 4e by wild appendix b

To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Appendix B Applying Present and Future Values QUICK STUDIES Quick Study B-1 (10 minutes) 2% 12% 3% 1% Quick Study B-2 (10 minutes) In Table B.1, where n = 15 and p = $2,745/$10,000 = 0.2745, the i = 9% Quick Study B-3 (10 minutes) In Table B.1, where i = 6% and p = $6,651/$10,000 = 0.6651, the n = Quick Study B-4 (10 minutes) In Table B.1, where n = and i = 9%, the p = 0.6499 Amount willing to pay today: 0.6499 x $140,000 = $90,986 Quick Study B-5 (10 minutes) In Table B.2, where n = 10 and i = 12%, the f = 3.1058 Cash proceeds at liquidation: 3.1058 x $630,000 = $1,956,654 ©McGraw-Hill Companies, 2008 Solutions Manual, Appendix B 717 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Quick Study B-6 (10 minutes) In Table B.3, where n = and i = 7%, the p = 4.7665 Amount willing to pay for the project: 4.7665 x $150,000 = $714,975 Quick Study B-7 (10 minutes) In Table B.4, where n = 30 and i = 10%, the f = 164.494 Ending value of the investment program: 164.494 x $1,500 = $246,741 EXERCISES Exercise B-1 (10 minutes) In Table B.2, where i = 12% and f = $96,463/$10,000 = 9.6463, the n = 20 (implies the investor must wait 20 years before payment) Exercise B-2 (10 minutes) In Table B.2, where n = 25 and f = $108,347/$10,000 = 10.8347, the i = 10% (investor must earn 10% interest to achieve investment goal) Exercise B-3 (10 minutes) In Table B.3, where n = and p = $57,466/$10,000 = 5.7466, the i = 8% (investor must earn 8% interest to achieve investment goal) Exercise B-4 (10 minutes) In Table B.3, where i = 10% and p = $82,014/$10,000 = 8.2014, the n = 18 (investor expects 18 annual payments to be received) ©McGraw-Hill Companies, 2008 718 Financial Accounting, 4th Edition To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Exercise B-5 (10 minutes) In Table B.4, where n = 40 and f = $154,762/$1,000 = 154.762, the i = 6% (investor must earn a 6% rate of interest) Exercise B-6 (10 minutes) In Table B.4, where i = 8% and f = $303,243/$10,000 = 30.3243, the n = 16 (investor must make 16 annual payments to achieve investment goal) Exercise B-7 (10 minutes) Interest rate per period = 12% annual / 12 months per year = 1% per month Using Table B.3, where n = 40 and i = 1%, the p = 32.8347 This means: Loan balance $16,417.35 (present value of loan = 32.8347 x $500) Down payment 6,500.00 (cash) Total cost $22,917.35 Exercise B-8 (15 minutes) Semiannual interest payment = $500,000 x 10% x 1/2 = $25,000 Using Table B.1, where n = 30 and i = 4%, the p = 0.3083 (Principal payment) Using Table B.3, where n = 30 and i = 4%, the p = 17.2920 (Interest payments) 0.3083 x $500,000 = 17.2920 x $ 25,000 = $154,150 present value of maturity amount 432,300 present value of interest payments $586,450 cash proceeds Exercise B-9 (15 minutes) In Table B.1, where n = and i = 10%, the p = 0.5645 Present value of investment = $606,773 x 5645 = $342,523 Exercise B-10 (15 minutes) $90,000 x 0.6651 (using Table B.1, i = 6%, n = 7) = $59,859 $20,000 x 2.4869 (using Table B.3, i = 10%, n = 3) = $49,738 ©McGraw-Hill Companies, 2008 Solutions Manual, Appendix B 719 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Exercise B-11 (15 minutes) Amount borrowed = present value of $20,000 at 10% for years = $20,000 x 0.7513 (using Table B.1, i = 10%, n = 3) = $15,026 Exercise B-12 (10 minutes) Single Future Payment a $40,000 b 75,000 c 52,000 d 18,000 e 63,000 f 89,000 Number of Periods Exercise B-13 (25 minutes) First Annuity Future Payment First payment $5,000 Second payment 5,000 Third payment 5,000 Fourth payment 5,000 Fifth payment 5,000 Sixth payment 5,000 Total borrowed Interest Rate 4% 10 Number of Periods Table B.1 Value 0.8890 0.5835 0.4241 0.9246 0.6274 0.9057 Amount Borrowed $35,560 $43,763 $22,053 $16,643 $39,526 $80,607 Interest Rate 6% 6 6 Table B.1 Value 0.9434 0.8900 0.8396 0.7921 0.7473 0.7050 Amount Borrowed $ 4,717 4,450 4,198 3,961 3,737 3,525 $24,588 Interest Rate 6% 6 Table B.1 Value 0.9434 0.8900 0.8396 0.7921 Amount Borrowed $ 7,076 6,675 6,297 5,941 $25,989 Second Annuity First payment Second payment Third payment Fourth payment Total borrowed Future Payment $7,500 7,500 7,500 7,500 Number of Periods ©McGraw-Hill Companies, 2008 720 Financial Accounting, 4th Edition To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Exercise B-13 (Continued) First Annuity Payment size $ 5,000 Number of payments Interest rate 6% Value from Table B.3 4.9173 Present value of the annuity $24,587 (difference from part (1) due to rounding) Second Annuity Payment size $ 7,500 Number of payments Interest rate 6% Value from Table B.3 3.4651 Present value of the annuity $25,988 (difference from part (1) due to rounding) Exercise B-14 (30 minutes) Present value of the annuity Payment size $13,000 Number of payments Interest rate 4% (semiannual) Value from Table B.3 3.6299 Present value of the annuity $47,189 Present value of the annuity Payment size $13,000 Number of payments Interest rate 6% (semiannual) Value from Table B.3 3.4651 Present value of the annuity $45,046 Present value of the annuity Payment size $13,000 Number of payments Interest rate 8% (semiannual) Value from Table B.3 3.3121 Present value of the annuity $43,057 ©McGraw-Hill Companies, 2008 Solutions Manual, Appendix B 721 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Exercise B-15 (15 minutes) 10 years x quarters = 40 interest periods 8% annual / quarters per year = 2% per quarter In Table B.2, where n = 40 and i = 2%, the f = 2.2080 Total accumulation = 2.2080 x $7,200 = $15,897.60 Exercise B-16 (15 minutes) 12% annual / 12 months per year = 1% per month 2.5 years x 12 months per year = 30 total months In Table B.4, where n = 30 and i = 1%, the f = 34.7849 Total accumulation = 34.7849 x $50 = $1,739.25 Exercise B-17 (15 minutes) 10 years x quarters per year = 40 total quarters 12% annual / quarters per year = 3% per quarter In Table B.2, where n = 40 and i = 3%, the f = 3.2620 In Table B.4, where n = 40 and i = 3%, the f = 75.4013 3.2620 x $100,000 = 75.4013 x $50,000 = $ 326,200 future value of initial investment 3,770,065 future value of periodic investments $4,096,265 future value of fund Exercise B-18 (15 minutes) In Table B.2, where n = and i = 7%, the f = 1.8385 Future value of investment = $163,170 x 1.8385 = $299,988 ©McGraw-Hill Companies, 2008 722 Financial Accounting, 4th Edition To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com Exercise B-19 (20 minutes) a b (1) (2) (3) OR (1) (2) (3) Present Value of a single amount Multiply $10,000 by p from Table B.1 Use Table B.1, periods = and interest rate = 4% (1) (2) (3) OR (1) (2) Future Value of an Annuity Divide $10,000 by f from Table B.4 Use Table B.4, periods = and interest rate = 4% Future Value of a single amount Divide $10,000 by f from Table B.2 Use Table B.2, periods = and interest rate = 4% (3) Present Value of an Annuity Multiply $10,000 by p from Table B.1 and then divide by p from Table B.3 Use Tables B.1 and B.3, periods = and interest rate = 4% c (1) (2) (3) Future Value of an Annuity Multiply $4,000 by f from Table B.4 Use Table B.4, periods = 40 and interest = 8% d (1) (2) (3) Present Value of an Annuity Multiply $30,000 by p from Table B.3 Use Table B.3, periods = 20 and interest = 10% [Note: Students must recognize the present value of $225,000 received today is $225,000.] ©McGraw-Hill Companies, 2008 Solutions Manual, Appendix B 723 ... annual payments to be received) ©McGraw-Hill Companies, 2008 718 Financial Accounting, 4th Edition To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com... Table B.3, i = 10%, n = 3) = $49,738 ©McGraw-Hill Companies, 2008 Solutions Manual, Appendix B 719 To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com... 7,500 7,500 Number of Periods ©McGraw-Hill Companies, 2008 720 Financial Accounting, 4th Edition To download more slides, ebook, solutions and test bank, visit http://downloadslide.blogspot.com