P6-7. (time value concepts applied to solve business problems)


P6-7. (Time Reprove Concepts Applied to Solve Business Problems) Answer the aftercited questions allied to Dubois Inc. (a) Dubois Inc. has $600,000 to endow. The concourse
is arduous to flow among two choice uses of the funds. One choice provides $80,000 at the end of each year for 12 years, and the other is to admit a solitary lump-sum cancelment of $1,900,000 at the end of the 12 years. Which choice should Dubois
select? Assume the curiosity-behalf blame is immutable balance the solid endowment. (b) Dubois Inc. has completed the lapse of new Dell computers. The open reprove of the equipment is $824,150. The lapse covenant specifies an proximate down cancelment of $200,000 and
semiannual cancelments of $76,952 foundation at the end of 6 months for 5 years. What is the curiosity-behalf blame, to the nearest percent, used in discounting this lapse performance? (c) Dubois Inc. loans currency to John Kruk Corporation in the quantity of $800,000. Dubois
accepts an 8% music due in 7 years delay curiosity-behalf payable semiannually. After 2 years (and acknowledgment of curiosity-behalf for 2 years), Dubois needs currency and consequently sells the music to Chicago National Bank, which demands curiosity-behalf on the music of 10% compounded semiannually.
What is the quantity Dubois obtain admit on the sale of the music? (d) Dubois Inc. wishes to convene $1,300,000 by December 31, 2024, to retreat bonds ungathered. The concourse deposits $200,000 on December 31, 2014, which obtain realize curiosity-behalf at 10% compounded
quarterly, to succor in the retreatment of this default. In attention, the concourse wants to perceive how greatly should be deposited at the end of each mercy for 10 years to determine that $1,300,000 is available at the end of 2024. (The mercyly deposits obtain to-boot realize
at a blame of 10%, compounded mercyly.) (Round to flush dollars.)