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Draw cash flow diagram for example 7-9 Solve que...

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Accounting

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Draw cash flow diagram for example 7-9

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Solve que 4 in excel

Example 7-9 Insurance should be paid each quarterly periods. Pay for liability insurance: $10,000/quarter or $35,000/year What is rate of return for paying annually? NPW (Annual payment) NPW (Quarterly payments) -35,000 = -10,000 - 10,000(P/A, iqtr, 3) (P/A,iqtr, 3) = 2.5 (P/A, 9%,3) = 2.531; (P/A, 10%, 3) = 2.487 By interpolation, iqtr = 9.705% Annual effective rate = (1 +9.705%)*-1 = 44.8% Copyright Ouders University Press 2017 hanno drawn flaw dinarom far var 4. Excel for -40k+6k(P/F, i, 24) = -2.5k (P/A, i, 24) Example 7-9 Insurance should be paid each quarterly periods. Pay for liability insurance: $10,000/quarter or $35,000/year What is rate of return for paying annually? NPW (Annual payment) NPW (Quarterly payments) -35,000 = -10,000 - 10,000(P/A, iqtr, 3) (P/A,iqtr, 3) = 2.5 (P/A, 9%,3) = 2.531; (P/A, 10%, 3) = 2.487 By interpolation, iqtr = 9.705% Annual effective rate = (1 +9.705%)*-1 = 44.8% Copyright Ouders University Press 2017 hanno drawn flaw dinarom far var 4. Excel for -40k+6k(P/F, i, 24) = -2.5k (P/A, i, 24)

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