Reference no: EM133106784
Questions -
Q1. Shamrock Inc. was supposed to have received a payment of $22,000, 3 years ago, and $10,000, 2 years ago, from a customer who could not make either payment as scheduled. If the customer would like to settle both payments today, what amount would he have to pay Shamrock Inc. if interest of 3.18% compounded quarterly is charged?
Q2. What three equal payments, one in 2 years, one in 5 years, and one in 7 years would replace one single payment of $36,000 due today at an interest rate of 5.52% compounding monthly?
Q3. When Pacific Inc. bid for a project with the government, the company was offered the following two payment options:
Option (A): A payment of $725,000 at the end of 5 years, which is the scheduled completion time for the project.
Option (B): $135,000 paid upfront at the beginning of the project and the balance payment in 5 years.
If the two payments are financially equivalent and the interest rate is 3.96% compounded quarterly, calculate the balance payment offered in Option(B).
Q4. What equal payments in 3 years and 4 years would replace payments of $35,000 and $62,500 in 6 years and 8 years, respectively? Assume money can earn 4.20% compounded quarterly.
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What will the total net present value be
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