How much money needs to be deposited in the bank

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Reference no: EM132053207

1. You have to pay $ 1,000 rent at the beginning of each month for 1 year, after which you’ll be going abroad. You want your parents to put in the bank an amount that will cover your rent for the year. The bank pays 6% return compounded monthly. How much money needs to be deposited in the bank?

Please provide an explanation.

2. You purchased a machine at $3,000,000. It will be fully depreciated using straight line depreciation over the next 5 years. There is no maintenance cost or salvage value. The discount rate is 8%.

What is the NPV of your cost (write down the absolute value)? Your tax rate is 30% (Hint: tax rate matters when you discount future cash flows)

Please round up your answer to integer.

Reference no: EM132053207

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