Reference no: EM132782830

Problem - For all time value of money calculations, use time value of money factors with at least four decimal places and then round your final answer to the nearest whole dollar.

Required: answer each of the following questions, which are independent from each other.

1. Southwest Real Estate, Inc. is considering two sites for its latest project, a mixed-use residential and retail shopping development. The company's management has put together the following cash flow estimates and other data for each project:

What is the cash payback period for each site (rounded to two decimal places)? What is the net present value (NPV) of each site and which site (if any) would be the preferred investment?

2. You recently received a birthday gift of $1,500 and you decide to save it for later use. If you deposit it into an investment account that pays 6% interest, how much will be in the account in 3 years?

3. You have recently opened a retirement account and decided to deposit $4,000 a year in the account. If you want to retire in 45 years and the account earns 8 percent interest, how much will you have in your account when you retire?

4. The Smith Company borrowed $20,000 from a local bank in 2018 at an interest rate of 8 percent that will be repaid in full at the end of the three-year term. What is the tabular analysis (related to the loan) of the transactions the company would record?

5. If you are able to earn 4% interest, what amount would you need to invest to have $850 two years from now?

6. You plan to finance the purchase of a new house with a bank loan of $225,000; the terms of the loan include an interest rate of 4 percent and a 15-year term. What would your annual mortgage payment be? How much interest will you pay over the life of the loan?