Reference no: EM132566372

Question 1: On July 1, 2010, a customer has agreed to make six, $2,000 quarterly cash payments staring October 1, 2010 and $6,000 on July 1, 2013 in exchange for a piece of equipment that cost you $12,000. If the annual interest rate is 8% and the how much profit did you earn on the sale of the equipment?

Question 2: Badger Corp is trying to decide whether to buy a new machine with a price of $40,000. Their analysis indicates the machine will generate annual cash flows of $11,000 for each of the next 6 years. The rate of return expected of any investment Badger make is 9%. Should Badger purchase the machine?

Question 3: You have just purchased a new Corvette Convertible for $52,000. You have paid $5,000 down and have financed the rest. The financing arrangement calls for you to make monthly payments for the next 5 years at an 8% interest rate. What will be the amount of your payment?

Question 4: Casey Cohen would like to have $24,500 in 5 years time to buy a car. The amount that Cohen would have to invest today, assuming an interest rate of 4% compounded annually, in order to reach his goal is