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APPENDIX B
EXERCISES
B2. 1. $17,805 ($10,050 1.7716, Table I), or ($10,050 0.5645, Table II)
Business Calculator Keystrokes:
10050Press PV
6Press N
10Press I
Press FV for the answer = $17,804.1881 = $17,804 (rounded)
9053Press PV
8Press N
8Press I
Press FV for the answer = $16,756.4712 = $16,756 (rounded)
B2. (Concluded)
B3. 1. $9,413 ($17,000 1.8061, Table I), or ($17,000 0.5537, Table II)
Business Calculator Keystrokes:
17000Press FV
20Press N
3Press I
Press PV for the answer = $9,412.4878 = $9,412 (rounded)
11410Press FV
30Press N
6Press I
Press PV for the answer = $1,986.5966 = $1,987 (rounded)
100
Appendix B 101
B3. (Concluded)
B11. 1. $24,005 ($5,000 4.8010, Table I), or ($5,000 0.2083, Table II)
Business Calculator Keystrokes:
5000Press PV
40Press N
4Press I
Press FV for the answer = $24,005.1031 = $24,005 (rounded)
B12. (Concluded)
B13. 4% ($2,500 $2,404 1.0400, Table I), or ($2,404 $2,500 0.9615, Table II)
Annual Rate = 4% 2 = 8%
Business Calculator Keystrokes:
2404Press PV (enter as a negative number, signifying an initial cash
outflow)
2500Press FV
1Press N
Press I for the answer = 3.9933% = 4% (rounded) 2 = 8%
Appendix B 107
B14. Option A = $40,879 ($5,700 3.3121 = $18,879, Table IV; $18,879 + $22,000)
Business Calculator Keystrokes:
5700Press PMT
4Press N
8Press I
Press PV for the answer = $18,879.1230 = $18,879 (rounded) + $22,000 =
$40,879
Other things being equal, Foot Loose should purchase from Do-It-Yourself
Machines (Option B).
Other things being equal, Park City should choose Plan B because it
would earn slightly more rent revenue. However the cost of processing
monthly checks might exceed the extra revenue received.
108 Appendix B
1 (1 0.01) $250,000
B16. 1. a. 120
= 69.7005; = $3,586.77
0.01 69.7005
1 (1 0.13) $250,000
b. 10
= 5.4262; = $46,072.76
0.13 5.4262
If you were the purchaser, you would choose Plan Apay $375 cash for the
new freezer. If you were the seller, you would want the customer to choose
Plan B8 monthly payments of $55.
Appendix B 109
B18. $46,259 ($14,000 5.5824 = $78,154, Table IV; $78,154 1.6895 = $46,259,
Table 1), or ($14,000 5.9173 = $82,842, Table VI; $82,842 0.5584 =
$46,259, Table II)
Business Calculator Keystrokes:
14000Press PMT
7Press N
6Press I
Press PV for the answer = $78,153.3402 = $78,153 (rounded)
This yields the present value of the annuity 1 period before the first
payment is made. To calculate the present value now, the sum must be
discounted 9 more periods.
78153Press FV
9Press N
6Press I
Press PV for the answer = $46,258.6406 = $46,259 (rounded)