Professional Documents
Culture Documents
Combining Factors: Solutions To Problems
Combining Factors: Solutions To Problems
Combining Factors
Solutions to Problems
3.1 P = 100,000(260)(P/A,10%,8)(P/F,10%,2)
= 26,000,000(5.3349)(0.8264)
= $114.628 million
3.2 P = 50,000(56)(P/A,8%,4)(P/F,8%,1)
= 2,800,000(3.3121)(0.9259)
= $8.587 million
3.9 A = 20,000(P/A,8%,4)(A/F,8%,14)
= 20,000(3.3121)(0.04130)
= $2735.79
PROPRIETARY MATERIAL. © The McGraw-Hill Companies, Inc. All rights reserved. No part of this Manual may be
displayed, reproduced or distributed in any form or by any means, without the prior written permission of the publisher, or used
beyond the limited distribution to teachers and educators permitted by McGraw-Hill for their individual course preparation. If you are
a student using this Manual, you are using it without permission.
= $1902
3.11 A = 20,000(F/P,8%,1)(A/P,8%,8)
= 20,000(1.08)(0.17401)
= $3758.62
3.12 A = 10,000(F/A,8%,26)(A/P,8%,30)
= 10,000(79.9544)(0.08883)
= $71,023
3.13 A = 15,000(F/A,8%,9)(A/F,8%,10)
= 15,000(12.4876)(0.06903)
= $12,930
3.18 F = 10,000(F/A,15%,21)
= 10,000(118.8101)
= $1,188,101
PROPRIETARY MATERIAL. © The McGraw-Hill Companies, Inc. All rights reserved. No part of this Manual may be
displayed, reproduced or distributed in any form or by any means, without the prior written permission of the publisher, or used
beyond the limited distribution to teachers and educators permitted by McGraw-Hill for their individual course preparation. If you are
a student using this Manual, you are using it without permission.
= $123.90
3.25 Move unknown deposits to year –1, amortize using A/P, and set equal to $10,000.
x(F/A,10%,2)(F/P,10%,19)(A/P,10%,15) = 10,000
x(2.1000)(6.1159)(0.13147) = 10,000
x = $5922.34
A = 22,994(A/P,12%,8)
= 22,994(0.20130)
= $4628.69
Chapter 3 3
PROPRIETARY MATERIAL. © The McGraw-Hill Companies, Inc. All rights reserved. No part of this Manual may be
displayed, reproduced or distributed in any form or by any means, without the prior written permission of the publisher, or used
beyond the limited distribution to teachers and educators permitted by McGraw-Hill for their individual course preparation. If you are
a student using this Manual, you are using it without permission.
3.29 F = 2500(F/A,12%,8)(F/P,12%,1) – 1000(F/A,12%,3)(F/P,12%,2)
= 2500(12.2997)(1.12) – 1000(3.3744)(1.2544)
= $30,206
3.30 15,000 = 2000 + 2000(P/A,15%,3) + 1000(P/A,15%,3)(P/F,15%,3) + x(P/F,15%,7)
15,000 = 2000 + 2000(2.2832) + 1000(2.2832)(0.6575) + x(0.3759)
x = $18,442
PROPRIETARY MATERIAL. © The McGraw-Hill Companies, Inc. All rights reserved. No part of this Manual may be
displayed, reproduced or distributed in any form or by any means, without the prior written permission of the publisher, or used
beyond the limited distribution to teachers and educators permitted by McGraw-Hill for their individual course preparation. If you are
a student using this Manual, you are using it without permission.
= [22,000(3.0373) + 1000(4.1273) + 22,000](0.8929)
= $82,993
A = 82,993(A/P,12%,5)
= 82,993(0.27741)
= $23,023
A = 27,303.69(A/P,15%,7)
= 27,303.69(0.24036)
= $6563
PROPRIETARY MATERIAL. © The McGraw-Hill Companies, Inc. All rights reserved. No part of this Manual may be
displayed, reproduced or distributed in any form or by any means, without the prior written permission of the publisher, or used
beyond the limited distribution to teachers and educators permitted by McGraw-Hill for their individual course preparation. If you are
a student using this Manual, you are using it without permission.
= 1.1542(0.8696)
= $1.004 billion
A = 261,064(A/P,10%,6)
= 261,064(0.22961)
= $59,943
P = 132,290(F/P,14%,1)
= 132,290(1.14)
= $150,811
P = 58,304(F/P,16%,1)
= 58,304(1.16)
= $67,632
PROPRIETARY MATERIAL. © The McGraw-Hill Companies, Inc. All rights reserved. No part of this Manual may be
displayed, reproduced or distributed in any form or by any means, without the prior written permission of the publisher, or used
beyond the limited distribution to teachers and educators permitted by McGraw-Hill for their individual course preparation. If you are
a student using this Manual, you are using it without permission.
F = 1,166,667(F/P,8%,6)
= 1,166,667(1.5869)
= $1,851,383
A = 15,115(A/P,10%,10)
= 15,115(0.16275)
= $2459.97
FE Review Solutions
3.54 x = 4000(P/A,10%,5)(P/F,10%,1)
= 4000(3.7908)(0.9091)
= $13,785
Chapter 3 7
PROPRIETARY MATERIAL. © The McGraw-Hill Companies, Inc. All rights reserved. No part of this Manual may be
displayed, reproduced or distributed in any form or by any means, without the prior written permission of the publisher, or used
beyond the limited distribution to teachers and educators permitted by McGraw-Hill for their individual course preparation. If you are
a student using this Manual, you are using it without permission.
Answer is (d)
3.55 P = 7 + 7(P/A,4%,25)
= $116.3547 million
Answer is (c)
A = 8498.22(A/P,10%,10)
= 8498.22(0.16275)
= $1383.08
Answer is (c)
PROPRIETARY MATERIAL. © The McGraw-Hill Companies, Inc. All rights reserved. No part of this Manual may be
displayed, reproduced or distributed in any form or by any means, without the prior written permission of the publisher, or used
beyond the limited distribution to teachers and educators permitted by McGraw-Hill for their individual course preparation. If you are
a student using this Manual, you are using it without permission.
= $40,185
Answer is (b)
Chapter 3 9
PROPRIETARY MATERIAL. © The McGraw-Hill Companies, Inc. All rights reserved. No part of this Manual may be
displayed, reproduced or distributed in any form or by any means, without the prior written permission of the publisher, or used
beyond the limited distribution to teachers and educators permitted by McGraw-Hill for their individual course preparation. If you are
a student using this Manual, you are using it without permission.
Extended Exercise Solution
Solution by Hand
Cash flows for purchases at g = –25% start in year 0 at $4 million. Cash flows for parks
development at G = $100,000 start in year 4 at $550,000. All cash flow signs in the
solution are +.
Cash flow________
Year Land Parks
0 $4,000,000
1 3,000,000
2 2,250,000
3 1,678,000
4 1,265.625 $550,000
5 949,219 650,000
6 750,000
P = 4 + 3(P/F,7%,1) + … + 0.750(P/F,7%,6)
= 13.1716 ($13,171,600)
A = (13.1716 – 3.0)(A/P,7%,2)
= (10.1716)(0.55309)
= 5.6258 ($5,625,800 per year)
2. Find remaining project fund needs in year 3, then find the A for the next 3 years
(years 4, 5, and 6):
F3 = (13.1716 – 3.0)(F/P,7%,3)
= (10.1716)(1.2250)
= 12.46019
A = 12.46019(A/P,7%,3)
= 12.46019(0.38105)
= 4.748 ($4,748,000 per year)
Chapter 3 10
PROPRIETARY MATERIAL. © The McGraw-Hill Companies, Inc. All rights reserved. No part of this Manual may be
displayed, reproduced or distributed in any form or by any means, without the prior written permission of the publisher, or used
beyond the limited distribution to teachers and educators permitted by McGraw-Hill for their individual course preparation. If you are
a student using this Manual, you are using it without permission.
Extended Exercise Solution
Solution by computer
Chapter 3 11
PROPRIETARY MATERIAL. © The McGraw-Hill Companies, Inc. All rights reserved. No part of this Manual may be
displayed, reproduced or distributed in any form or by any means, without the prior written permission of the publisher, or used
beyond the limited distribution to teachers and educators permitted by McGraw-Hill for their individual course preparation. If you are
a student using this Manual, you are using it without permission.