which of the following best describes costs assigned to the

??39% D Tue 5:48 PM a File Edit View History Bookmarks People Window Help D Degree Planning i x . D MyPath Home Appendix 8?0 The Magic Check x ?Aa-kirnberty.isx?G rsvp iskra TN-Go x x × low/connect.htm Secure https:/ okmarks imported FromIE , Facebook Campus parent Por -AOL com . News, S swa Actions-Lex ,Youtube Brain Games & Brai Paul Laurence Dun. Saved Help Save & Exit Submit Appendix 8 Check my work 2 sing to make four payments of $13,000 each on November 1, 2016; May 1, 2017; Otto Co. borrows money on April 30, 2016, by promi November 1, 2017; and May 1, 2018. (PV of $1, EV of $1, PVA of $1, and EVA of $1) (Use appropriate factor(s) from the tables provided Round your answers to nearest whole dollar. Round \"Table Factor\" to 4 decimals.) How much money is Otto able to borrow if the interest rate is 8%, compounded semiannually? points Flow Table Factor $ 13,000 x Present Value Hint 47.1 KPrex 2 of 3 Next> Show A BraShootBio Inser...docx

Solution

1)How much money is otto able to borrow if the interest rate is 8% compounded semi annually:- Since interest is compounded semi annually interest rate is 4% Year Cash flow PVF@4% Discounted Cash flow 1                                  13,000.00 0.9615          12,499.50 2                                  13,000.00 0.9246          12,019.80 3                                  13,000.00 0.8889          11,555.70 4                                  13,000.00 0.8548          11,112.40 the amount otto is able to borrow at 8 % compounded semiannually          47,187.40 2)How much money is otto able to borrow if the interest rate is 12% compounded semi annually:- Since interest is compounded semi annually interest rate is 6% Year Cash flow PVF@6% Discounted Cash flow 1                                  13,000.00 0.9434          12,264.20 2                                  13,000.00 0.8899          11,568.70 3                                  13,000.00 0.8396          10,914.80 4                                  13,000.00 0.7921          10,297.30 the amount otto is able to borrow at 12 % compounded semiannually          45,045.00 3)How much money is otto able to borrow if the interest rate is 16% compounded semi annually:- Since interest is compounded semi annually interest rate is 8% Year Cash flow PVF@8% Discounted Cash flow 1                                  13,000.00 0.9259          12,036.70 2                                  13,000.00 0.8573          11,144.90 3                                  13,000.00 0.7938          10,319.40 4                                  13,000.00 0.735            9,555.00 the amount otto is able to borrow at 16 % compounded semiannually          43,056.00