see attached
Questions Type your name here, Last Name First Time Value of Money - Exercises 6.1. Future Value You have received $100,000 from your grandparents to be used for your graduate studies. You plan to start a program in 5 years. You can invest the money at 6% interest, compounded annually. How much will you have in 5 years? 6.2. Annuity and Mortgage Contract Mobile Health needs to replace its mobile medical unit to continue providing diagnostic services and preventative medicine to city residents. The van costs $120,000, and a bank is willing to lend the nonprofit the money at a 6% interest rate for 5 years. Payments are due at the end of each month, and interest is compounded monthly. How much should you budget for the monthly payment? 6.3. The Department of Corrections (DOC) needs to replace two of its prison transport buses. There are two companies that have a track record of making reliable vehicles, and both make a bus that meets the needs of the department. The DOC pays an 8% interest rate on money it borrows. The bus from Company A has a purchase price of $105,000 and a 10-year service life expectancy, and it averages $2,000 per year in maintenance costs. The bus from Company B has a purchase price of $110,000 and a 10-year service life expectancy, and it averages $1,500 per year in maintenance costs. Which bus should the Department of Corrections select? 6.4. The information technology (IT) department has recently completed a major refurbishment and upgrade of the city’s data center, at a cost of $10,145,825. The chief information officer (CIO) has informed the central budget office that the IT department will need to do the same kind of upgrade in 5 years, and he expects the total cost of that project to be 10% more than this year’s project, accounting for better future technology and future increases in costs. The city does not expect to have enough funding available to pay for the refurbishment in 5 years and must put money away during each of the next 4 years to meet this need. How much money should the city put aside in each of the next 4 years to be able to pay for the data center refurbishment 5 years from now, assuming the city can invest the money at a 4.5% interest rate? 6.5. The local community center has been notified that it is the beneficiary of an endowment. The community center can accept cash today in the amount of $550,000 or receive $875,000 in 5 years. The community center expects to be able to invest the money at a 5% interest rate if it were to take the money now. Should it take the money now or wait? 6.6. The municipal golf course has made a budget request to remodel and upgrade the clubhouse. The project will cost $7,200,000, based on reliable estimates. The additional annual operating expenses after the upgrade are expected to be $200,000 per year. An analysis of the experiences of other municipal golf courses reveals an expected revenue increase of $1 million per year after the upgrade. The useful life of the upgraded clubhouse is estimated at 9 years, and the golf course expects to get a loan for the renovations at an interest rate of 4.25%. Should the renovations be approved? x Type your name here, Last Name First Please enter your name on the first page Exercises 6.1 6.2 6.4 6.5 To show the cell checking, put a check here:xPercent Correct this sheet0% Exercise 6.1Exercise 6.2Exercise 6.4Exercise 6.5Grade in Points (All Sheets)0.00 100000PV$ 120,000PVCurrent Refresh$ 10,145,825FV$ 875,000 1Unit Constant5YearsExpected Cost$ 11,160,407.50Rate5.0% 0.06interest0.06Annual InterstYears5Please enter your name on the first page 5Years12Months (Constant)FVDenominatorShow denominator to show that you did the math 1Unit ConstantRatePV FVYears CalculationsDenominatorExcel f(x)now, use the Excel function to get the same result PeriodsPMT Periodic Interest Interest Rate Expression = (1 + i)Select Denominator Expression = [(1 – (1/(1 + i)n))/i]Excel f(x) Wait Payment: This is the budget amountDon't Wait Select: Monthly Annual Once Check FALSEresult not revealed Grading 00000 000 000 000 00 0 0 17 Exercise 6.3 To show the cell checking, put a check here:xPlease enter your name on the first pagePercent Correct this sheet0% Company ACompany BGrade in Points (All Sheets)0.00 Year 0$ 105,000$ 110,000 Year 1$ 2,000$ 1,500 Year 2$ 2,000$ 1,500 Year 3$ 2,000$ 1,500 Year 4$ 2,000$ 1,500 Year 5$ 2,000$ 1,500 Year 6$ 2,000$ 1,500 Year 7$ 2,000$ 1,500 Year 8$ 2,000$ 1,500 Year 9$ 2,000$ 1,500 Year 10$ 2,000$ 1,500 Rate8.0%8.0% Periods1010 NumeratorReveal Numerator PV Select with x Excel f(x) Self Checking Grade 000 700 000 Exercise 6.6 To show the cell checking, put a check here:xPercent Correct this sheet0% YearCash OutCash InNet Cash FlowPresent ValueGrade in Points (All Sheets)0.00 0$ (7,200,000.00)$ - 0 1$ (200,000.00)$ 1,000,000.00 2$ (200,000.00)$ 1,000,000.00 3$ (200,000.00)$ 1,000,000.00 4$ (200,000.00)$ 1,000,000.00 5$ (200,000.00)$ 1,000,000.00 6$ (200,000.00)$ 1,000,000.00 7$ (200,000.00)$ 1,000,000.00 8$ (200,000.00)$ 1,000,000.00 9$ (200,000.00)$ 1,000,000.00 Rate4.25% Excel f(x)YesNoPlease enter your name on the first page Should the renovations be approved? Self Checking Grade 0000 2400 00 00 00 00 00 00 00 00 000 Answers 1,2,4,5 Problem 1Problem 2Problem 4Problem 5 100000PV$ 120,000PVCurrent Refresh$ 10,145,825FV$ 875,000 1Unit Constant5YearsExpected Cost$ 11,160,407.50Rate5.0% 0.06interest0.06Annual InterstYears5 5Years12Months (Constant)FV$ 11,160,407.50Denominator1.2762815625 1Unit ConstantRate4.5%PV$ 685,585.40 133,823FVYears4 CalculationsDenominator4.278191125Excel f(x)$685,585.40 60PeriodsPMT$ 2,608,674.36 0.005Periodic InterestWait for the $875,000 1.005Interest Rate Expression = (1 + i) FV = pv * (1 + i)n51.73Denominator Expression = [(1 – (1/(1 + i)n))/i]Excel f(x) $2,608,674.36Select $ 2,319.94Payment: This is the budget amountWaitx Select:Don't Wait xMonthly Annual Once Answer 3 Company ACompany B Year 0$ 105,000$ 110,000 Year 1$ 2,000$ 1,500 Year 2$ 2,000$ 1,500 Year 3$ 2,000$ 1,500 Year 4$ 2,000$ 1,500 Year 5$ 2,000$ 1,500 Year 6$ 2,000$ 1,500 Year 7$ 2,000$ 1,500 Year 8$ 2,000$ 1,500 Year 9$ 2,000$ 1,500 Year 10$ 2,000$ 1,500 Rate8.0%8.0% Periods1010 Numerator1,074805Reveal Numerator PV$ 118,420$ 120,065 Select with xx Excel f(x)$ 118,420$ 120,065 Answer 6 YearCash OutCash InNet Cash FlowPresent Value 0$ (7,200,000.00)$ - 0$ (7,200,000.00)$ (7,200,000.00) 1$ (200,000.00)$ 1,000,000.00$ 800,000.00$ 767,386.09 2$ (200,000.00)$ 1,000,000.00$ 800,000.00$ 736,101.77 3$ (200,000.00)$ 1,000,000.00$ 800,000.00$ 706,092.82 4$ (200,000.00)$ 1,000,000.00$ 800,000.00$ 677,307.26 5$ (200,000.00)$ 1,000,000.00$ 800,000.00$ 649,695.22 6$ (200,000.00)$ 1,000,000.00$ 800,000.00$ 623,208.84 7$ (200,000.00)$ 1,000,000.00$ 800,000.00$ 597,802.24 8$ (200,000.00)$ 1,000,000.00$ 800,000.00$ 573,431.41 9$ (200,000.00)$ 1,000,000.00$ 800,000.00$ 550,054.11 $ - 0$ (1,318,920.24) Rate4.25% Excel f(x)-1318920.23846537 YesNo Should the renovations be approved?x Grade Worksheet 2Total Points AvailableItem Grade WeightxA mark here makes the numbers in the grade calculation visible. 0.25Base Points (for trying this exercise) 0Manual Points 1.75Points to be graded 0Percent all sheets 0.00Graded Points If these cells are blank, there are no cells requiring manual grading 0.25Initial Grade0 0.1Minimum Earned Points 0.35Threshold 0.00GradeGrade Table A100% B90% C80% D70% F0% 0 48