bm - Present value of $1 for 18 years 0.285 0.250 0.215...

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Financial Accouting 1) Paul Parent is evaluating investment alternatives for saving for his infant daughters college education. He has  estimated that he will need $225,000 upon her graduation from high school in 18 years. Paul has the following  options:  1. Locking in an 8 percent investment with a lump sum payment today  2. Earning a 9 percent return based on annual even contributions over the next 18 years, or  3. Locking in a 7 percent investment for $5,000 and earning a 10% return on even annual contributions.  Paul has the relevant present value tables that show the following factors:  …………………………………. ...…7%……. 8%……….…9%……….10%  Future value of $1 for 18 years 3.379    3.996 4.717       5.559  Future value of an annuity for 18 years   33.999  37.45 41.301       45.599 
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Unformatted text preview: Present value of $1 for 18 years 0.285 0.250 0.215 0.180 Present value of an annuity for 18 years 9.958 9.372 8.787 8.201 Assuming Paul can afford any of these options, which alternative results in the lowest investment? 2) Lisa's Boutique is renting prime store space at the Regional mall and just signed a five-year lease effective January 1, 20X4 with the following terms: Refundable security deposit $1,500 Monthly lease payments $3,000 Lease bonus due at signing $18,000 Lisa has had to make significant renovations to the store prior to moving in. The renovations cost $50,000 and have a useful life of 8 years. Lisa's Boutique will record occupancy expense for the year ended December 31, 20X4 of :...
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This note was uploaded on 09/26/2009 for the course ACC 101 taught by Professor Worfy during the Winter '08 term at Akademia Ekonomiczna w Poznaniu.

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