Problem
I. What is the value of $16,000 to be received in 3 years if the cost of capital is 8%?
II. ELI Co. is reviewing a new forklift that would allow them to increase productivity by $3,000 year 1, $4,000 year 2, $4,000 year , and $2,000 year 4. Their cost of capital is 9%. What is the most they should pay for the forklift?
III. If I invest in a retirement account with $20,000 today plus an additional $2400 per year for the next 20 years at an expected 8% return what will I have in my investment account at the end of the 20 years? Remember to negative cash outflows. If return is 5% instead what will be the investment account total?
IV. You want to retire in 30 years and have $200,000 in your investment account now. You plan to invest $8400 per year towards your retirement. If you earn an average 6% return how much will you have in your account when you retire?