John and Daphne are saving for their daughter Ellen's college education. Ellen just turned 10 (at t = 0), and she will be entering college 8 years from now (at t = 8). College tuition and expenses at State U. are currently $14,500 a year, but they are expected to increase at a rate of 3.5% a year. Ellen should graduate in 4 years--if she takes longer or wants to go to graduate school, she will be on her own. Tuition and other costs will be due at the beginning of each school year (at t = 8, 9, 10, and 11). So far, John and Daphne have accumulated $15,000 in their college savings account (at t = 0). Their long-run financial plan is to add an additional $5,000 in each of the next 4 years (at t = 1, 2, 3, and 4). Then they plan to make 3 equal annual contributions in each of the following years, t = 5, 6, and 7. They expect their investment account to earn 9%. How large must the annual payments at t = 5, 6, and 7 be to cover Ellen's anticipated college costs? $1,965.21 $2,068.64 $2,177.51 $2,292.12 $2,412.76

Compare the sources of consumer credit 1. consumers use a prearranged loan using special checks 2. consumers use cards with no interest and non -revolving balances 3. consumers pay off debt and credit is automatically renewed 4. consumers take out a loan with a repayment date and have a specific purpose a. travel and entertainment credit b. revolving check credit c. closed-end credit d. revolving credit

Suppose that jim plans to borrow money for an education at texas a& m university. jim will need to borrow $25,000 at the end of each year for the next five years (total=$125,000). jim wishes his parents could pay for his education but they can’t. at least, he qualifies for government loans with a reduced interest rate while he is in school. he has a special arrangement with aggiebank to lend him the money at a subsidized rate of 1% over five years without having to make a payment until the end of the fifth year. however, at the end of the fifth year, jim agrees to pay off the loan by borrowing from longhorn bank. longhorn bank will lend him the money he needs at an annual interest rate of 6%. jim agrees to pay back the longhorn bank with 20 annual payments and the payments will be uniform (equal annual payments including principal and interest). (i) calculate how much money jim has to borrow at the end of 5 years to pay off the loan with aggiebank. a. $121,336 b. $127,525 c. $125,000 d. $102,020 e. none of the above

Newton industries is considering a project and has developed the following estimates: unit sales = 4,800, price per unit = $67, variable cost per unit = $42, annual fixed costs = $11,900. the depreciation is $14,700 a year and the tax rate is 34 percent. what effect would an increase of $1 in the selling price have on the operating cash flow?