.png){kind=logo}
SOLUTIONS
MANUAL
Kelly Halliday Ali R. Hassanlou Contemporary Business Mathematics with Canadian Applications 13th Edition
- A. Hummelbrunner
Kelly Halliday Ali R. Hassanlou
All Chapters Arranged Reverse: 16-1
This is The Original Solutions Manual for 13th Edition, All other Files in The Market are Fake/Old/Wrong. 1 / 4
Chapter 16 Investment Decision Applications Exercise 16.1
A.1.Alternative 1:
PV of $20,000 in three years 20,000(l.l2 3
) 20,000(0.711780) $14,236
PV of $60,000 in six years 60,000(1.12 6
) 60,000(0.506631) . 30,398
PV of Alternative 1 $44,634 .
Alternative 2:
PV of $13,000 at the end of each of the next six years
13,000
6
1 1.12
0.12 -
é ù-
ê ú ë û
13,000(4.111407) $53,448
Since PV of Alternative 2 > PV of Alternative 1, Alternative 2 is preferred at 12%.
PROGRAMMED SOLUTION
(Set P/Y l; C/Y l) Alt.1 0 PMT 20,000 FV 12 I/Y 3 N CPT PV 14,236 Alt.1 0 PMT 60,000 FV 12 I/Y 6 N CPT PV 30,398 Alt.2 0 FV 13,000 PMT 12 I/Y 6 N CPT PV 53,448
2.Alternative 1:
PV of $50,000 50,000(1.15 4
) 50,000(0.571753) $28,588
PV of $40,000 40,000(l.l5 7
) 40,000(0.375937) 15,037
PV of $30,000 30,000(1.15 10
) 30,000(0.247185) 7416
PV of Alternative 1 51,041 .
Alternative 2:
PMT 750; i 15%; n 120 c 1 12 , p 1 12 1.15
1 1.011715 1 1.1172%
PV of Alternative 2 750 120
1 1.011715
0.011715
-
é ù-
ê ú ë û
750(64.26100) $48,196 .
Since PV of Alternative 1 > PV of Alternative 2, Alternative 1 is preferred.Alt.1(Set P/Y l; C/Y 1) 0 PMT 50,000 FV 15 I/Y 4 N CPT PV 28,588 Copyright © 2025 Pearson Canada Inc. 2 / 4
676 ISM for Hummelbrunner/Halliday/Hassanlou, Contemporary Business Mathematics, Thirteenth Edition Alt.1 0 PMT 40,000 FV 15 I/Y 7 N CPT PV 15,037 Alt.1 0 PMT 30,000 FV 15 I/Y 10 N CPT PV 7416 Alt.2 (Set P/Y l2; C/Y l) 0 FV 750 PMT 15 I/Y 120 N CPT PV 48,196
3.Alternative 1:
PV of $15,000 now $15,000 PV of $20,000 in five years 20,000(l.025 20
) 20,000(0.610271) 12,205
PV of Alternative 1 $27,205 .
Alternative 2:
PV of $1500 at the end of every three months for five years
1500
20
1 1.025
0.025 -
é ù-
ê ú ë û
1500(15.589162) $23,384 .
In this case, “the smaller the better” principle applies.Since PV of Alternative 2 < PV of Alternative 1, Alternative 2 is preferred.Alt.1 (Set P/Y l; C/Y 4) 0 PMT 20,000 FV 10 I/Y 5 N CPT PV 12,205 Alt.2 (Set P/Y 4; C/Y 4) 0 FV 1500 PMT 10 I/Y 20 N CPT PV 23,384
4.Alternative 1:
PMT 2500; i 7%; n 14; c 1 2 1 2 1.07p=
1 1.034408 1 3.4408%
PVn 2500 14
1 1.034408
0.034408
-
é ù-
ê ú ë û
2500(10.964017) $27,410
PV of $10,000 now . 10,000 PV of Alternative 1 $10,000 + $27,410 = $37,410
Alternative 2:
PMT 600; i 7%; n 84; c 1 12 p 1 12 1.07
1 1.005654 1 0.5654%
Copyright © 2025 Pearson Canada Inc. 3 / 4
CHAPTER 16: Investment Decision Applications 677
PVn(due) 600(1.005654) 84
1 1.005654
0.005654
-
é ù-
ê ú ë û
600(1.005654)(66.721382) $40,259
For cost, since PV of Alternative 1 < PV of Alternative 2, Alternative 1 is preferred.Alt.1 (Set P/Y 2; C/Y l) 0 FV 2500 PMT 7 I/Y 14 N CPT PV 27,410.03 AIt.2 (Set P/Y 12; C/Y 1) (“BGN” Mode) 0 FV 600 PMT 7 I/Y 84 N CPT PV
40,259
Copyright © 2025 Pearson Canada Inc.
- / 4
.png)