Present value and future value charts or formulas are not provided in the material. The book refers to a companion website for present value – deferred annuity but the location of the companion website is not provided either. The exercises can be solved without the use of present- and future-value tables, but the calculations may exceed the abilities of associates-level classes.
These exercises would be better if they were used in conjunction with the textbook that is referenced in the exercises.
Some of the solutions have errors.
- Problem 2: The solution for part (b) lists the variable cost as $56.25, but the amount is actually $23.25.
- Problem 5: The solutions for (c) and (d) are not correct. The amount of the investment (c) should be $4,000, but the solution uses $2,000. For part (d) the amount of the investment is $8,000 but the solution uses $2,000.
- Problem 6: The interest in tpart (d) is 10% compounded semiannually (5%). The solution uses a 4% interest rate.
- Problem 7: Part (b)intent is to compute present value- assuming payments occur at the beginning of the year (annuity due), yet no table or formula for present value – annuity due is provided.
- Problem 8: The information provided states that the investment will yield $25,000 annually in cash flows. However, the solution uses annual cash flows of $17,019.