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Annuity

Student loan calculations

(See attached file for full problem description) 1. John is planning to use student loans to pay for graduate school tuition starting next year. His tuition will be $25,000 a year for three years. The loan program has a 12% annual rate of interest. A. If John borrows to pay all of his tuition, how much will he owe at the

Let's say I just won the lottery.

Let's say I just won the lottery. What is the future value in 10 years of $1,000 payments received at the beginning of each year for the next 10 years? Assume an interest rate of 5.625%.

Financial assignment, some multiple choice questions.

Please see attached file. All things being equal, a longer term bond ( say 20 yrs) carries a bigger risk than a shorter term bond . TRUE What type of derivative contract would a corporation use to covert fixed interest payments to floating rate interest payments ? You want to purchase ATT Preferred Stoc

Present Value of a Bond

You are contemplating the purchase of a 20-year bond that pays $50 in interest each six months. You plan to hold this bond for only 10 years, at which time you will sell it in the market place. You require a 12 percent annual return, but you believe the market will require only an 8 percent return when you sell the bond 10 yea

Financial Analysis

1. A bond is selling for 95% of par and has an annual coupon rate of 6% and will mature in five years. There are semi-annual coupon payments. Calculate the yield-to-maturity. 2. How much money will William have in five years if he places $2500 into a CD earning an annual interest rate of 7.5% compounded annually? 3.

Annuity for a Future Value

Your two children go to college in the future. First goes to college in 10 years from now, and will require $20,000 each year for the four years of college. Second child goes to college 15 years from now, and will need $24,000 each year for the four years of college. You wish to make equal, end of year payments between now and t

Annuity, Linear programming problem

3. A man has amassed $1.5 million for his retirement. It is an account earning interest at an annual rate of 7.32%, with monthly compounding. He decides to pay himself equal amounts at the end of every month for 20 years, depleting the entire original amount. How much is each monthly payment? 6. A nutritionist is planning eve

Bonds- Sinking Funds

Problem 1: Gordon company issued $1,000,000 10 year bonds and agreed to make annual sinking fund deposits of $80,000.00. the deposit are made at the end of each year into an account paying 5% annual intrest. What amount will be in the sinking fund at the end of 10 years? Problem 2: Galway Bay Enterprises issued 10%,8 year,

Please select the best answer True/False and Multiple choice

Please aide me in creating a mock test for my study group Question 1 5 points Save The primary difference between "Financial Accounting" and "Managerial Accounting" is that Managerial Accounting gives an historical perspective. True False Question 2 5 points Save Accounting

Business Finance - Time Value of Money Problem

Mr. Paul "Plan Ahead" Parker has come to you for some retirement planning advice. As a recent college graduate he knows the value of planning ahead (thus his nickname). He wants to know how much he should start putting aside each year so that he will have a sufficient nest egg with which to retire at the age of 65 (40 years away

3 Problems

Be detail as possible and show all work. 2. What is the present value of $200,000 received at the end of every 6 month for the next 8 years at a discount rate of 7%? 5. Find MNO's Weighted Average Cost of capital given the following information: Tax Bracket: 30%

Jay Williams is 35 years old today...

Jay Williams is 35 years old today and is beginning to plan for his retirement. He wants to set aside an equal amount at the end of each month for the next 25 years so that he can retire at age 60. He expects to live to an age of 80 and wants to be able to withdraw $50,000 per year from the account on his sixty-first through eig

Investment, Bond Face Value, NPV Calculations and WACC

1. Janice Smith wishes to accumulate $8,000 by the end of 5 years by making equal annual end-of-year deposits over the next five years. If Janice can earn 7 percent on her investments, how much must she deposit at the end of each year to meet this goal? 2. J& J just issued a bond with a $1,000 face value and a coupon

IMPROPER QUESTIONS OR THINGS

In the company you chose to study, there are likely some kind of informational privacy issues. Get a copy of the employment agreement you signed when you took the job or if you are looking at another company you do not work for, find a copy of an employment agreement for that company. 1. DOES THE COMPANY ASK ANYTHING THAT

Present Value & Interest Rates

What is an example of the "present value" concept? How does a single cash flow present value example differ from an annuity calculation? What is the relationship between interest rates and bond prices

Problem Set

10.2 Suppose you have invested only in two stocks, A and B.The returns on the two stocks de¬pend on the following three states of the economy, which are equally likely to happen: State of probability of return on Economy state occurring Stock B (%) Bear 6.30

Managerial Finance

Babe Ruth Jr. has agreed to play for the Cleveland Indians for $3 million per year the next ten years. What table would you use to calculate the value of this contract in today's dollars? A)Present value of an annuity, B)Present value of a single amount, C)Future value of an annuity, D)None of the above

Problem Set

A. How much can be accumulated for retirement if $2,000 is deposited annually, beginning one year from today, and the account earns 9% interest compounded annually for 40 years? B. After the payment of a 25% stock dividend, and investor has 500 shares of stock and $400 total value. What did the investor have prior to the stoc

Study Question help (6 questions)

1) What's the present value of: a. $9,000 in 7 years at 8 percent? b. $20,000 in 5 years at 10 percent? c. $10,000 in 25 years at 6 percent? d. $1,000 in 50 years at 16 percent? 2) Say you invest $9,000 today, how much will you have: a. In 2 years at 9 percent? b.

Which investment alternative should be chosen

Mark Grace Inc. has $572,000 to invest. The company is trying to decide between two alternative uses of the funds. One alternative provides $80,000 at the end of each year for 12 years, and the other is to receive a single lump sum payment of $1,900,000 at the end of the 12 years. Which alternative should Grace select? Assum

Future and Present Value- Annuities

Use the following information in answering Cases 1 and 2 below: On January 1, 1998, Dodd Company sold $800,000 of 10% bonds, due January 1, 2008. Interest on these bonds is paid on July 1 and January 1 each year. According to the terms of the bond contract, Dodd must establish a sinking fund for the retirement of the bond p

Retirement Plans and ERISA

How can I distinguish around various types of retirement plans? What are the requirements of ERISA that plan sponsors must fulfill? What is the difference between defined contribution and defined benefit retirement plans? What are differences between 401(k) and 401(b) plans? What are the fiduciary responsibility impos

Earnings management

The company X has been in business for 100 years. For the last 3 years this company reported operating losses. The controller identified three areas in which company X has some flexibility in its accounting assumptions: depreciation, bad debts, and pension accounting. How the controller can use accounting assumptions in these

Finance Scenario's

1.) John Longwaite will receive $100,000 in 50 years. His friends are very jealous of him. If the funds are discounted back at a rate of 14 percent, what is the present value of his future "pot of gold"? 2.) Al Lopez invests $2,000 in a mint condition Nolan Ryan baseball card. He expects the card to increase in value by 20 pe

PV of Uneven or Missing Cash Flows

See attached for properly formatted questions. 2. College Ed. saving account (SA). For 2 kids, first kid will start in 5 yrs., second in 7 yrs. Tuition cost $10,000 today, and rising 5% per yr. Tuition is paid out at beginning of yr., both kids in 4-yr programs. SA PV $50,000. Plan fixed contributions over next 5 yrs at end

Applying Time Value

Applying Time Value. You can buy property today for $3 million and sell it in 5 years for $4 million. (You earn no rental income on the property). a. If the interest rate is 8 percent, what is the present value of the sales price? b. Is the property investment attractive to you? Why or why not? c. Would your answer to (

Problem Set

1. An investor expects the value of a 1,000 dollar investment to double within 8 years. What is the expected annual rate of growth in the investment 2. A firm has a total sebt of 600,000 and equity of 400,000. What is the debt/net worth ratio and the debt to total assets ratio for the firm? please show the calculations

Accounting

13-4 The following data have been collected for the past two years for the Northern Division of Loring Company: 2005 2006 Sales $50,000,000 $50,000,000 Operating Income 4,500,000 4,100,000 Average Operating Assets 25,000,000 25,000,000 REQUIRED: 1. COMPUTE THE MARGIN AND TURNOVER RATIOS FOR EACH YEAR. 2. COMPUTE THE

Insurance and Pension Funds

Need help with these 2 problems. 6. A client needs assistance with retirement planning. Here are the facts  The client, Dave is 21 years old. He wants to retire at 65.  Dave has disposable income of $2,000 per month.  The IRA Dave has chosen has an average annual of 8% If Dave contributes ha

Fundamentals of Corporate Finance (4th Edition)

Solutions for select problems/chapters from the textbook: Fundamentals of Corporate Finance (4th ed.) R.A. Brealey, S.C. Myers, & A.J. Marcus McGraw-Hill/Irwin, 2004 New York, NY I hope this would help you students gain better understanding of the examples/exercises covered in the text and gain better understanding of