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Future Value

Find the future vales of the following ordinary annuities: a. FV of $400 paid each 6 months for 5 years at a nominal rate of 12 %, compounded semiannually. b: FV of $200 paid each 3 months for 5 years at a nominal rate of 12%, compounded quarterly c. These annuities receive the same amount of cash during the 5- year period

Bond valuations based on Yields

Consider three bonds with 8 percent coupon rates, all selling at face value. The short-term bond has a maturity of 4 years, the intermediate-term bond has a maturity of 8 years, and the long-term bond has a maturity of 30 years. a. What will happen to the price of each bond if their yields increase to 9 percent?

Annuity Factor in Funds and PPP

With the following statistics make calculations and analysis. Giving attention to determination of the annuity factor. Transitional fund needed - $30,000 100% needed of the present take home pay which is $72,000 + $36,000 after 2 years. Tax rate is 30% Survivors benefits, including monies for kids are $2500 Current investmen

Calculations of Interest Rates

A bank consultant suggested that Sheila and Ed offer one of their best customers, Shanghai Winters, a 3.5% interest rate rather than the 8.0% going rate on a $70,000 five-year note receivable. Sheila and Ed would like you to explain the rationale behind the recommendation. Ed would also like to know what the interest rate would

10 Business Finance Questions

1. Which of the following project evaluation techniques does not take into consideration the time value of money: a. NPV b. IRR c. PI d. Payback 2. In order to accept a project using the NPV evaluation technique, the NPV must be: a. Greater than the discount rate b. Positive c. Great

College Education Savings

John and Barbara Roberts are starting to save for their daughter's college education. - Assume that today's date is September 1, 1998. é College costs are currently $10,000 a year and are expected to increase at a rate equal to 6 percent per year for the foreseeable future. All college payments are due at the beginning of

Pime Value Concepts Applied to Solve Business Problems

Answer the following questions related to Derek Lee Inc. : (a) Derek Lee 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

Personal Finance in Retirement

Your uncle has approached you with a personal finance decision. He tells you that he is currently eligible for a monthly pension benefit of $5,231 beginning January 2017. Alternatively, he can start drawing early monthly benefits of $3400 in January 2007 (a 35% reduction for a 10 year early start). You tell him you are ta

Compare two annuities; Virginia Medical Company machine replacement

See attached file for proper format. Please provide the process and the answers to the problewms. 1. Which of the following two annuities would you prefer to receive (based on sound financial reasoning) if the appropriate discount rate is 12 percent? 0 0 0 600 600 600 600 |-

Financial Analysis

FINANCIAL ANALYSIS 1. My firm is considering replacing old equipment with a new, more efficient model. The old equipment bought three years ago for $100,000, has a 5 - year MACRS life and can be sold for $50,000 or used for three more years when its resale value will be zero. The new equipment will cost $210,000, will have

Financial Calculator Inputs

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 an 12% annual rate of interest. A. If John borrows to pay all of his tuition, how much will he owe at the end of three years, assuming annual compounding? B

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, 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


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