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Annuity

Time Value of Money

1. Calculate the future value of 1,535 invested today for 8 years at 6 percent. 2. What is the total present value of the following cash stream, discounted at 8 percent? Year Amount 1 400 2 750 3 945 4 145 5 78 3. If you invested $2,000 per year into an IR

Effective interest amortization of bond premium

See attached for best format. Question 1: (1 point) Exercise 14-5B: Effective interest amortization of bond premium L.O. P3 Dell Co. issues bonds dated January 1, 2009, with a par value of $450,000. The bonds' annual contract rate is 9%, and interest is paid semiannually on June 30 and December 31. The bonds mature in t

Case Study - TMSAC

Taos Museum of Southwestern Arts and Crafts ? The answers to this case are cumulative. Please do not skip any section. ? You may make whatever assumptions you think are necessary to answer any question. Kindly state every assumption explicitly. ? All of the information that you need to answer a given question is provided in

Journal entry problem

On December 31, 2007 A Corporation sold some of its product to D Company, accepting a 3%, four-year promissory note having a maturity value of $900,000 (interest payable annually on December 31). D Company pays 8% for its borrowed funds. Instructions (a) Prepare the journal entries to record the transaction on the books of A

Break-Even / Operating Leverage and Cash Budget

Can you help me get started with this assignment? ----------------------------------------- Cash Budget For Company X, actual sales for November and December, and projected sales for January through August are as follows: actual sales projected sales Nov 225,000 Jan 105,000 May 280,000 Dec 180,000 Feb 115,000 Jun 255

Financial Management

Work out and submit the following problems: 1. o Mr. Smith tells Mr. Jones that he is to receive an inheritance of $1,000 at the end of three years, but he needs as much money as he can get right now. Mr. Jones normally loans money for which he receives interest at the rate of 10% per year. Mr. Jones has ample opportunity to

Expected value;standard deviation;coefficient of variation

Problems involve: expected value standard deviation coefficient of variation pv fv pva fva (see attached) I need these problems done using excel and showing how the answers were calculated. The answers are at the end of the attached problem set. I need the formulas to each problem in an EXCEL spreadsheet as w

Time value of money concepts: Ordinary annuity

!. You want to buy a car but you are $5,000 short. If you invest $2,350.00 at an annual interest rate of 12%, how long will it take you to purchase the car? 3. What is the future value of a 5-year ordinary annuity with annual payments of $2500, evaluated at 15% interest rate?

Finance: Annuities: Time Value of Money

Outflows Initial Investment now: $235,000 End of year: 1: $150,000 2: $200,000 3: $250,000 4: $300,000 5: $350,000 Inflows Initial investment now: $------- End of Year: 1: $200,000 2: $250,000 3. $300,000 4: $450,000 5: $500,000 1. Compute the NPV for all these cash flows. This should be a single amount. Use

Cash Flow Stream of the State Lottery

A person wins $1 million in the state lottery. Actually, the person receives $50,000 per year for 20 years. The present value of this is considerably less than $1 million. Using a 10% discount rate, what is the duration of this cash flow stream?

Compound Interest

Chinn Wong wishes to purchase a $600,000 house. She has accumulated a $120,000 down payment, but she wishes to borrow $480,000 on a 30-year mortgage. For simplicity, assume annual mortgage payments occur at the end of each year and there are no loan fees. 1. What are Wong's annual payments if her interest rate is: a. 8% b.

Present Value or Future Value - WalMart parking lot

I am trying to determine what the steps to solve homework assignment below are. I am confused with future and present value annuities. Please let me know what steps I have to do. If the formulas can be provided that would be great. Assume that Wal-Mart, Inc has decided to surface and maintain for 10 years a vacant lot next

Calculate the car loan's monthly payment and EAR

You want to buy a car, and a local bank will lend you $20,000. The loan will be fully amortized over 5 years ( 60 months), and the nominal interest rate will be 12% with interest paid monthly. What will be the monthly loan payment? What will be the loan's EAR?

Finance" Market value of bond, PV of investment, amount of annuity deposits

1. A bond matures in 20 years, at which time it pays the owner $1,000. It also pays $70 at the end of each of the next 20 years. If similar bonds are currently yielding 8%, what is the market value of the bond? A. Over $1,000 B. Under $1,000 C. Exactly $1,000 D. Cannot be determined from the info given 2. An investment is

Homer Simpson Inc: Analysis of Alternatives for purchase of new punch press

Homer Simpson Inc., a manufacturer of steel school lockers, plans to purchase a new punch press for use in its manufacturing process. After contacting the appropriate vendors, the purchasing department received differing terms and options from each vendor. The Engineering Department has determined that each vendor's punch press

Compute amount of withdrawal beginning in 35 years.

I am planning to save 3000 per year and my first deposit will be made next year. I am going to invest in a mutual fund which will return 10% per year. I am going to retire in 35 years and will live live for another 30 years after I retire. My first withdrawal will be in 35 years. How much can I spend each year after I retire

Calculate the carrying amount of a bond

A company issues $100,000 of semiannual 10-year, 8% bonds sold to yield 10% Present value of $1.00 at 5% for 20 periods 0.3769 Present value of $1.00 at 8% for 10 periods 0.4632 Present value of ordinary annuity of $1.00 @ 5% for 20 periods 12.462 Present value of ordinary annuity of $1.00 @ 8% for 10 periods 6.710

Analyze Jack Sawyer's copier lease: original cost, amount of payment

Jack Sawyer is presently leasing a copier from John Office Equipment Company. The lease requires 11 annual payments of $3,500 at the end of each year and provides the leaser (John) with an 8% return on its investment. You may use the following 8% interest factors: 9 Periods 10 Perio

Zapatera Enterprises: Compound interest, present value, annuity

4-1A. (Financial forecasting) Zapatera Enterprises is evaluating its financing requirements for the coming year. The firm has only been in business for one year, but its Chief Financial Officer predicts that the firm's operating expenses, current assets, net fixed assets, and current liabilities will remain at their current p

Issue price of the bonds

On January 1, 2010, Lowry Co. issued ten-year bonds with a face value of $5,000,000 and a stated interest rate of 8%, payable semiannually on June 30 and December 31. The bonds were sold to yield 10%. Table values are: Present value of 1 for 10 periods at 8% 0.46319 Present value of 1 for 20 periods at 4% 0.

Present value of annuity...

The company is assessing the employees fund. At the end of each of the next 25 years the company will have to pay its retirees 5,432. If the fund is estimated to earn 2%, how much does the company need to have set aside today to ensure that it can meet its future obligations? (At the end of the 25th year, the balance should be d

Annual deposit for a sinking fund

My company had establish a sinking fund for its outstanding preferred stock issue. $543,219,876 is the total amount that will be retired in 26 years. At the beginning of each of these 26 years, My company will deposit and equal amount into an account that will earns 4%. What is the value of this periodic deposit? Show Computati

TVM

After a protracted legal case, Joe won a settlement that will pay him $11,000 each year at the end of the year for the next ten years. If the market interest rates are currently 5%, exactly how much should the court invest today, assuming end of year payments, so there will be nothing left in the account after the final payment

Sharon Smith's Annuity: What is Market Price of Stock?

1. An issue of common stock has just paid a dividend of $3.75. Its growth rate is 8%. What is its price if the market's rate of return is 16%? (Show all work/calculations/formulas) 2. Sharon Smith will receive $1 million in 50 years. The discount rate is 14. As an alternative, she can receive $2,000 today. Which should she c

Annual Payment

A $150,000 loan from First State Bank of Poplar Bluff carries an annual percentage rate of 12%. It will be paid off through equal year-end installments, including both principal and interest, over a 20-year period. What is the annual payment required?

Three rules of time travel

A What is the present value of $10000 received a. Twelve years from today when interest rate is 4% per year b. Twenty years from today when the interest rate is 8% per year c. Six years from today when the interest rate is 2% per year B What is the present value of $1000 paid at the end of each of the next 100

Retirement Savings Plan: Annuity Calculations for the Amount to Save

You are saving for retirement. To live comfortably, you decide you will need to save $2 million by the time you are 65. Today is your 30th birthday, and you decide, starting today and continuing on every birthday up to and including your 65th birthday, that you wil put same amount into a savings account. If the interest rate is

Rule of 72; tax consequence of new copy machine purchase

If you want to determine how much you will have in a retirement account if you place a specific payment (the annuity) into an account at the end of each period of time (a month or a year), you would use the ______ formula. A. future value of an ordinary annuity B. future value of an annuity due C. present value of an ord