Please look over these questions for me and let know which one is wrong and show work. SEE ATTACHMENT 1. In determining the future value of a single amount, one measures A. the future value of periodic payments at a given interest rate. B. the present value of an amount discounted at a given interest rate. C. the futu
You have been offered two annuities for the same price. Annuity 1 pays $50,000 per year at the end of the year for 10 years. Annuity 2 pays $40,000 per year at the end of the year for 20 years. If your cost of capital is 10%, which of these two annuities is a better deal, why?
You will receive $4,000, three years from now. The discount rate is 10 percent. a. What is the value of your investment two years from now? Multiply $4,000 X .909 (one year's discount rate at 10 percent). b. What is the value of your investment one year from now? Multiply your answer to part a by .909 (one year's discount
1. General Mills will receive $27,500 a year for the next 10 years as a payment for a weapon he invented. If a 12 percent rate is applied, should he be willing to sell out his future rights now for $160,000? 2. Determine the amount of money in a saving account at the end of five years, given an initial deposit of $3, 000 an
1. As stated in the chapter, annuity payments are assumed to come at the end of each payment period (termed an ordinary annuity). However, an exception occurs when the annuity payments come in the beginning of each period (termed an annuity due). To find the present value of an annuity due, subtract 1 from n an add 1 to the ta
1. Carrie Tune will receive $19,500 a year for the next 20 years as a result of the new song she has written. If a 10 percent rate is applied, should she be willing to sell out her future rights now for $160,000? 2. At a growth (interest) rate of 8 percent annually, how long will it take for a sum to double? To triple? Selec
Sunrise Industries wishes to accumulate funds to provide a retirement annuity for its vice president of research, Jill Moran. Ms Moran, by contract, will retire at the end of exactly 12 yrs. Upon retirement, she is entitled to receive an annual end of year payment of $42,000 for exactly 20 years. If she dies prior to the end
Bob invested $2,000 in an investment fund on his 21st birthday. The fund pays 7% interest compounded semiannually. Bob is celebrating his 50th birthday today. Bob decides he wants to retire on his 60th birthday and he wants to withdraw $75,000 per year, the first withdrawal on his 60th birthday and the last withdrawal on his 90t
Hello, I need some assistance with the attached questions regarding my financial accounting studies. Create a word document answer sheet and submit a list of your answers, by first showing the formula used to calculate your answers. For example: P3-6. PV = FVn x (PVIF i%,n)
How much will $1.00 deposited in a savings account earning a compound annual interest rate of 6 percent be worth at the end of the following number of years? a. 3 b. 5 c. 10 If you require a 9 percent return on your investments, which would be preferred. Why? a. $5,000 today b. $15,000 five years from today c.
Sonia Gomez, a 45-year-old widow, wishes to accumulate 4250,000 over the next 15 years to supplement the retirement programs that are being funded by the federal government and her employer. She expects to earn an average annual return of about 8% by investing in a low-risk portfolio containing about 20% short -term securities,
Richmond Corporation was founded 20 years ago by its president, Daniel Richmond. The company originally began as a mail-order company but has grown rapidly in recent years, in large part due to its Web-site. Because of the wide geographical dispersion of the company's customers, it currently employs a lockbox system with collect
Unit 1 Individual Project Details: Please answer these questions: 1. After a protracted legal case, Joe won a settlement that will pay him $11,000 each 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
1.James plans to fund his individual retirement account, beginning today, with 20 annual deposits of $2,000, which he will continue for the next 20 years. If he can earn an annual compound rate of 8 percent on his deposits, the amount in the account upon retirement will be 1. 1. $21,207. 2. 2. $91,524. 3. 3. $98,84
Could someone please help? N = 15 I = 7 PMT = 8500 PV = ? Table: Present value of an annuity Find the answer for number of years and the interest rate. Mutilply the annual payment by the figure from the table.
See attached file for problems. Refer to Stone Cold. For 2004, what was the return on assets? (Points: 2) 9.16% 12.40% 15.60% 20.00% 4. Referring to Stone Cold data below. For 2004, what was the debt-to-equity ratio? Refer to Stone Cold. For 2004, what was the average collection peri
1. A new SUV costs $33,000. You must pay 6% sales tax. You will put 10% of this total as a down payment. For 60 months, you must borrow at an annual rate of 10%. What annual rate would have the same payments stream at 48 months? (Payments at 10% for 60 months = "X" % for 48 months). 2. A rare painting increases in val
1. In two to three paragraphs, explain why the concept of present value is so important for corporate finance and is often the very first topic taught in any finance class. 2. Calculate the future value of the following: a. $600 if invested for five years at a 3% interest rate b. $400 if invested for three years at a 5% i
Deflections, LLC, currently net leases its headquarters office building for $70,000 per month, and this lease has two years left to run. (Under a commercial fully net lease, the tenant pays for all maintenance, repairs, insurance and property taxes.) Deflections considers the rent to be less than the current market rate, but ex
1. Future value: Chuck Tomkovick is planning to invest $25,000 today in a mutual fund that will provide a return of 8 percent each year. What will be the value of the investment in 10 years? 2. Patrick Seeley has $2,400 that he is looking to invest. His brother approached him with an investment opportunity
1. Joe deposited $25,000 in Bank 1. Bank 1 pays 9% interest compounded annually. How much will Joe have in his account after 10 years? Show your work. 2. Mr. Smith wants to buy his son a car in 3 years. The cost of the car is $20,000. Assuming a bank savings rate of 12% compounded quarterly, how much must Mr. Smith put in hi
Jennifer expects to start college in five years. The school she wants to go to will cost $18,000 per year for the four years (assume payments at end of each year). Her parents started saving $3,000 per year five years ago and will continue to do so for five more years. How much more will her parents have to invest each year
You wish to retire after 30 years, at which time you want to have accumulated enough money to receive an annuity of $60,000 a year for 22 years of retirement. During the period before retirement, you can earn 8% annually, and after retirement, you can earn 6% on your money. a) What annual contributions to the retirement fund
On January 1, a company issues bonds with a par value of $300K. The bonds mature in 5 yrs and pay 8% annual interest each on June 30 and December 31. On the issue date, the market rate of interest is 6%. Compute the price of the bonds on their issue date. - Present value of annuity for 10 periods at 3%=8.5302 - Present valu
What is the Present Value of the following annuities? 1. $2,500 a year for 10 years discounted back to the present at 7 percent. 2. $70 a year for 3 years discounted back to the present at 3 percent. 3. $280 a year for 7 years discounted back to the present at 6 percent 4. $500 a year for 10 years discounted back
Hay Corporation enters into an agreement with Marly Rentals Co. on January 1, 2008 for the purpose of leasing a machine to be used in its manufacturing operations. The following data pertain to the agreement: (a) The term of the noncancelable lease is 3 years with no renewal option. Payments of $155,213 are due on December 31 o
Bush Corporation signed a lease for equipment from EZ Leasing Company on January 1 20X2, for a period of ten years at $40,000 per year, including insurance of $3,000 and taxes of $2,000 per year. The equipment had a useful life of fifteen years. At the end of the lease, Bush will have the option of buying the equipment outright
1) Paul Parent is evaluating investment alternatives for saving for his infant daughters college education. He has estimated that he will need $225,000 upon her graduation from high school in 18 years. Paul has the following options: 1. Locking in an 8 percent investment with a lump sum payment today 2. Earning a 9 percent r
1) Amstop Company issues $20,000,000 of 10-year, 9% bonds on March 1, 2007 at 97 plus accrued interest. The bonds are dated January 1, 2007, and pay interest on June 30 and December 31. What is the total cash received on the issue date? 2) On January 1, 2007, Bleeker Co. issued eight-year bonds with a face value of $1,000,000
1.Jane purchased an annuity contract that pays her $800 per month. The annuity cost her $60,000 and it has an expected return of $100,000. How much of each monthly annuity payment is includible in jane's gross income? 2. Sam owes Bob $8,000. Bob cancels (forgives) the debt. The cancellation is not a gift and Sam is bankrupt.