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
Anna Waldheim was seriously injured in an industrial accident. She sued the responsible parties and was awarded a judgment of $2,000,000. Today, she and her attorney are attending a settlement conference with the defendants. The defendants have made an initial offer of $156,000 per year for 25 years. Anna plans to counteroffer a
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
In a Word document, upload your answers to the following questions below. Very importantly - show all your work. If your final answer is wrong, you can still receive partial credit if you show all of your steps and demonstrate a good understanding of the time value of money. 1. In two to three paragraphs, explain why the co
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.
A company has a capital structure that consists of 50 percent debt and 50 percent equity. Which of the following statements is most correct? a. The cost of equity financing is greater than or equal to the cost of debt financing. b. The WACC exceeds the cost of equity financing. c. The WACC is calculated on a before-tax basis
***Please show work in how you arrived at the answers (Compound interest) To what amount will the following investments accumulate? a. $5,000 invested for 10 years at 10 percent compounded annually b. $8,000 invested for 7 years at 8 percent compounded annually c. $775 invested for 12 years at 12 percent compounded annuall
Explain whether the following statement is true or false: $100 a year for 10 years is an annuity, but $100 in year 1, $200 in year 2, and $400 in years 3 through 10 does not constitute an annuity. However, the second series contains an annuity.
1. An investor deposits $50,000 today in an interest bearing account. The account pay 7% interest annually, and the investor expects to withdraw the principal plus interest at the end of 5 years. How much would the investor accumulate by the end of 5 years if interest is compounded monthly? 2. You plan to deposit $500 a
How much more will your parents have to invest each year for the next five years to have the funds for her education? How much money will your parents have at the end of three years to help you with graduate school, which you will start then?
1 Your younger sister, Jennifer, will start college in five years. She has just informed your parents that she wants to go to Penn State U,. which will cost $18,000 per year for four years (cost assumed to come at teh end of each year). Anticipating Jennifer's ambitions, your parents started investing #3,000 per year five years
Please reply in "doc" format: 1. Mario's auto shop plans to buy a new garage in three years to have more space for repairing it's trucks. The garage cost $400,000. What lump sum amount should the company invest now to have the $400,000 available at the end of the 3 yr period? Assume that the company can invest money at: a. ei
Calculating standard deviation, coefficient of variation, future value, present value, mortgage monthly payment...
Task is to understand how to solve each problem and to be able to explain the solution process used. Show all calculations, step by step, using Excel. Grade will depend on the quality of explanations. 7-1. Manager Paul Smith believes an investment project will have the following yearly cash flows with the associated probabil
What is the accumulated sum of each of the following streams of payments? a. $500 a year for 10 years compounded annually at 5 percent b. $100 a year for 5 years compounded annually at 10 percent c. $35 a year for 7 years compounded annually at 7 percent d. $25 a year for 3 years compounded annually at 2 percent
Herbert purchased a 10 year annuity for $96,000 late in 2008. The annuity will pay him $4,000 per month for ten years starting on Sept 1, 2008. How much of the $16,000 received this year will be taxable? A. 12,800 B. 16,000 C. 0 D. 3,200
1. Future Values. You deposit $1,000 in your bank account. If the bank pays 4 percent simple interest, how much will you accumulate in your account after 10 years? What if the bank pays compound interest? How much of your earnings will be interest on interest? 2. Calculating Interest Rate. Find the annual interest rate. Pr