Susan Lee who is 26 years-old has a new job with Inspiron. She is planning to start her own business in 8 years so she has two options to start saving money to open her shop: 1) She can participate in 401K plan that the company offers as part of the employee benefit package. She can afford to contribute $5,000 each year to he
Your answer "I think that driving a car and the time value of money are a good analogy. First, the longer you drive your car, the more gasoline you use. Hence, at the end of the journey, that is when you reach your destination, the value of the gasoline in the automobile is much less than when you started the journey. Second, th
1.16 At an interest rate of 8% per year, $10,000 today is equivalent to how much (a) 1 year from now and (b) 1 year ago? 1.20 Certain certificates of deposits accumulate interest at 10% per year simple interest. if a company invests $240,000 now in these certificates for the purchase of a new machine 3 years from now, how
Sample Business Analysis questions: present value, risk-free rate, total return, dividends and more...
1. Find the present value of a payment stream of $100 per year for the first fifteen years and $200 per year for the next five years, given a 12% discount rate. 2.A company stock was priced at $15 per share two years ago. The stock sold for $13 last year and now it sells for $18. What was the total return for owning this com
Ms. Ima Rich has just passed away. In her will she has left your not-for-profit organization $2 million dollars to be paid out in annual installments of $100,000 a year for the next twenty years. The executive director of your organization wants the money now to purchase a new headquarters. You have been charged with find
Details: Townscape has been on a five year run of consistent growth. The economy has since begun a downturn and the city government must now decide whether to place a hold on future growth. As a member of the city council you have been asked to consider the pros and cons of new development and its impact on current services. Con
1. Your parents will retire in 18 years. They currently have $ 250,000, and they think they will need $ 1,000,000 at retirement. What annual interest rate must they earn to reach their goal, assuming they don't save any additional funds? 2. You have $ 42,180.53 in a brokerage account, and you plan to deposit an additional $
? Annsley deposits $1,000 today into a savings account that pays 3% annual interest. How much will she have in 15 years with annual compounding? ? What is the present value of $20,000 to be received in 30 years if the appropriate discount rate is 9%? ? How do we determine the appropriate discount rate to use when computin
Julie needs to pay a $5,000 tuition bill nine months from now. She has some money saved up that she could invest, but she is also considering a trip to Europe. She remembers reading something about how money grows over time, and she wonders if maybe she should just go ahead and invest some money today to pay the tuition bill.
Please see attachment. Julie needs to pay a $5,000 tuition bill nine months from now. She has some money saved up that she could invest, but she is also considering a trip to Europe. She remembers reading something about how money grows over time, and she wonders if maybe she should just go ahead and invest some money today t
1) If you borrow $20,000 at the interest rate of 10%, what are the end-of-year payments if the loan is for five years? If the interest rate is 12.5% would the monthly payment be higher/lower ** I cant figure out the monthly payments at 12.5%. I have $5,275 a year for the first part 2) If you want to have $800,000 for retir
(Present and future values) Assume that you are starting with an investment of $10,000. a. What is the future value of the investment after one year if it earns 10% per year? What is the present value of this future value discounted at 10%? b. What is the future value of the investment after one year if it earns 20% per ye
Which would you prefer? a) An investment paying interest of 12% compounded annually. b) An investment paying interest of 11.7% compounded semiannually. c) An investment paying 11.5% compounded continuously. Work out the value of each of these investment after 1,5, and 20 years. 2.You own a pipeline which will gene
1.Luke believes that he can invest $5,000 per year for his retirement in 30 years. How much will he have available for retirement if he can earn 8% on his investment? A. 566,400 B. 681,550 C. 150,000 D. 162,000 2. An issue of common stock has just paid a dividend of $4.00. Its growth rate is equal to 8%. If the required
Hello, can you please provide the answers and show full calculations and explanations of each of the problems. Thank you. Assume that you are nearing graduation and that you have applied for a job with a local bank. As part of the Bank's evaluation process, you have been asked to take an examination that covers several financ
I seem to be stumbling with a portion of my work, could you please lend a hand.... Prepare a paper in which you describe future market conditions that your selected company/industry will face. Explain you conclusions. Address the following topics in your paper: The two portions that I need help with are; Cost Structure
44 Assume the following regarding a growing annuity valuation problem: Your salary at the end of the last year that you work is $90,000. You would like your income stream to begin at the end of your first year of retirement with a payment equal to 70% of your last working year's salary. (Assume all amounts are "end-of-year" p
1.The present value of an ordinary annuity of $2,350 each year for eight years, assuming an opportunity cost of 11 percent, is 1. $27,869. 2. $ 1,020. 3. $12,093. 4. $18,800. 2.Dan plans to fund his individual retirement account (IRA) with the maximum contribution of $2,000 at the end of each year for
Present value calculations. Using a present value table, your calculator, or a computer program present value function, answer the following questions: Show formulas. a. What is the present value of nine annual cash payments of $ 4,000, to be paid at the end of each year using an interest rate of 6%? b. What is the present
See the attached file. 1. Probability of Occurrence 2% 8% 20% 40% 20% 8% 2% $800 $1,000 $1,400 $2,000 $2,600 $3,000 $3,200 Calculate the expected value, standard deviation, and coefficient of varia
1. Hayley makes annual end-of-year payments of $6,260.96 on a five-year loan with an 8 percent interest rate. The original principal amount was 1. $25,000. 2. $30,000. 3. $31,000. 4. $20,000. 2.Nico makes annual end-of-year payments of $5,043.71 on a four-year loan with an interest rate of 13 percent. The original prin
A) Marigold Merchants has an outstanding issue of $1,000 par value bonds with an 8% coupon interest rate. The issue pays interest annuallly and has 15 years remaining to its maturity date. Bonds of similar risk are currently yielding a 10% rate of return. What is the value of these Marigold Merhant bonds? Is the bond selli
Future Value of annuity : For each case in the accompanying table, answer the question that follow. Amount of Interest Deposit period Case annuity rate (years)
Time Value of Money (TVM) Paper Prepare a 700-1,050-word paper in which you explain how annuities affect TVM problems and investment outcomes. In your paper, be sure to address the impact of the following items on TVM: Interest Rates and Compounding Present Value (of a future payment received) Future Value (of an
Chpt. 3 TVM 1. How long does it take a present value amount to triple if the expected return is 9%? a. 8.00 periods b. 8.04 periods c. 12.00 periods d. 12.75 periods e. insufficient information to compute 2. What is the PV of a 5-year annuity due (payments at beginning of period, aka annuity in advance) of $550 if
Please see the attached file. 1. A bank is paying 7.5% APR on a CD. (Note: The convention when there are no periodic payments is to assume annual compounding, unless stated otherwise. Thus this is annual compounding.) If you put $2500 into an account, how much will the account be worth in 3 years? a. 3062.5 b. 3105.74
The lessor can claim the tax deductions associated with asset ownership and realize the leased asset's residual value. In return, the lessor must pay tax on the rental income. Questions: a. Explain why a financial lease represents a secured loan in which the lender's entire debt service stream is taxable as ordinary inco
What is an opportunity cost rate, is it used in the discounted cash flow analysis, should I show it on my time line and where, and finally is this thing a single number or does it change and if so why?
** Please find PDF file attached. ** Please write out the steps to your solutions so I may study and comprehend.
The present value of a perpetuity is equal to the payment on the annuity, PMT divided by the interest rate, I: PV=PMT/I. What is the future value of perpetuity of PMT dollars per year? (Hint the answer is infinity, but explain why?)
Please help with the following: Section 5.1 36, 40, 46, 52 Section 5.2 20, 38, 44, 52, 58, 68 Section 5.3 22, 34, 40 36. Stock Growth A stock that sold for $22 at the beginning of the year was selling for $24 at the end of the year. If the stock paid a dividend of $.50 per share, what is the simple i