Johnny has a technology that will be available in the near term. He anticipates his first annual cash flow from the technology to be $215,000, received two years from today. Subsequent annual cash flows will grow at 4% in perpetuity. What is the present value of the technology if the discount rate is 10%? What is the relati
Seaborn Co. has identified an investment project with the following cash flows. If the discount rate is 10 percent, what is the present value of these cash flows? What is the present value at 18% ? At 24%? Year 1 950 Year 2 1040 Year 3 1130 Year 4 1075
Read the below articles. Harrington, Lisa, (2007 May) Designing the Perfect Warehouse, Inboundlogistics.com, assessed Oct. 5, 2009. Bob Trebilcock, (2008, Jan) The Multi-Modal Warehouse, Modern Materials Handling (Warehousing Management Edition) Boston: Vol. 63, Iss. 1, pg 40, 1 pgs. David Drickhamer, (2006, Feb) Chang
Given emerging information technology, there is controversy about the continuing viability of this marketing concept. One view of how the concept may continue to evolve is from a renowned futurist, Thomas Frey. Using the following websites: (miami dade) http://www.mdpls.org/; http://www.davinciinstitute.com/page.php?ID=120
Problem At the end of 1922, your great grandfather (g.g.f.) established a trust fund to be used in order to help a later generation of the family obtain a university education. The ultimate beneficiary of the trust is required to draw the trust's balance in 36 equal monthly instalments starting at the beginning of the first y
Find the interest rate (or rate of return) in each of the following situations. You borrow $85,000 and promise to pay back $201,229 at the end of 10 years. You borrow $9,000 and promise to make payments of $2,684.80 at the end of each of the next 5 years.
Assume that you inherited some money. A friend of yours is working as an unpaid intern at a local brokerage firm, and her boss is selling securities that call for 4 payments, $50 at the end of each of the next 3 years, plus a payment of $1,050 at the end of Year 4. Your friend says she can get you some of these securities at a
As part of your financial planning, you wish to purchase a new care exactly 5 years from today. The car you wish to purchase costs $14,000 today, and your research indicates that its price will increase by 2 percent to 6 percent over the next 5 years. a) estimate the price of the car at the end of 5 years if inflation is (1
Atlas Home Supply has paid a constant annual dividend of $2.40 a share for the past 15 years. Yesterday, the firm annunced the dividend will increase next year by 10 percent and will stay at that level through year three, after which time the dividends will increase by 2 percent annually. the required return on the stock is 12 p
1. Your friend says, 'I just got out of an accounting lecture about future value and present value. Frankly, I don't have a clue what the professor was talking about, and we have a quiz on Wednesday. Help!'What would you tell your friend? How would you help him/her out? Clearly and concisely explain what is meant by the time v
If you invest $100,000 today at 12% per year over the next 15 years, what is the most you can spend in equal amounts out of the fund each year over that time.
What's the future value of $1,500 after 5 years if the appropriate interest rate is 12%, compounded monthly? a) $1,922.11 b) $2,725.05 c) $2,600.11 d) $2,230.66 e) $2,342.19
You are interested in saving money for your first house. Your plan is to make regular deposits into a brokerage account which will earn 14 percent. Your first deposit of $5,000 will be made today (January 1st). You also plan to make four additional deposits at the beginning of each of the next four years. Your plan is to inc
1. Compute the time it takes to save $10,000 if you know you can save $300 per month in a bank account paying 10 percent interest. 2. Compute the amount of money you need to invest today to have a balance of $10,000 10 years from now in a bank account expected to earn 10 percent interest. 3. You are saving $300 per month i
How is a car loan an example of TVM? Under what circumstances should an individual take out a loan versus pay all cash? How have recent zero $ down and zero % interest for 12 months or more affected potential cash buyers?
A new labor contract has been signed, my company has agreed to make a one-time contribution of Euros 1,000,000 to the construction of a new physical fitness facility for its employees. This amount will be placed in an account earning 2%. When the account grows to Euros 1,850,000, construction will commence. How long must the emp
E6-3 (Computation of Future Values and Present Values) Using the appropriate interest table, answer each of the following questions. (Each case is independent of the others.) (a) What is the future value of $7,000 at the end of 5 periods at 8% compounded interest? (b) What is the present value of $7,000 due 8 periods hence, di
Dan plans to fund his IRA with a contribution of $2,000 at the end of each year for the next 10 years. If he earns 10% on his contributions how much will he have at the end of the 10th year. A. $12,290 B. $51,880 C. $31,874 D. $20,000
I'm having a hard time understanding future value. Can I please get a simple answer for the following? Discuss the positive and negative effects of the future value of an investment, for a duration of a) a single period and b) a double period. Discuss the good effects and ill effects that a future value of an investment will
Ken is 63 years old and unmarried. He retired at age 55 when he sold his business, Understock.com. Though Ken is retired, he is still very active. Ken reported the following financial information this year. Assume Kenâ??s modified adjusted gross income for purposes of the bond interest exclusion and for determining the taxabili
1. 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 payme
Discounted cash flow analysis is also called time value of money analysis. It is the technique to covert a cash flow amount occurring at one time point into a cash flow amount occurring at another time point with the equivalent value. It is said that this technique is fundamentally important in any investment analysis, particula
You are a financial analyst in corporate treasury. The company is prepared to go forward with a $50 million bond issue. The term is 20 years, coupon 5.56 percent (paid semiannually), and $1,000 face value per bond. As is customary, on the day of the issue, the investment banker's call with any updated information on the market b
You are an investment manager and a client wants to know the lump sum he would need to deposit today to receive a $35,000 supplement retirement annuity for 15 years beginning when he retires in 20 years. Looking at his investment options, you expect an average annual return on the annuity of 8 percent. How else could you stru
Can you help me understand these problems? #6 Suppose the risk-free interest rate is 4% a. having $200 today is equivalent to having what amount in one year? b. having $200 in one year is equivalent to having what amount today? c. Which would you prefer, $200 today or $200 in one year? Does your answer depend on when
3. Calculate the future value of $2000 in a. Five years at an interest rate of 5% per year b. Ten years at an interest rate of 5% per year c. Five years at an interest rate of 10% per year d. Why is the amount of interest earned in part (a) less than half the amount of interest earned in part (b)?
Problems with annuities and compound interest. Thank you so much for helping me get started! ============== 4-6A. (Cash budget) The Sharpe Corporation's projected sales for the first eight months of 2004 are as follows: January $ 90,000 May $300,000 February 120,000 June 270,000 March 135,000 July 225,000
1) Bill has the chance to invest in a project that will generate year-end cash inflows of $1,500 each year for 2 yrs, $2,000 for each of the next 3 yrs, and $5,000 at the end of year 6. The required rate of return is 13.5% compounded annually. If the cost to invest in this project is $8,200, what is the Net Present Value of th
If Jon received an annual $75 payment indefinitely and the market rate of interest for these types of payments is 8%, what is the price Jon would pay for this stream? What is the end value of investing $5,000 for 14 months at an annual interest rate of 6% compounded monthly? If Cindy begins making quarterly investments of
'Any future cost is relevant'. Do you agree? Explain. Why are historical or past data irrelevant to special decisions?