Explore BrainMass

The Time Value of Money

Time value of money

4.6) For an interest rate of 12% per year compounded every 2 months, determine the nominal interest rate per (a) 4 months, (b) 6 months, (c) 2 years. 4.11) What nominal interest rate per year is equivalent to an effective 16% per year, compounded semiannually?

Time value of money and discount rates are examined for lottery winnings.

You just won the lottery that promises to pay you $1,000,000 exactly 10 years from today. Because the $1,000,000 payment is guaranteed by the state in which you live, opportunitites exist to sell the claim today for an immediate single cash payment. A. What is the least you will sell your claim for if you can earn the follo

Cash Budget (Sharpe Corporation) and TVM Problems

Please view the attachment as well to view these questions in proper formatting. Some of the required charts did not copy over well. 1. (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 Jul

Interest, value of annuity, mortgage payment

Please see the attached file. 1. Find the simple interest for $4902 at 9.5% for 11 months. 2. Find the compound amount for $312.45 at 6% compounded semiannually for 16 years. 3. Find the amount of interest earned by depositing $12,903.45 at 10.37% compounded quarterly for 29 quarters. 4. Find the present value of $17

If Lee discounts these payments at 8%, what is the contract worth to him today?

27. Lee Childs is negotiating a contract to do some work for Hass Corp. over the next five years. Hass proposes to pay Lee $10,000 at the end of each of the third, fourth, and fifth years. No payments will be received prior to that time. If Lee discounts these payments at 8%, what is the contract worth to him today?

Time Value of Money and Retirement

How would you explain the use of time value of money (TVM) in business? What considerations are made when calculating TVM? How can you use TVM to create your own, or someone else's, retirement plan?

The yield curve is

50. The yield curve is a. inverted when short term rates are higher than long term rates b. normal when it slopes upward to the right c. a plot of interest rates versus term, also called the term structure of interest rates d. all of the above 51. The federal government can always avoid default on its issues because of it

Future Value - Tara Cutler

P3-24. Tara Cutler is newly married and is now preparing a surprise gift of a trip to Europe for her husband on their tenth anniversary. Tara plans to invest $5,000 per year until that anniversary and plans to make her first $5,000 investment on their first anniversary. If she earns an 8 percent rate on her investments, how much

Present Value of a Lump Sum - Gina Coulson

P3-7. Gina Coulson has just contracted to sell a small parcel of land that she inherited a few years ago. The buyer is willing to pay $24,000 at closing of the transaction or will pay the amounts shown in the following table at the beginning of each of the next five years. Because Gina doesn't really need the money today, she pl

Present and future value

Which of the following statements is false? a. If the discount rate (or interest) rate is positive, the future value of an unexpected series of payments will always exceed the present value of the same series. b. To increase present consumption beyond present income normally requires either the payment of interest or else an

Art Influences: Social, Political, Economic

Social, political, or economic conditions can alter the nature and meaning of art. Be certain to support your position with examples that compare and contrast at least two of the following eras: Baroque, Rococo, Neoclassicism, and Romanticism. Choose specific examples of artistic achievements from the two eras. Examples can


This problem was given by another student in my class & has stumped me. Your grandmother invested one lump sum 17 years ago at 4.25 percent interest. Today, she gave you the proceeds of that investment which totaled $5,539.92. How much did your grandmother originally invest?

Annual Salary

Trying to figure out what the raise would be. Ended up with two different answers both times. Today you earn a salary of $35,000. What will be your annual salary fifteen years from now if you earn annual raises of 3.5 percent?

Future Values Calculation

Trying to figure out how much will I have in 8 years if I receive $250,000 in two years, and invest it for six more years at 7.9% percent per year.

Earnings Per Share

What is the earnings per share of stock in a company that finances 75% of the company's $4,000,000 total capital needs with debt and has an operating income of $500,000, 10% cost of debt, 30% tax rate, and book value of $8.75. a) $1.75 , b) $2.00 , c) 2.21 , d) .88 , e) 1.22

Environmental Science: The Irish Potato Famine: 1846 - 1850

Scenario: You are a demographer, a person who studies population patterns. Like most demographers, you are well aware of the growth of the human population in the last century. In 1900, the earth had a population of about one and a half billion people. By 2000, earth's population had quadrupled to six billion people. Most of

Negative Growth: Value of a share

Horse and Buggy Inc. is in a declining industry. Sales, earnings, and dividends are all shrinking at a rate of 10 percent per year. Please answer a. b. c. d. and explain/show how you determined the answers. a. If r = 15 percent and DIV1 = $3, what is the value of a share? b. What price do you forecast for the stock next

Discounting Methods: The concept of discounting should be used in order to keep track of real costs for the purpose of planning. Calculate the present value of the estimated benefit stream at all three discount rates. Explain the effect of higher and lower discount rates.

Hopeful House, a nonprofit orgnanization serving the Big City community, is considering building a playground. It needs to rationally convince the Community Chest that its project is worthy of a special grant by calculating the present value of future benefits. The financial manager estimates future benefits of the playground at


Discuss the time value of money and why this is important. Define the following terms in detail. · Present Value · Future Value · Net Present Cost · Annualized Cost

FCFE per share / Current Value

Abbey Naylor, CFA, has been directed by Carroll to determine the value of Sundanci's stock using the free cash flow to equity model. Naylor believes that Sundanci's FCFE will grow at 27 percent for two years and 13 percent thereafter. Capital expeditures, depreciation, and working capital are all expected to increase proportio

College Investment Account

You just became a parent yesterday and you have suddenly realized that you will need to start saving money to send your child to college. After doing some research on the internet, you estimate that a four year college will cost $50,000 per year. How much money would you need to put into your child's investment account today

Savings and Retirement Calculation

You have just turned 25, and you intend to start saving for your retirement. You plan to retire in 43 years when you turn 68. During your retirement you would like to have an annual income of $120,000 per year for the next 27 years (until age 95). Calculate how much you would have to save between now and age 68 in order to f

Money supply

Show graphically and explain the demand for money and supply of money and equlibrium condition for the economy.

Relationship between PV of future cashflows & multiples based acctg info.

Can any of you OTAs help me answer this question with a short answer please?- a- In your finance course work you learned that value is the present value of expected net future cash flows. What is the relation between this approach and the use of multiples based on accounting information? b- How are valuations based on fi

John plans to retire in 15 years, and he wants to have an annuity

Question 1 (TVM) (15 marks) This question consists of the following three independent parts. (a) John plans to retire in 15 years, and he wants to have an annuity of $50,000 a year for 20 years after retirement. John wants to receive the first annuity payment at the end of the 15th year from today (the same day as his retireme

Time value of money problem

1.If Ryan who is 27 years old, wants to have one million dollars(today dollars) when he retires at age 65, how much should he save in equal monthly deposits from the end of the next month. Assume his savings earn a rate of 7% per year (A.P.R) 2. If Ryan who is 27 years old, wants to have one million dollars(today dollars) whe