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?
How much would $5000 due in 50 years be worth today if the discount rate were 7.5%
Contract Maturity Data Actual Futures Price January 15 $105.00 March 15 $105.10 Suppose the effective annual T-Bill rate is expected to persist at 5% and that the dividend yield is 4% per year. Calculate the "correct" March futures price relative to the January price and comment on any
Write a 200-300 word description of the four time value of money concepts: present value, present value of an annuity, future value , future value of an annuity. Describe the characteristics of concept and give examples of when each would be used.
Suppose the financial institutions are required to keep 11% in reserve and the ratio of individuals' currency holdings to their deposits is 21%. What is the money multiplier ? If the financial institutions suddenly became concerned about the safety of their loans, and they decide to keep 2% excess reserves (reserves held by b
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
Using the Change Control Template Document in Appendix D, create a Change Control Document that uses the problem defined in Week 2, and propose a logical change that will fit with your approved project. Raising money for charity for a wildlife sanctuary. This sanctuary will be home to displaced big cats (i.e. lion, tigers).
You own 100 acres of timberland, with young timber worth $20,000 if logged today. This represents 500 cords of wood at $40 per cord. After logging, the land can be sold today for $10,000 ($100 per acre). The opportunity cost of capital is 10%. You have made the following estimates: (i) The price of a cord of wood will inc
What is the present value of the following future amounts? a. $800 to be received 10 years from now discounted back to the present at 10 percent b. $300 to be received 5 years from now discounted back to the present at 5 percent c. $1,000 to be received 8 years from now discounted back to the present at 3 percent d. $1,000
Do you think this will have an impact on future consumer spending. With the U.S. consumer representing approximately 70% of our GNP - will this fundamentally change our economy if the consumer saves more in the future?
63. Retirement Planning. A couple will retire in 50 years; they plan to spend about $30,000 a year in retirement, which should last about 25 years. They believe that they can earn 10 percent interest on retirement savings. a. If they make annual payments into a savings plan, how much will they need to save each year? Assume
Functions, Transformations, Asymptotes, Interest and the Time Value of Money, Trends and Forecasting
MTH133 Unit 5 Individual Project Name: 1) Find the domain of the following: a) Answer: Explain how you obtained your answer here: b) Answer: Show your work or explain how you obtained your answer here: c) Answer: Explain how you obtained your answer here: d) Answer: Show
Misty needs to hav $15,100 at the end of 2 years in order to fulfill her goal of purchasing a small sailboat. She is willing to invest the funds as a single amount today but wonders what sort of investment return she will need to ear. Figure out the annully compounded rate of return needed if she can invest $12,500 today. Ann
See the attached file. Destination Airlines merges with West World Airlines. Destination Airlines' initial investment for the merger is 1.1 billion. Pessimistic, Most likely, and Optimistic outcomes have been developed by Destination Airlines financial analysts. Initial Investment for Destination Airlines is
In 10 years you will begin receiving $155 dollars per year in perpetuity from your grandparent's family trust fund (first payment is exactly 10 years from today). You consider these payments essentially risk free and have decided to discount them at a constant risk free rate of 6.5%. What is the present value today of these fu
1. You will receive $5,000 three years from now. The discount rate is 8 percent. a. What is the value of your investment two years from now? Multiply$5,000 by .926 (one year's discount rate at 8 percent). b. What is the value of your investment one year from now? Multiply your answer to part a by .926 (one year's discount ra
1. The following are examples of intangible assets except ______. building trade marks patents technical expertise 2. The following are advantages of separation of ownership and management of corporations except ______. corporations can exist forever facilitate tra
1. Clarence Weatherspoon, a super salesman contemplating retirement on his 55 birthday, decides to create a fund on an 8% basis that will enable him to withdraw $20,000 per year on June 30th, beginning in 2014 and continuing through 2017. To Develop this fund, Clarence intends to make equal contributions on June 30th of e
3. You will receive $5,000 three years from now. The discount rate is 8 percent. a. What is the value of your investment two years from now? Multiply $5,000 _ .926 (one year's discount rate at 8 percent). b. What is the value of your investment one year from now? Multiply your answer to part a by .926 (one year's discount
Assume you sell for $100,000 a 10 percent ownership stake in a future payment one year from now of $1.5 million. A. What are you saying about the implied return for the 10 percent owner? B. What is the present value of the entire $1.5 million, using the implied return from Part B? C. What is 10 percent of the value dete
P6-7 (Time Value Concepts Applied to Solve Business Problems) Answer the following questions related to Derek Lee Inc. (a) Derek Lee Inc. has $572,000 to invest. The company is trying to decide between two alternative uses of the funds. One alternative provides $80,000 at the end of each year for 12 years, and the other is
What role does Time Value of Money (TVM) play in the calculation of certain types of liabilities?
The Perez Company has the opportunity to invest in on of the two mutually exclusive machines that will produce a product it will need for the foreseeable future. Machine A costs $10 million but realizes after- tax inflows of $4 million per year for 4 years. After 4 years, the machine must be replaced. Machine B costs $15 mill
Finance Word Problems: A set of multiple choice questions dealing with earnings per share, future value, present value, financing strategy and permanent funds requirement.
Address the following word problems. Use the charts attached and show your work. 8) A firm had the following accounts and financial data for 2005: Sales Revenue $3,060 Cost of goods sold $1,800 Accounts receivable 500 Preferred stock dividends 18 Interest expense 126 Tax rate 40% Total o
Could you explain how to do this? ------------------------- Sales Revenue $3,060 Accounts Receivable 500 Interest Expense 126 Total operating expenses 600 Accounts payable 240 Cost of goods sold 1,800 Preferred stock dividends 18 Tax rate 40% Number of co
What is the present value of the following future amounts? a.$800 to be received 10 years from now discounted back to the present at 10 percent b.$300 to be received 5 years from now discounted back to the present at 5 percent c.$1,000 to be received 8 years from now discounted back to the present at 3 percent d.$
What is the MRP on 4 year US government securities? Which opportunity will yield the largest amount five years from today? How much money does your aunt have to deposit in the bank today? How much will be in the account after your sister makes the second withdrawal two years from today?
You are given the following information k*= 1% Inflation rate is expected to be 2.5% for the next two years, 3% per year for the following two years, and 3.5% per year thereafter. 5 year US government securities have an interest rate that is 0.2% higher than 4 year US government securities The
Problem: PV of cash Flow stream. A rookie quarterback is negotiating his first NFL contract. His opportunity cost is 10%. He has been offered three possible 4-year contracts. Payments are guaranteed and they would be made at the end of each year. Terms of each contract are as follows: Year 1
Retirement planning: How much do you have to put into your account at the end of each year to reach your retirement goal?
You are planning your retirement and you come to the conclusion that you need to have saved $1,250,000 in 30 years. You can invest into an retirement account that guarantees you a 5% annual return. How much do you have to put into your account at the end of each year to reach your retirement goal?