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    The Time Value of Money

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    Multiple choice: Time value of money (TVM) for Cathy, Don Corp, Carol Thomas

    Cathy sets aside $2,000 each year for 5 years. She then withdraws the funds on an equal annual basis for the next 4 years. If Cathy wishes to determine the amount of the annuity to be withdrawn each year, she should use the following two tables in this order: a. present value of an annuity of $1; future value of an annuity o

    Question set: FV, PV, NPV, monthly payment, investments, interest, compounding

    Finance Ch5 Q's Answer these questions using Excel functions where applicable. Show formulas and how the answer was obtained. On the first question the instructor wants us to use our present age to nearest month. I am 22 years and 2 months. 1. Assume you drink one coffee per day, 5 days a week. Assume coffee is $4.00. T

    Future and Present Value of cash flows

    Congratulations! You have just won the lottery! However, the lottery bureau has just informed you that you can take your winnings in one of two ways. Choice X pays $1,000,000. Choice Y pays $1,750,000 at the end of five years from now. Using a discount rate of 5 percent, based on present values, which would you choose?

    Time Value of Money: FV, PV, annuity, amortize, compounding, perpetuity, payment

    3- Time value of money - It is now January 1, 2006, and you will need $1,000 on January 1, 2010, in 4 years. Your bank compounds interest at an 8 percent annual rate. a. How much must you deposit today to have a balance of $1,000 on January 1, 2010? b. If you want to make 4 equal payments on each January 1 from 2007 thr

    Future Values

    Please help me out with the following problems 1. Time for a lump sum to double If you deposit money today in an account that pays 6.5 percent annual interest, how long will it take to double your money? 2. Time to reach a financial goal- You have $ 42,180.53 in a brokerage account, and you plan to deposit an additiona

    Future value, present value and finding the required interest rate

    Please help me out with the following questions. 1 -Future value - If you deposit $ 10,000 in a bank account that pays 10 percent interest annually, how much would be in your account after 5 years? 2- Present value - What is the present value of a security that will pay $ 5,000 in 20 years if securities of equal risk pa

    Present value of future payments

    ON JANUARY 1, 2001, BASEBALL PLAYER ALEX RODRIGUEZ SIGNED A NEW CONTRACT. THE TOTAL CONTRACT WAS WORTH $252,000,000 AND COVERED 10 YEARS ($242 MILLION IN SALARIES & $10 MILLION IN SIGNING BONUSES.) THE SALARY WAS TO BE PAID AS FOLLOWS: 2001 - 2004: $21 MILLION PER YEAR 2005 - 2006: $25 MILLION PER YEAR

    Sociology of Work and Industry: Innovations for 'Future Success'

    You work in a large public sector organization that is in a period of transition. You have been asked to join a "Future Success" change planning team. The team has agreed by consensus that you will prepare a summary of major organizational innovations that can improve productivity and the quality of working life. What innovation

    Calculating present value factors for different cases

    Use the basic formula for present value, along with the given opportunity cost, i, and the number of periods, n, to calculate the present value interest factor in each of the cases shown. Compare the calculated value to the table value. Case-- Opportunity Cost,i-- # of periods, n-- A--

    Stock price in future

    A stock that currently trades for $50 per share is expected to pay a year-end dividend of $2 per share. The dividend is expected to grow at a constant rate over time. Beta is 1.2, risk-free rate is 5%, and market risk premium is 5%. What is the stock's expected price seven years from today? (Please include formula in Excel)

    GM and the future

    Do you think that the the worst is over for GM? From a marketing standpoint, what does GM need to do in order to overcome their current troubles? 5 examples From an operations standpoint, what does GM need to do in order to overcome their current troubles? 5 examples Are these suggested solutions from marketing and ope

    TIME VALUE OF MONEY..

    This week we learn how to calculate the time value of money and why it is an important equation. It is fairly certain that this equation will become relevant in our lives. Drawing on your personal experience and/or future expectations, come up with an example where the time value of money would be important to you. Develop the v

    Time value of money problems

    Time value of money exercises 1. What is the present value of the following series of cash flows discounted at 12 percent: $40,000 now; $50,000 at the end of the first year; $0 at the end of year the second year; $60,000 at the end of the third year; and $70,000 at the end of the fourth year? 2. Assume an income-producin

    Calculating Present Value of TVM Lottery Winnings

    You just won the TVM Lottery. You will receive $1 million today plus another 10 annual payments that increase by $400,000 per year. Thus, in one year you receive $1.4 million. In two years, you get $1.8 million, and so on. If the appropriate interest rate is 10 percent, what is the present value of your winnings?

    Calculating Future Values

    Compute the future value of $1,000 compounded annually for a. 10 years at 5 percent b. 10 years at 7 percent c. 20 years at 5 percent d. Why is the interest earned in part (c) not twice the amount earned in part (a)

    E6-15 Investment Decision: Time Value of Money

    Andrew Bogut just received a signing bonus of $1,000,000. His plan is to invest this payment in a fund that will earn 8%, compounded annually. A) If Bogut plans to establish the AB Foundation once the fund grows to $1,999,000, how many years until he can establish the foundation? B) Instead of investing the entire $1,000,

    Future Values Tables

    Chapter 4: Problem 4.3 Use the future value interest factors in Appendix Table A-1 in each of the cases shown in the table on the facing page to estimate, to the nearest year, how long it would take an initial deposit, assuming no withdrawals, a. To double b. To quadruple. Case Interest Rate A 7% B 40 C 20 D

    Time value of money: begin with one penny.

    Suppose that you begin the month with one penny. Each day, you earn as much as the total you possessed the day before (day 1 you have $0.01, day 2 you earn $0.01 and you now possess $0.02, day 3 you earn $0.02 and now possess $0.04, etc.). How much will you possess at the end of one month?

    Deterrent for future crimes?

    Do you think punishment for a crime should be a deterrent for future crimes? Would a more lenient punishment for a first time offender be a sufficient deterrent?

    The time value of money: present value calculations

    1. Present Values. Compute the present value of a $100 cash flow for the following combinations of discount rates and times: a. r = 8 percent, t = 10 years. b. r = 8 percent, t = 20 years. c. r = 4 percent, t = 10 years. d. r = 4 percent, t = 20 years.

    Northeast Company: Diluted earnings per share calculation

    Northeast Company has 200,000 shares of common stock and 50,000 warrants outstanding. Each warrant entitles its owner to buy one share at a price of $20 before 2010. The firm's basic earnings per share is $2.25. What is the firm's diluted earnings per share? $1.15 $1.25 $1.50 $1.80 $2.00

    Time Value of Money: Buying a Big-Screen TV

    A friend plans to buy a big-screen TV/entertainment system and can afford to set aside $1,320 toward the purchase today. If your friend can earn 5.0%, how much can your friend spend in four years on the purchase? Round off to the nearest $1. a. $1,444 b. $1,604 c. $1,764 d. $1,283.

    Future Value

    If you invest $750 every six months at 8% compounded semi-annually, how much would you accumulate at the end of 10 years? a. $10,065 b. $10,193 c. $22,334 d. $21,731

    Time value of money problem

    Old Alfred Road, who is well-known to drivers on the Maine Turnpike, has reached his seventieth birthday and is ready to retire. Mr. Road has no formal training in finance but has saved his money and invested carefully. Mr. Road owns his home?the mortgage is paid off?and does not want to move. He is a widower, and he wants t

    Various time value solutions: Aaron Brown Corporation

    1. On January 1, 2007, Aaron Brown Corporation sold a building that cost $250,000 and that had accumulated depreciation of $100,000 on the date of sale. Brown received as consideration a $275,000 noninterest-bearing note due on January 1, 2010. There was no established exchange price for the building, and the note had no ready m