Explore BrainMass

Explore BrainMass

    The Time Value of Money

    Present Value of Growing Annuity

    Jane has a child and wishes to begin saving for college expenses. Child will enter college in 6 years. Assume child will spend 4 years in college, that the real (ie: inflation adjusted) annual cost of a college education will remain at $24,000, that the nominal interest rate is 4.55%, that the expected rate of inflation is 2.0%,

    Financial Analysis of Under Armour

    Can you please help me with the following financial analysis and the attached questions (see attachment)? Please help prepare a financial analysis for 2008 and 2009 for Under Armour - http://investor.underarmour.com/investors.cfm The financial analysis should include: Current ratio Quick ratio Net profit margin Retur

    Intrinsic Value of a Stock and the Dividend Discount Model

    Part I A company's common stock dividends are anticipated to grow at a constant 5.5% growth rate per year going forward. The company just paid an annual dividend (that is, D-zero) of $3 per share. What's the intrinsic value of the stock based on the following required rates of return? 6% 8% 10% 12% If the stock is curren

    Retirement Investment Plans

    I will discuss the retirement plan I am currently investing in. It's nothing major I am only investing $ 1200 a year with an annual interest rate of 4.5% compounded annually . Not a big amount of money will be generated by the time I retire but it should do with the social security plans that we have after we retire from work an

    Time Value of Money in Real Estate: Southampton

    Before there was Paris Hilton, there was Consuelo Vanderbilt Balsan - a Gilded Age heiress and socialite, re-nowned for her beauty and wealth. Now Ms. Balsan's onetime Hamptons home is slated to hit the market priced at $28 million with Tim Davis of the Corcoran Group. Located on Ox Pasture Road in Southampton, the shingle-st

    Capital budgeting Practice True False Exam Questions

    Net Present Value Practice True false questions 1. The three common discounted cash flow methods are net present value, internal rate of return, and payback. 2. The net present value (NPV) method calculates the return on investment from a project by discounting all expected future cash inflows and outflows back to the pre

    Accounting: Balance Sheets, Income Statements and Cash Flows

    Question 1: On 1 January 2012, Rose Tremayne opens a bank account in the name of her new trading business, Rose Tremayne Trading (RTT). She puts £112,000 of her own money into the business bank account. The following is a summary of transactions during 2012: (1) RTT takes out a short-term bank loan of £45,000 cash. (2) RT

    Growing Annuity Payments: Amount of Your First Deposit

    You want to accumulate $1 million by your retirement date, which is 25 years from now. You will make 25 deposits in your bank, with the first occurring today. The bank pays 8% interest, compounded annually. You expect to receive annual raises of 3%, which will offset inflation, and you will let the amount you deposit each year a

    Rate of Return on a Stock

    As an equity analyst you are concerned with what will happen to the required return to Universal Toddler Industries's stock as market conditions change. Suppose rRF = 5%, rM = 12%, and bUTI = 1.4. (a) Under current conditions, what is rUTI, the required rate of return on UTI stock? (b) Now suppose rRF (1) increases to 6% or

    Insurance Coinsurance Pay

    Michael Howitt of Berkley, Michigan, recently had his gallbladder removed. His total bill for this event, which was his only health care expense for the year, came to $13,890. His health insurance plan has a $500 annual deductible and an 80/20 coinsurance provision. The cap on Michael's coinsurance share is $2,000. a. How muc

    Risks in Common Stocks

    Select a portfolio of common stocks in five companies whose stock is traded on the New York Stock Exchange (NYSE). Base your selection of stocks on your own personal willingness to take risks. Look up the beta of each company. Using equal weights, compute the portfolio beta, showing your work. Discuss how the portfolio beta comp

    When NPV Equals Zero

    Which one of the following is FALSE for a project whose NPV equals zero? 1) The project earns more than the required return. 2) The projects cash outflows are equal to the present value of the cash inflows. 3) The project will have no impact on firm value. 4) The IRR is equal to the required rate of return

    Ethically behaving corporations

    Do corporations have any responsibilities to society at large? Is stock price maximization good or bad for society? Discuss why firms should behave ethically. Define "ethically."( this is not an assignment) I need at least 300 words

    Time value of money SLP 1

    Select a publicly traded U.S. company that has paid a dividend for at least the last three years, and conduct a financial ratio analysis. You will be using this company for other assignments in this course; thus, please spend adequate time locating a company. Please consider reviewing http://finance.yahoo.com to locate a company

    Explanations of How to Calculate Interest Rates

    a. What amount of money should you pay each month to retire a $12000 debt in five years if the interest rate on money is 10% nominal annual interest rate compounded monthly? b. What amount of money today is equivalent to $100 per month compounded quarterly for ten years at 5%? c. If you buy a piece of land for $10,000 and

    Investments compounded annually

    a. What amount of money should you put in the bank today so that you will have $12,000 at the end of six years if you can earn 8% compounded annually? b. How much money should you save annually so that you will have $1500 after eight years if you can earn 9% compounded annually? c. What interest rate would allow you to ac

    Problems regarding interest rates

    a. If you put $1200 in the bank now, how much will you have after six years? What if you earn 12% compounded interest per year? b. If you buy a painting for $300 and are able to sell it after 4 years for $500, what was your effective annual interest rate on your investment? c. What is the effective interest rate of an adve

    Time Value of Money & Risk and Return

    1. Discuss the time value of money and its importance. Explain the relationship of discounting and compounding. Suppose you were considering depositing your savings in one of three banks, all of which pay 5 percent interest; bank A compounds annually, bank B compounds semiannually, and bank C compounds daily. Which bank would y

    Finance Questions: Stock Prices, Gold Value

    A stock is expected to pay a dividend of $2 per share in one month and in four months. The stock price is $40 and the risk-free rate of interest is 6% per annum with continuous compounding for all maturities. An investor has just taken a short position in a five-month forward contract on the stock. What are the forward price an

    Exxon: Ethical responsibility and shareholder value

    Documents uncovered after the Exxon Valdez oil spill in Alaska revealed that Exxon could have used double-hulled oil tankers that would have prevented the spill, but the cost of refitting their fleet of single-hulled tankers was considered too high. Exxon determined that the cost of cleaning up an oil spill would be less than th

    Basic Word Problems in Algebra

    1. Use the appropriate form of the percentage formula. Find P if R=6623% and B=150. 2. The formula Total cost=Cost+Shipping cost+Installation is used to find the total cost of a business asset. The formula can be written in symbols as T=C+S+I. Solve the formula for I, the installation cost of the asset. 3. Complete the inc

    Finance Questions: Practice

    1. One manufacturer needs to calculate the net price of an order with a list price of $900 and a trade discount series of 10/8/5. Use the net decimal equivalent to find the net price. 2. Find the acid-test ratio for a business if the balance sheet shows the following amounts: cash, $32,776; receivables, $13,039; marketable

    Cost of Reinvested Capital

    9-11 Cost of reinvested profits and new common shares - CAPM Using the data for each firm shown in the following table, calculate the cost of reinvested profits and new common shares using the CAPM. P0 Rf Market Total of Firm

    Future Value/Interest Question Sample Solutions

    18. Find the amount that should be set aside today to yield the desired future amount. Future amount needed $9000 Interest rate 48% Compounding period Quarterly Investment time 4 years 19. Rosa Burnett needs $6,000 in three years to make the down payment on a new car. How much must she invest today if she receives 2.5

    Calculating the future value and effective rate

    15. Compute the compound amount and the interest on a loan of $10,800 compounded annually for five years at 8%. Use the $1.00 future value table or the future value and compound interest formula. 16. John Smith has $9,000 that he plans to invest in a compound-interest-bearing instrument. His investment agent advises him th

    Interest And Future Income Calculations

    Here are two questions regarding the interest and investments. Margaret Hillman invested $8,000 at 1.8% compounded quarterly for one year. Find the future value and the interest earned for the year. How much should Linda Bryan set aside now to buy equipment that costs $6,200 in one year? The current interest rate is 0.95

    Sample Interest and Effective Rate Calulcation

    8. A loan for $3,500 with a simple annual interest rate of 11% was made on September 5 and was due on November 21. Find the ordinary interest. 9. Find the discount and proceeds on a $3,220 face-value note for three months if the discount rate is 9.5%. (Use the banker's rule.) 11.Shanquayle Jenkins needs to calculate the

    Calculating the break even bonus amount

    Your salary for the coming year is $100,000 (payable one year from now) and you expect to work for another 30 years. You expect your annual base salary to grow at a 4% annual rate during the remainder of your career. Your company's pension plan calls for you to receive a yearly pension payment after you retire equal to 25% of yo