Financial Theory Knowledge Check - Solutions

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Oklahoma State University *

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Apr 3, 2024

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xlsx

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1) N 7 84 I 8% 0.006666666667 PV $0.00 PMT ? ($445.98) FV 50000 2) N $120.00 I 0.0083333333 PV ? ($158,909.44) PMT 2100 FV 0 3) N 30 360 N 120 I 4% 0.003333333333 I 0.0033333333 PV 170000 PV 170000 PMT ($811.61) PMT ($811.61) FV 0 FV ($133,932.73) 4) 3% 5% time 0 1 2 3 4 5 cf 35000 36050 37131.5 38245.445 39392.81 buy/sell 1000000 Total cf 35000 36050 37131.5 38245.445 1039393 NPV $943,963.42 5) You want to purchase a house in seven years and expect that you will need a down payment of $50,000 to purchase the house. If you can earn an 8% annual rate of interest on your investment, what constant amount do you have to invest at the end of each month will be worth $50,000 at the end of seven years? If your tenant pays you rent of $2,100 a month at the end of the month for 10 years, what is the present value of the series of payments discounted monthly at a 10% annual rate? You bought a home 10 years ago using a $170,000, 30-year mortgage at a rate of 4%. You are selling your home at the end of this month (the end of 10 years). How much do you owe to the bank upon selling? You are going to buy a commercial property where the tenants pays rent of $35,000 in the first year. The lease states that the each year after that. You plan to sell the property at the end of the fifth year for $1,000,000. Assume that the rent is paid ann other words, at the end of each year for the year just gone, rather than paid at the start of the year, in advance for the coming earn a 5% rate of return. What should you pay for this property. You are looking at a rental that pays you $20,000 the first year, $20,400 in year 2, $20,808 in year 3, and $21,224 in year 4. A words, at the end of each year for the year just gone, rather than paid at the start of the year, in advance for the coming yea end of year 4 for $75,000, what would your rate of return be?

time 0 1 2 3 4 cf 20000 20400 20808 21224 buy/sell -70000 75000 Total cf -70000 20000 20400 20808 96224 IRR 30% 6 5% time 0 1 2 3 4 cf 20000 20400 20808 21224 buy/sell Total cf 20000 20400 20808 21224 NPV $72,986.79 You are looking at a rental that pays you $20,000 the first year, $20,400 in year 2, $20,808 in year 3, and $21,224 in year 4. . you pay for this investment?

e rent grows by 3% nually in arrears (in g year). You want to Assume that the rent is paid annually in arrears (in other ar). If you paid $70,000 for the property and sold it at the

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If you need to make 4% rate of return. How much would

Interes only loan PV 100000 N 5 60 7.50% 0.00625 Fv 0 Pmt Loan Interes quaterly PV 100000 N 5 20 0.085 0.018875 Fv 0 Pmt ($6,049.48) PV 200000 pmt 1688 1432 N 180 240 FV 0 0 pmt(

7500 ($1,512.37) 0.75

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1) fv 50000 50000 r 8% 0.006667 pmt ($445.98) ($445.98) pv 0 0 n 7 84 2) pv $158,909.44 3) pmt ($811.61) fv ($133,932.73) 4) time 0 1 2 3 4 5 cf 35000 36050 37131.5 38245.45 39392.81 buy/sell 1000000 total cf 35000 36050 37131.5 38245.45 1039393 npv $943,963.42 5) time 0 1 2 3 4 cf 20000 20400 20808 21224 buy/sell -70000 75000 Total cf -70000 20000 20400 20808 96224 irr 30.40% You want to purchase a house in seven years and expect that you will need a down payment of $50,000 to purchase the house. If you can earn an 8% annual rate of interest on your investment, what constant amount do you have to invest at the end of each month will be worth $50,000 at the end of seven years? If your tenant pays you rent of $2,100 a month at the end of the month for 10 years, what is the present value of the series of payments discounted monthly at a 10% annual rate? You bought a home 10 years ago using a $170,000, 30-year mortgage at a rate of 4%. You are selling your home at the end of this month (the end of 10 years). How much do you owe to the bank upon selling? You are going to buy a commercial property where the tenants pays rent of $35,000 in the first year. The lease stat by 3% each year after that. You plan to sell the property at the end of the fifth year for $1,000,000. Assume that th in arrears (in other words, at the end of each year for the year just gone, rather than paid at the start of the year, in coming year). You want to earn a 5% rate of return. What should you pay for this property. You are looking at a rental that pays you $20,000 the first year, $20,400 in year 2, $20,808 in year 3, and $21,224 i (in other words, at the end of each year for the year just gone, rather than paid at the start of the year, in advance property and sold it at the end of year 4 for $75,000, what would your rate of return be?

tes that the rent grows he rent is paid annually n advance for the in year 4. Assume that the rent is paid annually in arrears e for the coming year). If you paid $70,000 for the

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Related Questions

Calculate I/YR with: PV = $1,750.22 FV = $1,000 N = 5 PMT = $80 please

Present and future values of $1 at 3% are presented below: N FV $1 PV $1 FVA $1 PVA $1 FVAD $1 PVAD $1 1 1.03000 0.97087 1.0000 0.97087 1.0300 1.00000 2 1.06090 0.94260 2.0300 1.91347 2.0909 1.97087 3 1.09273 0.91514 3.0909 2.82861 3.1836 2.91347 4 1.12551 0.88849 4.1836 3.71710 4.3091 3.82861 5 1.15927 0.86261 5.3091 4.57971 5.4684 4.71710 6 1.19405 0.83748 6.4684 5.41719 6.6625 5.57971 7 1.22987 0.81309 7.6625 6.23028 7.8923 6.41719 8 1.26677 0.78941 8.8923 7.01969 9.1591 7.23028 9 1.30477 0.76642 10.1591 7.78611 10.4639 8.01969 10 1.34392 0.74409 11.4639 8.53020 11.8078 8.78611 11 1.38423 0.72242 12.8078 9.25262 13.1920 9.53020 12 1.42576 0.70138 14.1920 9.95400 14.6178 10.25262 13 1.46853 0.68095 15.6178 10.63496 16.0863 10.95400 14 1.51259 0.66112 17.0863 11.29607 17.5989 11.63496 15 1.55797 0.64186 18.5989 11.93794 19.1569 12.29607 16 1.60471 0.62317 20.1569 12.56110 20.7616 12.93794 Debbie has $368,882 accumulated in a 401K plan. The fund…

Present and future values of $1 at 3% are presented below: N FV $1 PV $1 FVA $1 PVA $1 FVAD $1 PVAD $1 1 1.03000 0.97087 1.0000 0.97087 1.0300 1.00000 2 1.06090 0.94260 2.0300 1.91347 2.0909 1.97087 3 1.09273 0.91514 3.0909 2.82861 3.1836 2.91347 4 1.12551 0.88849 4.1836 3.71710 4.3091 3.82861 5 1.15927 0.86261 5.3091 4.57971 5.4684 4.71710 6 1.19405 0.83748 6.4684 5.41719 6.6625 5.57971 7 1.22987 0.81309 7.6625 6.23028 7.8923 6.41719 8 1.26677 0.78941 8.8923 7.01969 9.1591 7.23028 9 1.30477 0.76642 10.1591 7.78611 10.4639 8.01969 10 1.34392 0.74409 11.4639 8.53020 11.8078 8.78611 11 1.38423 0.72242 12.8078 9.25262 13.1920 9.53020 12 1.42576 0.70138 14.1920 9.95400 14.6178 10.25262 13 1.46853 0.68095 15.6178 10.63496 16.0863 10.95400 14 1.51259 0.66112 17.0863 11.29607 17.5989 11.63496 15 1.55797 0.64186 18.5989 11.93794 19.1569 12.29607 16 1.60471 0.62317 20.1569 12.56110 20.7616 12.93794 Rosie's Florist borrows $300,000 to be paid off in six…

All is calculated i need only last EUAC calculation

6. Multiple Choice $25,116. $24,384. $20,833. $21,458.

PV$1 PVA FV$1 FVA 3 0.77218 2.5313 1.2950 %6 3.2781 4 6% 0.79209 3.4651 1.2625 4.3746 8% 0.68058 3.9927 1.4693 5.8666 5% 0.74622 5.0757 1.3401 6.8019 10 4% 0.67556 8.1109 1.4802 12.0061 0.76567 10.4148 1.3060 13.6022 12 2.25% 42.5803 1.2705 54.0978 48 0.50% 0.78710

Bramble Corporation is a small wholesaler of gourmet food products. Data regarding the store's operations follow: • Sales are budgeted at $340,000 for November, $320,000 for December, and $310,000 for January. . Collections are expected to be 80% in the month of sale and 20% in the month following the sale. • The cost of goods sold is 75% of sales. • The company would like to maintain ending merchandise inventories equal to 60% of the next month's cost of goods sold. Payment for merchandise is made in the month following the purchase. . Other monthly expenses to be paid in cash are $24,000. . Monthly depreciation is $15,000. Ignore taxes. ● Assets Cash Balance Sheet October 31 Accounts receivable Merchandise inventory Property, plant and equipment, net of $572,000 accumulated depreciation Total assets Liabilities and Stockholders' Equity Accounts payable Common stock Retained earnings Total liabilities and stockholders' equity The difference between cash receipts and cash disbursements…

0 1 2 3 4 -1000 400 500 700 900 WACC=10% Calculate NPV IRR PB DPB

A 12-cylinder heavy-duty diesel engine will have a guaranteed residual value of $1,000 in five years. Today (year 0) the equivalent worth of this engine is how much if the interest rate is 9% per year? Click the icon to view the interest and annuity table for discrete compounding when i = 9% per year. Today (year 0) the equivalent worth of this engine is $ (Round to the nearest cent.)

Find v in question c and find c in question d

What would be the formulas for these?

Present and future value tables of $1 at 3% are presented below: FV $1 PV $1 FVA $1 PVA $1 FVAD $1 PVAD $1 1.03000 0.97087 1.0000 0.97087 1.0300 1.00000 2. 1.06090 0.94260 2.0300 1.91347 2.0909 1.97087 3 1.09273 0.91514 3.0909 2.82861 3.1836 2.91347 4 1.12551 0.88849 4.1836 3.71710 4.3091 3.82861 1.15927 0.86261 5.3091 4.57971 5.4684 4.71710 9. 1.19405 0.83748 6.4684 5.41719 6.6625 5.57971 7 1.22987 0.81309 7.6625 6.23028 7.8923 6.41719 8 1.26677 0.78941 8.8923 7.01969 9.1591 7.23028 9. 1.30477 |0.76642 10.1591 7.78611 10.4639 8.01969 10 1.34392 0.74409 11.4639 8.53020 11.8078 8.78611 11 1.38423 0.72242 12.8078 9.25262 13.1920 9.53020 12 1.42576 0.70138 14.1920 9.95400 14.6178 10.25262 13 1.46853 0.68095 15.6178 10.63496 16.0863 10.95400 14 1.512590.66112 17.0863 11.29607 17.5989 11.63496 15 1.55797 0.64186 18.5989 11.93794 19.1569 12.29607 16 1.60471 0.62317 20.1569 12.56110 20.7616 12.93794 Prey 8 of 15 Next

Present and future value tables of $1 at 3% are presented below: N FV $1 PV $1 FVA $1 PVA $1 FVAD $1 PVAD $1 1 1.03000 0.97087 1.0000 0.97087 1.0300 1.00000 2 1.06090 0.94260 2.0300 1.91347 2.0909 1.97087 3 1.09273 0.91514 3.0909 2.82861 3.1836 2.91347 4 1.12551 0.88849 4.1836 3.71710 4.3091 3.82861 5 1.15927 0.86261 5.3091 4.57971 5.4684 4.71710 6 1.19405 0.83748 6.4684 5.41719 6.6625 5.57971 7 1.22987 0.81309 7.6625 6.23028 7.8923 6.41719 8 1.26677 0.78941 8.8923 7.01969 9.1591 7.23028 9 1.30477 0.76642 10.1591 7.78611 10.4639 8.01969 10 1.34392 0.74409 11.4639 8.53020 11.8078 8.78611 11 1.38423 0.72242 12.8078 9.25262 13.1920 9.53020 12 1.42576 0.70138 14.1920 9.95400 14.6178 10.25262 13 1.46853 0.68095 15.6178 10.63496 16.0863 10.95400 14 1.51259 0.66112 17.0863 11.29607 17.5989 11.63496 15 1.55797 0.64186 18.5989 11.93794 19.1569 12.29607 16 1.60471 0.62317 20.1569 12.56110 20.7616 12.93794 Shelley wants to cash in her winning lottery…

32 FIFO Average-Cost LIFO 33 31 34 2023 $28,000 $25,100 $21,600 35 36 2024 32,800 27,500 23,900 37 2025 28,300 38 26,200 22,900 39 2026 31,500 27,700 23,100 40 41 42 43 (Ignore tax considerations.) 44 ow 45 46 5 47 (a1) 48 ye 49 50 51 e Iha Your answer is partially correct. 52 53 54 55 Assume that in 2026 Pharoah decided to change from the FIFO method to the average-cost method of pricing inventories. Prepare the journal entry necessary for the change that took place during 2026. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. List debit entry before credit entry.) 56 57 Account Titles and Explanation Retained Earnings Inventory Debit Credit 58 59 60 61 62 63 64 65 66 67 68 SUPPORT 69

How do I enter this in my calculator to solve? 11. FV = PV(1+r/m)^mt %3D 10,000 = $4,476.20(1+r/1)^(1*10) = 8.37%

CP-TVM-submit in Canvas Use these factors to answer questions (ROUND ANSWERS TO NEAREST DOLLAR) FV$1 PVA FVA 4 1.36049 3.31213 4.5061 5 6% 0.74726 1.33823 4.21236 5.6371 60 0.50% 0.74137 1.34885 51.72556 69.7700 n i 8% PV$1 0.73503 1. You want to have $30,000 at the end of 5 years to buy a new car. How much should you save each month to achieve your goal if you can earn 6% ? $ 2. You want to buy a $25,000 car today and will be making monthly payments for the next 5 years. What is your car payment if your borrowing rate is 6%? $_ 3. You invest $10,000 today in an account and will leave the money invested for 4 years. Your average investment rate is 8%, what amount will you have in the account at the end of the 4 years? $ 4. You plan to invest $1,000 every year for the next 5 years. What will be the value of your investment at the end of the 5 years if you can earn 6% annual interest? $_ 5. Your grandparents have decided to give you $20,000 in 4 years for graduate school. Assuming your…

5 ar Consider the following table: Vehicle #1 $24,350 W x What is the value of y? 2.24 1.03 1.45 1.72 Vehicle #2 $34,890 1 Z Vehicle #3 $59,980 y 100

-50 -100 100 Chart Title 50 50 0 25 50 100 125 150 175 ⚫Own Assest Own Put Protective Put

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