exam 2
xlsx
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School
New Jersey Institute Of Technology *
*We aren’t endorsed by this school
Course
334
Subject
Finance
Date
Jan 9, 2024
Type
xlsx
Pages
16
Uploaded by CaptainCrowMaster987
i
i
0.2500%
F/p
P/F
F/A
A/F
P/A
n
4
1.0100375625391 0.990062
4.015025
0.249064
3.975124
i=11%/12
1
($293.52)
ok
see A/P function must be stated
i=11%/12
2
($9,588.09)
ok
see P/A function must be stated
3 86.956521739131 ok
i
4 8.462=9*2^b
b ln2=ln (8.462/9)
0.940222 -0.088926
t1000
4.869267
97.38533
II=
3%
5 4000.1500024989
see F/A
4015.025
6
7 =-10000=1000*(1+7%)^4+A*(7%)/ ((1+7%)^5-1)
A=
-1871.567
($666.67)
0.549%
8 -844.8216137914
1999.993
=f * (p/f) =P* ( f/P)
8 892.15444891134
p*(F/P)
=5000*(f/p
8 47.332835119957
ok
9
6.589% ok
9
($666.67) 1 = p * (a/P)
A/P
these formula must be shown
0.251564
d
=14000*I3
d
=293.52*H3
p)
i
0.2500%
F/p
P/F
F/A
A/F
n
4
1.010038
0.990062
Err:509
0.249064
uestion1)
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P/A
A/P
these formula must be shown
Err:509
Err:509
IE 334 EXAM II-
2:30-3:50 PM, I
TC 2305
–Submit Manually, Excel via
Name and Signature : I will follow NJIT Honor code : . Question# 1
20%
2 20%
3 30%
4 30%
Answer IRR=
EUAW=
Pmt=
Balance=
Pmt=
NAME=
EUAW=
GRADE STEPS: 1-Solve the follow
ing prob
lems manually as illustrated in the slides, 2-Verify your results using the financial functions in “EXCEL” 3- Enter your answers in the above
table correctly. &
Subm
it your manual calculations and 4- Subm
it your Verification work and compounding table you build in Exce
l
Q1:
C
ALCULATE IRR
(20
PT
)
-
What is the IRR for the loan offered by the seller?
(Answer For
Two options to acquire a property priced at $500,000: 1) Finance through the seller with 15% down and the balance due in 5 annual payments a
2) Pay cash with 10% discount. Q2:
EUAW
C
ALCULATION (20
PT
)
What is the EUAW ?
Answer Format: $x.xx Given: Cash flows for an investment. Required: EUAW at 8% per year
. If there is a gradient, you must use Gradient function. Q3:
M
ORTGAGE P
ROBLEM (30
PT
)
(Answer Format: $xxxx.xx) Mary Smith took a car loan of $15,000 to pay back in 60 monthly installments at an interest r
understanding that the interest rate may be changed sometime in the future. Compute. (a)
the monthly payment for Mary (b)
the loan balance immediately after the 24
th
payment (c)
the monthly payment for the remainder of the loan if the interest rate is reduced to 9%
Q4:
A
NNUAL C
ASH F
LOW A
NALYSIS (30
PT
)
The following annual costs are associated with three new extruder machines being considere
Styrofoam cup plant. The company’s interest rate (MARR) is 8%. Which extruder should be Styrofoam company choose? Use Annual Cash Flow Analysis. Hint: Calculate EUAB and EUAC, then use EUAW to compare. Year 1 2 3 Cash flow $500 600 700
Which extruder should be Styrofoam company choose? Use Annual Cash Flow Analysis. Hint: Calculate EUAB and EUAC, then use EUAW to compare.
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mit Manually, Excel via CANVAS .
30%
4 30%
100% NAME=
EUAW=
culations and y the seller?
(Answer Format: x.xx)
ue in 5 annual payments at 10% mat: $x.xx stallments at an interest rate of 15% on the the future. Compute. rest rate is reduced to 9% machines being considered for use in a 1 2 3 4 5 $500 600 700 800 -2,500
i_2
15%
Price: $ 500,000.00 i_1=
(1+i)^n= k
1.61051
Alternative 1
Pay 15% DOWN
75,000 Pay A @10%,5 years
($112,113.93)
A= .85 P* ( A/P, i=10%, n=5) =.85*500K*.26
formula
0.26
NPV of totalpayments
=75000+ -PV(10%,5,112113.93) $500,000.00 75K you paid and A=112113 over 5 years to pay actually benefits you 450K todays PV(i_2,5,112113.93)=375000 at rate =
($374,999.89)
Alternative 1 is actually costing 15% since the actual ben
Formula
75000 +112113.93 *(P/A, i=?, n=5) = 450000
(P/A, i=?, n=5) = (450000-75000)/112113.93= (P/A,i=15%,n=5) =((((1+i_2)^5-1 ))/(((1+i_2)^5*i_2
3.34480373753392
p= A *(1+i)^n -1 )/ i*(1+i)^n)
75000+ -PV(
i%
,5,112113.93)=
PV(
i
%,5,112113.93)=
Q1:
C
ALCULATE IRR
(20
PT
)
-
What is the IRR for the loan offered by th
Two options to acquire a property priced at $500,000: 1) Finance through the seller with 15% down and the balance due 2) Pay cash with 10% discount.
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10%
n= 5
Alternative 2
Pay ALL @10% discount
$ 45,000,000 NPV of purchase is
450000
Actual Cost is 450K
By paying Alternative 1 payments, I gain the value of 450K
so equate the NPV OF Alt1 = 450000
find Irr
450000
=450000-75000=375000 at what interest rate
15.0927%
use GOAL SEEK or RATE formula
nefitt is 450000 not 500K
Find i
3.3448118356033 Use goal seek 2)))
@ i_2= 15.0927898720728%
=RATE(5,C16,375000
)
he seller?
(Answer Format: x.xx)
in 5 annual payments at 10%
Q2:
EUAW
C
ALCULATION (20
PT
)
What is the EUAW ?
Answer Format: $x.xx Given: Cash flows for an investment. Required: EUAW at 8% per year
. If there is a gradient, you must use Gradient function. Year 1 2 3 4 Cash flow $500 600 700 800
: $x.xx 2 3 4 5 00 600 700 800 -2,500
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Q3:
M
ORTGAGE P
ROBLEM (30
PT
)
(Answer Format: $xxxx.xx) Mary Smith took a car loan of $15,000 to pay back in 60 monthly installments at a
on the understanding that the interest rate may be changed sometime in the futu
(a)
the monthly payment for Mary (b)
the loan balance immediately after the 24
th
payment (c)
the monthly payment for the remainder of the loan if the interest rate is red
an interest rate of 15% ure. Compute. duced to 9%
Q4:
A
NNUAL C
ASH F
LOW A
NALYSIS (30
PT
)
The following annual costs are associated with three new extruder machines being considere
a Styrofoam cup plant. The company’s interest rate (MARR) is 8%. Which extruder should be Styrofoam company choose? Use Annual Cash Flow Analysis. Hint: Calculate EUAB and EUAC, then use EUAW to compare.
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