1. Mr.SottowonPHP10millioninthelottery.Hewasveryexcitedtocollecthiswinnings and had several plans for his PHP10 million. He would buy his dream house, car, and a lot more. However, he was very disappointed when the officers from PCSO said that he will not get his PHP10 million pesos upfront. He, however, has the followingoptions: • Get 8.1 millionupfront • Receive 1 million every year for 10years Receive 1.8 million every year for 5years The current government bonds have a yield of 5% per annum. Which is the best option?

1. Mr.SottowonPHP10millioninthelottery.Hewasveryexcitedtocollecthiswinnings and had several plans for his PHP10 million. He would buy his dream house, car, and a lot more. However, he was very disappointed when the officers from PCSO said that he will not get his PHP10 million pesos upfront. He, however, has the followingoptions: • Get 8.1 millionupfront • Receive 1 million every year for 10years Receive 1.8 million every year for 5years The current government bonds have a yield of 5% per annum. Which is the best option?

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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2. Jane Summers has just inherited millions from her mother's estate. She is considering investing part of these funds in a small catering business. She would need to purchase a delivery van, equipment, and inventory costing $150,000 to equip the business. Jane's marketing studies indicate that the annual net cash inflow from the business will amount to $36,000. Jane wants to operate the catering business for only 6 years. She estimates that the equipment will have a $10,000 salvage value at the end of that time and that she will just retire and close down the business. Jane's required rate of return is 10%. (Note: relevant present value tables are in the textbook in ch 26 at pg 1121, or use from other sources, as desired.)Required:Compute the net present value of this investment. What would you advise Jane based on your calculations? Show your calculations, including any present value table amounts.
W3.Part 2 – You have $10,000 to invest. Your Grandmother, who doesn’t trust banks, has advised you to put the money under your mattress to save for the future. Conversely, your Mother suggests you open a savings account at a bank. In your town, the banks are currently offering 3% interest. One bank (Bank A) compounds the interests each quarter (March 31, June 30, September 30, and December 31). The other bank (Bank B) compounds the interest on an annual basis (December 31). Assuming you would save your money for the next 10 years, what would your balance be in Bank A and in Bank B? Please describe your calculations within your response.
Im struggling to to do this question. My main concern is part (c).
3. Mr. Arroyo purchased a brand new car. If he paid Php 750,000 as down payment and paid the balance at Php 10,000 monthly, find the cash value of the car.
How do I work this problem in excel? You have been offered $3,000 in 4 years for providing $2,000 today into a business venture with a friend. If interest rates are 10%, is this a good investment for you?
A8) Gerry is considering buying a small business that makes t-shirts. He plans on running the business for 17 years before selling it. He expects to make $25,506 each semiannual period for the 17 years that he owns the business with his first $25,506 realized at the end of the first semiannual period. He has also contracted with 3 large events to make t-shirts that will generate cash flows of $17,639, $22,850, and $11,555 in 3 years, 9 years and 13 years respectively. At the end of year 17 he plans to sell the business of $186,090 after collecting the $25,506 in annual revenue. How much should he pay for the business if the interest rate is currently 13.63%
Elise and Carlo would like to accumulate three times their monthly expenses in monetary assets. They currently have Php2,800 in their money market account, and their monthly expenses are Php4,500. How much more do they need in their money market account to reach their goal? Note: The Answer should be 10,700pesos
A European option is an option contract that allows the holder to: O exercise the option only on the expiration dateO exercise the option on or before the expiration dateO exercise the option before but not on the expiration dateO exercise the option after the expiration date
Illustrate the cash flow of the two offers using a time-diagram.
David and Rita Richardson saved all their married life to open a homestay named T-Lights. They invested RM100,000 of their own money and the corporation issued common stock to them. The business then got a RM100,000 bank loan for the RM200,000 needed to get started. The corporation bought a run-down old colonial home in Ipoh for RM80,000. It cost another RM50,000 to renovate. They found most of the furniture at antique shops and flea markets – total cost was RM20,000. Kitchen equipment cost RM10,000, and a Dell computer set cost RM2,000. Prior to the grand opening, the banker requests a report on their activities thus far. T-Lights’ bank statement shows a cash balance of RM38,000. They feel pretty good with that much net income in only six months. To better understand how well they are doing, they prepare the following statement for presentation to the bank: T-Lights Income Statement Six Months Ended 30 June 2020 Revenues: Investment by owner Bank loan RM100,000 100,000…

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