Marian Plunket owns her own business and is considering an investment. If she undertakes the investment, it will pay $40,000 at the end of each of the next 3 years. The opportunity requires an initial investment of $ 10,000 plus an additional investment at the end of the second year of $50,000. What is the NPV of this opportunity if the interest rate is2% per year? Should Marian take it?
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- Marian Plunket owns her own business and is considering an investment. If she undertakes the investment, it will pay $4,440 at the end of each of the next 3 years. The opportunity requires an initial investment of $1,110 plus an additional investment at the end of the second year of $5,550. What is the NPV of this opportunity if the interest rate is 1.5% per year? What is the NPV of this opportunity if the interest rate is 1.5% per year? The NPV of this opportunity is $_______ (Round to the nearest cent)Your client is 38 years old. She wants to begin saving for retirement, with the first payment to come one year from now. She can save $14,000 per year, and you advise her to invest it in the stock market, which you expect to provide an average return of 8% in the future. If she follows your advice, how much money will she have at 65? Do not round intermediate calculations. Round your answer to the nearest cent. $ How much will she have at 70? Do not round intermediate calculations. Round your answer to the nearest cent. $ She expects to live for 20 years if she retires at 65 and for 15 years if she retires at 70. If her investments continue to earn the same rate, how much will she be able to withdraw at the end of each year after retirement at each retirement age? Do not round intermediate calculations. Round your answers to the nearest cent. Annual withdrawals if she retires at 65: $ Annual withdrawals if she retires at 70: $Your client is 31 years old. She wants to begin saving for retirement, with the first payment to come one year from now. She can save $14,000 per year, and you advise her to invest it in the stock market, which you expect to provide an average return of 11% in the future. If she follows your advice, how much money will she have at 65? Do not round intermediate calculations. Round your answer to the nearest cent. $ How much will she have at 70? Do not round intermediate calculations. Round your answer to the nearest cent. $ She expects to live for 20 years if she retires at 65 and for 15 years if she retires at 70. If her investments continue to earn the same rate, how much will she be able to withdraw at the end of each year after retirement at each retirement age? Do not round intermediate calculations. Round your answers to the nearest cent. Annual withdrawals if she retires at 65: $ Annual withdrawals if she retires at 70: $
- Professor Wendy Smith has been offered the following opportunity: A law firm would like to retain her for an upfront payment of $49,000. In return, for the next year the firm would have access to eight hours of her time every month. As an alternative payment arrangement, the firm would pay Professor Smith's hourly rate for the eight hours each month. Smith's rate is $550 per hour and her opportunity cost of capital is 16% per year. What does the IRR rule advise regarding the payment arrangement? (Hint: Find the monthly rate that will yield an effective annual rate of 16%.) What about the NPV rule? The annual IRR is ☐ %. (Round to two decimal places.)Kala wants to save money to buy a motorcycle. She invests in an ordinary annuity that earns 4.8% interest, compounded annually. Payments will be made at the end of each year. 圖 00 How much money will she need to pay into the annuity each year for the annuity to have a total value of ss000 after 3 years? Do not round intermediate computations, and round your final answer to the nearest cent. If necessary, refer to the ilist of financial formulas.David is interested in a rental apartment that would supply him with $60,000 at the end of year 1, $65,000 at the end of year 2, $59,000 at the end of year 3, $63,000 at the end of year 4, and $61,000 at the end of year 5. Also, he will sell the apartment for $1m at the end of year 5. • How much should David pay for this investment if he wants to earn 10 percent on his investment? • If the acquisition costs are $800,000, would David buy this apartment? What is IRR? PV of Time of cash flow Cash flow cash flow, 10% 1 4. Total: 2.
- Barbara has a sum of money to invest. She has two options. One offers a 24% rate compounded yearly where no interest is given for a fraction of a year. The other offers a 12% rate compounded monthly. If, unexpectedly, she had to retrieve her money after exactly 23 months, which option would be more profitable?Professor Wendy Smith has been offered the following opportunity: A law firm would like to retain her for an upfront payment of $50,000. In return, for the next year the firm would have access to eight hours of her time every month. As an alternative payment arrangement, the firm would pay Professor Smith's hourly rate for the eight hours each month. Smith's rate is $540 per hour and her opportunity cost of capital is 16% per year. What does the IRR rule advise regarding the payment arrangement? (Hint: Find the monthly rate that will yield an effective annual rate of 16%.) What about the NPV rule? The annual IRR is %. (Round to two decimal places.)Professor Wendy Smith has been offered the following opportunity: A law firm would like to retain her for an upfront payment of $49,000. In return, for the next year the firm would have access to eight hours of her time every month. As an alternative payment arrangement, the firm would pay Professor Smith's hourly rate for the eight hours each month. Smith's rate is $550 per hour and her opportunity cost of capital is 16% per year. What does the IRR rule advise regarding the payment arrangement? (Hint: Find the monthly rate that will yield an effective annual rate of 16%.) What about the NPV rule? The annual IRR is 14.96 %. (Round to two decimal places.) The IRR rule advises: (Select the best choice below.) A. Since the IRR is less than the cost of capital, 16%, Smith should turn down this opportunity. OB. With an IRR of 16% and with Smith's cost of capital at 14.96%, according to the IRR rule, she should reject this opportunity. C. Since the IRR is less than the cost of capital, 16%,…
- Alice is considering an investment. If she undertakes the investment, she will receive $5000 at the end of each of the next four years. The opportunity requires an initial investment of $2000 plus an additional investment at the end of the third year of $6000. What is the NPV of this opportunity if the interest rate is 5% per year? Should Alice take it? Maximum size for new files: 100MBYour client is 31 years old. She wants to begin saving for retirement, with the first payment to come one year from now. She can save $1,000 per year, and you advise her to invest it in the stock market, which you expect to provide an average return of 8% in the future. If she follows your advice, how much money will she have at 65? Do not round intermediate calculations. Round your answer to the nearest cent. $ How much will she have at 70? Do not round intermediate calculations. Round your answer to the nearest cent. $ She expects to live for 20 years if she retires at 65 and for 15 years if she retires at 70. If her investments continue to earn the same rate, how much will she be able to withdraw at the end of each year after retirement at each retirement age? Do not round intermediate calculations. Round your answers to the nearest cent. Annual withdrawals if she retires at 65: $ Annual withdrawals if she retires at 70: $Angela wishes to buy a boat in five years that presently costs $150,000. She expects the cost of the boat to increase due to inflation by 3% per year for the next two years and 4% per year the following three years. She also wants to spend $50,000 per year for 6 years beginning at the end of 10 years from today. How much must she save each year for the next 5 years if she can earn 6% on her investments? a. $66,302.67 b. $64,347.13 c. $65,946.95 d. $61,349.81 e. None of these are correct