You have been offered a job with an unusual bonus structure. As long as you stay with the firm, you will get an extra $ 66 comma 000 every 7 years, starting 7 years from now. What is the present value of this incentive if you plan to work for the company for 42 years and the interest rate is 5 % (EAR)? (Note : Be careful not to round any intermediate steps less than six decimal places.)

You have been offered a job with an unusual bonus structure. As long as you stay with the firm, you will get an extra $ 66 comma 000 every 7 years, starting 7 years from now. What is the present value of this incentive if you plan to work for the company for 42 years and the interest rate is 5 % (EAR)? (Note : Be careful not to round any intermediate steps less than six decimal places.)

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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Professor Wendy Smith has been offered the following opportunity: A law firm would like to retain her for an upfront payment of $ 50 comma 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 15 % 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 15 %.) What about the NPV rule?
Professor Brad has been offered the following opportunity: A law firm would like to retain his for an upfront payment of $50000. In return, for the next year the firm would have access to eight hours of his time every month. As an alternative payment arrangement, the firm would pay Professor Brad's hourly rate for the eight hours each month. Brad's rate is $535 per hour and her opportunity cost of capital is 13 % 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 13 %.) What about the NPV rule? A. What is the IRR?
Assume that you will have a 10-year, $20,000 loan to repay when you graduate from college next month. The loan, plus 10 percent annual interest on the unpaid balance, is to be repaid in 10 annual installments of $3,255 each, beginning one year after you graduate. You have accepted a well-paying job and are considering an early settlement of the entire unpaid balance in just three years (immediately after making the third annual payment of $3,255). Prepare an amortization schedule showing how much money you will need to save to pay the entire unpaid balance of your loan three years after your graduation. (Round your answers to the nearest dollar amount. Enter all amounts as positive numbers.) Interest Period Date of Graduation Year 1 Year 2 Year 3 Annual Payment Annual Interest Expense @10% a. Actual net-of-tax interest cost b. Effective interest rate Reduction in Unpaid Balance Unpaid Balance One of the advantages of borrowing is that interest is deductible for income tax purposes. a.…
Assume that you will have a 10-year, $10,000 loan to repay when you graduate from college next month. The loan, plus 8 percent annual interest on the unpaid balance, is to be repaid in 10 annual installments of $1,490 each, beginning one year after you graduate. You have accepted a wellpaying job and are considering an early settlement of the entire unpaid balance in just three years (immediately after making the third annual payment of $1,490). Prepare an amortization schedule showing how much money you will need to save to pay the entire unpaid balance of your loan three years after your graduation. (Round amounts to the nearest dollar.)
You want to purchase a new company car for employees to visit clients. If you purhcase the car for $60,000 with a loan that has an APR of 12% in which interest accrues monthly, what would you expect the monthly payments to be if the term of the loan is 5 years? $1,683 $572 $1,322 $1,000
Suppose a recent college graduate's first job allows her to deposit $250 at the end of each month in a savings plan that earns 9%, compounded monthly. This savings plan continues for 14 years before new obligations make it impossible to continue. How much money has accrued in the account at the end of the 14 years? (Round your answer to the nearest cent.) $ If the accrued amount remains in the plan for the next 15 years without deposits or withdrawals, how much money will be in the account 29 years after the plan began? (Round your answer to the nearest cent.) $
You’ve just joined the investment banking firm of Dewey, Cheatum, and Howe. They’ve offered you two different salary arrangements. You can have $79,000 per year for the next two years, or you can have $68,000 per year for the next two years, along with a $24,000 signing bonus today. The bonus is paid immediately, and the salary is paid in equal amounts at the end of each month. If the interest rate is 9 percent compounded monthly, what is the value today of each option? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)
Please please solve in excel Only Only excel and show step

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