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You have your own practice as a trusts and estates attorney anda dient has sought your assistance with forming a trust for the benefit of her children. Tho client wants the trust to contain at least S1 million in 10 years. She beleves that a reasonable rate of return would be 5 percent compounded annually. What is the least amount, rounded to the nearest dollar, that the client could invest now for the trust to contain at least $1 milion 10 years from now? (A) $1,000,000 (B) $763,287 (C) $562,948 (D) $824,381 (E) $613,914

You have your own practice as a trusts and estates attorney anda dient has sought your assistance with forming a trust for the benefit of her children. Tho client wants the trust to contain at least S1 million in 10 years. She beleves that a reasonable rate of return would be 5 percent compounded annually. What is the least amount, rounded to the nearest dollar, that the client could invest now for the trust to contain at least $1 milion 10 years from now? (A) $1,000,000 (B) $763,287 (C) $562,948 (D) $824,381 (E) $613,914

Essentials Of Investments
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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Questlon 34. You have your own practice as a trusts and estates attorney and a client has sought your assistance with forming a trust for the benefit of her children. The client wants the trust to contain at least $1 milion in 10 years. She beleves that a reasonable rate of return would be 5 percent compounded annually. What is the least amount, rounded to the nearest dollar, that the client could invest now for the trust to contain at least $1 million 10 years from now? (A) $1,000,000 (B) $763,287 (C) $562,948 (D) $824,381 (E) $613,914 Question 35. A family-owned clothing retailer requires funds to purchase inventory each season. The retailer wants to have flexibility in how much of any borowed funds it will use, and therefore pay interest on, to make each of these purchases. In cortain cases, they would like to pay certain parts of the loan back as well while the loan remains in force. What type of financing makes the most sense for the clothing retailer to obtain? (A) A bond (B) A syndicated loan (C) A term loan (D) A letter of credit (E) A revolving credit facility Question 36. A lender wants to include the following provislon in a loan agreement: Section 3.XX. Consolidated Net Worth. Borrower shall not permit Consolidated Net Worth as of the last day of each fiscal quarter after March 31, 20XX to be less than $2,750,000. What type of covenant is Section 3.XX? (A) An affirmative covenant (B) An incurrence covenant (C) A maintenance covenant (D) A limitation on incurrence of Indebtedness (E) None of the above
Transcribed Image Text:Questlon 34. You have your own practice as a trusts and estates attorney and a client has sought your assistance with forming a trust for the benefit of her children. The client wants the trust to contain at least $1 milion in 10 years. She beleves that a reasonable rate of return would be 5 percent compounded annually. What is the least amount, rounded to the nearest dollar, that the client could invest now for the trust to contain at least $1 million 10 years from now? (A) $1,000,000 (B) $763,287 (C) $562,948 (D) $824,381 (E) $613,914 Question 35. A family-owned clothing retailer requires funds to purchase inventory each season. The retailer wants to have flexibility in how much of any borowed funds it will use, and therefore pay interest on, to make each of these purchases. In cortain cases, they would like to pay certain parts of the loan back as well while the loan remains in force. What type of financing makes the most sense for the clothing retailer to obtain? (A) A bond (B) A syndicated loan (C) A term loan (D) A letter of credit (E) A revolving credit facility Question 36. A lender wants to include the following provislon in a loan agreement: Section 3.XX. Consolidated Net Worth. Borrower shall not permit Consolidated Net Worth as of the last day of each fiscal quarter after March 31, 20XX to be less than $2,750,000. What type of covenant is Section 3.XX? (A) An affirmative covenant (B) An incurrence covenant (C) A maintenance covenant (D) A limitation on incurrence of Indebtedness (E) None of the above
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