You win a lottery payout of $10,000 a year for the next 30 years. If your investment rate is 8 percent, how much would an acceptable lump sum payment be?
Q: A marketing manager leases a car for 24 months after agreeing to a negotiated price of $44,250 and…
A: Data given: Negotiated Price=$ 44250 Down payment = 20% of negotiated price Money factor=0.0022…
Q: You are offered a business partnership that guarantees you cash returns of $150,000 one year from…
A: Present value of future cash flows will be calculated in order to find out the total value of…
Q: In reviewing retirement portfolios, Kim determined the probability of a client owning stock is 0.50…
A: Given: Probability of owning stock P(S) = 0.50 Probability of owning Bonds P(B) = 0.40 Probability…
Q: what is the yield in percent, on the bond held to maturity?
A: Market Price of bond = $970 Future Value of bond after one year = $1,000 Formula:Current Value of…
Q: Discount Factor Year 1 0.833 Year 2 0.694 Year 3 0.579 Year 4 0.482 Required: Ascertain by computing…
A: As per our guidelines, we are supposed to answer only 3 sub-parts (if there are multiple sub-parts…
Q: Question 2 a) What is the user cost of capital in a firm’s investment decision? b) What are the…
A: Answer a:- Cost of capital plays an important role in evaluating investment projects of a firm.A…
Q: Cash Budget Activity Cash Receipts Less: Cash Disbursements Net: Cash Flow Add: Beginning Cash…
A: Cash Budget is forecasting of cash excess / short under cash budget we can calculate the Cash…
Q: 20. Suppose a set of apartments have a replacement cost of $1,472,000, and the contents are valued…
A: Data given: Value of building= $ 1472,000 Value of contents = $ 2,285,000 Territorial rating =5…
Q: Explain why Ghana is considered an importer of inflation and discuss possible policies to mitigate…
A: Inflation is referred as the rate, where the commodity prices continue to increase. When an amount…
Q: a) Table below shows the simplified balance sheet information for Jess Elton Enterprise. The debt…
A: WACC is the cost of raising capital from various sources by the company. It is calculated for…
Q: starting 1 year from today, you will get 20 annual payments of $1,000,000. But to get your money…
A: a) Part a of the question is an example of ordinary annuity. It means when regular payments are made…
Q: Standby power for a manufacturing firm is currently produced using diesel-powered generators. In…
A: NPV is a Capital Budgeting techniques which will help in decision making on the basis of future Cash…
Q: very morning, Bob Smith puts his stock pick of the week up on Yahoo! Finance for the world to see.…
A: Stock market is like a mystery and nothing can be predicted easily and slight experience would tell…
Q: 2. Sam and Deb have a weekly net income of $1700. Their monthly expenses, not related to housing,…
A: The income and savings are used to determine the financial stability of a household. These concepts…
Q: Current Attempt in Progress A county will invest $3,600,000 to clean up a chemical spill that…
A: The Benefit to Cost ratio is used to find out how risky the project is and to compare equivalent…
Q: Which one of the following is not resulted in capital formation? Mr. X buys the bonds of a company…
A: Capital formation is meaning is that the value of assets grow with the time and increase in value of…
Q: y 30% of the purchase price as a down payment. Find the down payment, amount of mortgage, and…
A: Loans are paid by the monthly payment that carry the payment for interest and payment for principal…
Q: years. Which option would result in the higher value to Betsy?
A: Present Value: The present value of the future amount is computed by the product of the future…
Q: Month-end payments of $1,410 are made to settle a loan of $119,660 in 8 years. What is the effective…
A: Data given: Loan amount =$ 119,660 Month end payment = $ 1410 n=8 years Required: Effective…
Q: Your insurance policy has matured today. Your Insurance company offers two options: (a) 500000 today…
A: When cash flows occur at different points of time, they have to be brought to the same point of time…
Q: answer these two questions. Thank you! 1. Determine the compound interest rate per year equivalent…
A: Simple interest rate is interest rate without the impact of compounding of interest. But effective…
Q: What is the accumulated value of periodic deposits of $3,000 made into an investment fund at the…
A: Information Provided: Periodic payment = $3000 Interest rate = 4.75% compounded semi-annually Years…
Q: When computing, please do not round off. Only final answers must be rounded off to two decimal…
A: Call option is a derivative contract in which option buyer has right to buy the underlying asset at…
Q: We project unit sales for a new household-use laser-guided cockroach search and destroy system as…
A: NPV is a capital budgeting tool to decide on whether the capital project should be accepted by the…
Q: How much will she have at 70? he expects to live for 20 years if she retires at 65 and for 15 years…
A: *Answer: a. The amount that she will have at the age of 65 is $423,504.48 Workings:
Q: To address the chronic traffic condition at a major thoroughfare, two plans are being considered.…
A: NPV is a capital budgeting techniques which help in calculating the present value of any project on…
Q: Veloo believes that the cash price of RM1400 and Nov futures price of RM1475 is mismatched. Today is…
A: A commodity futures contract is a contract to buy or sell a specified amount of a commodity at a…
Q: An outside consultant has suggested that because debt is cheaper than equity, the firm should switch…
A: Weighted average cost of capital is calculated as: = (Weight of Debt * After tax cost of debt) +…
Q: 12. Two alternatives have the cash flows as shown in the Table. At a 4% interest rate, the end of…
A: The Net Present value method will be used to evaluate the two alternatives. The Net Present Value is…
Q: Consider the information below about the following three stocks: AAA, BBB and CCC: Market Price…
A:
Q: Company ABC Inc. Market price of equity share= $5 12,000 equity shares issued @$4 each. Company also…
A: The P/E ratio is used for the valuation of the companies and to find out how they rank against each…
Q: You want to buy a car worth P1.5M. You can pay 40% of the price as down payment and the balance…
A: Loan amount = Car Price * (1- down payment %) = 1500000*(1-40%)…
Q: lem 2: Value of Control: Intrinsic Valuation Acquirer Corporation would like to purchase the equity…
A: The value of shares can be found out from the constant growth of dividends by assuming that growth…
Q: Leo makes one deposit today into his savings account earning an interest rate of 4% p.a. compounded…
A: Future value is the compounded value of a sum of money at a given interest rate for a specified…
Q: For the cash flows shown in the diagram, determine the value of x that will make the future worth in…
A: Future value of Annuity formula is Future value of first 5 years of Annuity x , at end of 5…
Q: Assume that you borrow 20million JPY from some bank repay 80,000 JPY monthly under the plan of total…
A: Here, To Find: Case-I: 1. Total number of months =? 2. Completed years =? 3. Remaining months =?…
Q: Anu wants to put aside an amount at the beginning of each month while working for the next 5 years…
A: " Hi, Thanks for the Question. Since, you asked multiple questions, we will answer first question…
Q: Bob tells his broker "I'll buy 2,000 shares of Gamestop with a maximum price of $136." This is…
A: Stock market provide the various types of orders for facilitating the investor to maximize his…
Q: Solve for the future value of $1,300 after 1 year invested at 4 percent if compounding is a) annual.…
A: Future value is the value of present investment in the future after compounding the present…
Q: The Buffalo News headline read “Start up by UB student sold for $250 million to major tech firm”.…
A: Present value of annuity With annuity (PMT), period (n) and interest rate (r), the present value is…
Q: 6. Kate earns 3.5% p.a. effective interest from her savings account. The inflation rate is 5.1% p.a.…
A: The Fisher equation is used to determine the relationship between real and nominal interest rates to…
Q: Emerald Enterprises is developing a new product at the cost of $ 50,000. The new product is expected…
A: Option b is correct i.e. 5 years. Refer calculation below.
Q: discuss four ethical issues found in the finance industry and responsible investing as a way to…
A: The insider trading, stakeholder interest against stockholder interest, investment management, and…
Q: Topic: Option Pricing When computing, please do not round off. Only final answers must be rounded…
A: Extrinisc value of the option is that worth of the option who's value is derived from the factors…
Q: Contract size (in number of shares) Current market value of an ABC Inc. share Exercise price for an…
A: Given: Particulars Current stock price 78.25 Standard deviation 36% Risk free rate 6.00%…
Q: nbay Corporation is interested in estimating its additional financing needed to support a growth in…
A: The company need the money for growth and expansion and to sustain the growth over the longer period…
Q: What is the present value of $900 to be received 10 years from now discounted back to the present…
A: Present value of cash flows is the value of receiving a future cash flow discounted back to the…
Q: Compute the amount or maturity value of a note at the end of 3 years, if the principal or face value…
A: Compound interest is one of the form of interest used for calculation. Under it, interest is charged…
Q: Find the BEY of a Treasury Strip that you can purchase for settlement on Oct. 24, 2019 at a quoted…
A: Here, Quoted Price is 89 Face Value is 100 Settlement Date is Oct-24,2019 Maturity Date is…
Q: b) A bond was issued on 1 July 2018. Below is the timeline of all cash flows payable by the bond…
A: A bond is a debt instrument that provides periodic interest to the owner and the face value at…
Step by step
Solved in 4 steps
- You are scheduled to receive $5,000 in two years. When you receive it, you will invest it at 6.5 percent per year. How much will your investment be worth eight years from now? Can the excel and calculator solutions be provided?An investment offers to pay you $10,000 a year for four years. If it costs $27,980, what will be your rate of return on the investment? Use Appendix D to answer the question. Round your answer to the nearest whole number.You can receive lottery winnings of either $800,000 now or $100,000 per year for the next 10 years. If your interest rate is 5% per year, which do you prefer?
- An investment offers to pay you $8,000 a year for five years. If it costs $28,840, what will be your rate of return on the investment? Use Appendix D to answer the question. Round your answer to the nearest whole number. %Suppose a lottery payout is $100,000 per year for the next ten years. If the annual interest rate is 5%, how much is this lottery prize worth today?Your investment advisor wants you to purchase an annuity that will pay you $35,000 per year for 10 years. If you require a 9% return, what is the most you should pay for this investment?
- You have just won the lottery and will receive $550,000 in one year. You will receive payments for 23 years, and the payments will increase 3 percent per year. If the appropriate discount rate is 10 percent, what is the present value of your winnings?A lottery winner will receive $5.5 million every 6 months for the next twenty years. What is the future value (FV) of his winnings at the time of the final payment, given that the interest rate is 5.50% per year?You have just won a lottery that promises an annual payment of $120000 beginning immediately. You will receive a total of 15 payments. If you can invest the cash flow in an investment that is paying 8% annually, what is the present value of this annuity?
- An investment promises to pay $7,000 at the end of each year for the next six years and $3,000 at the end of each year for years 7 through 10. Use Table II and Table IV or a financial calculator to answer the questions. Round your answers to the nearest cent. If you require a 15 percent rate of return on an investment of this sort, what is the maximum amount you would pay for this investment?$ Assuming that the payments are received at the beginning of each year, what is the maximum amount you would pay for this investment, given a 15 percent required rate of return?$You plan to purchase a rented house which you could rent to earn you an annual income of $12,000. The expected annual expenses of the house are $3,000. You plan to sell the house for $145,000 at the end of ten years .a. Draw a cash flow diagram for this investment if you consider 18% to be a suitable interest rateb. Determine how much you could afford to pay for it now.You are offered an investment that will pay you $2000 in one year, $4000 the next year, $6000 the next year, and $8000 at the end of the next year. You can earn 12 percent on very similar investments. What is the most you should pay for this one?