Nominal annual interest rates are 7.3%. If a businessperson has an opportunity to invest $40,000 today and receive $60,000 in 5-years, should they undertake this investment? Support your answer with a computation and explain.
Q: ssume a project has normal cash flows. All else equal, whic llowing statements is correct? A…
A: The pay back period is the amount of time required to recover the initial amount of investment and…
Q: If you deposit $13,.224 annually at the end of every year in a bank account paying 8% annually. how…
A: Annual deposit (D) = $13,224 Period (n) = 5 Years Interest rate (i) = 8% (or 0.08) Amount saved at…
Q: A call center agent receiving a monthly salary of P21,000 with mandatory annual deductions of…
A: Gross salary is a monthly or annual salary of an individual before deducting any deductions
Q: Calculate the present value of an annuity
A: Present Value of Annuity: It refers to the present worth of the future annuity cash flow stream and…
Q: You would like to purchase a car that costs $47000 at 7% APR for 3 years. What is your monthly…
A: Cost (PV) = $47000 Interest rate = 7% Monthly interest rate (r) = 7%/12 = 0.583333333333333% Period…
Q: You have the following information: A B с Market Alpha 2% 3% 0% Beta 1.5 0.5 1 Res. 2.00% 0.90%…
A: Here,
Q: Find the compound interest earned if PhP 31,496 is deposited in a bank at 2.6% compounded monthly…
A: Solved using Financial Calculator PV = -31,496 N = 26 I/Y = 2.6/12 = 0.2167 CPT FV = 33,319.17
Q: Suppose a customer has to pay a total amount of PhP 20,676 as a payment of a personal loan at the…
A: Solved using Financial Calculator FV = 20,676 N = 3.5 * 4 = 14 I/Y = 4/4 = 1 CPT PV = 17,987.35
Q: The chart below shows the exchange rate between the U.S. dollar and Norway's currency, the kroner,…
A: Given, The chart that shows the exchange rate between US dollar and Kr.
Q: Compute the nominal annual rate of interest compounded quarterly at which $300.00 paid at the end of…
A: Solution:- When an equal amount is deposited each period at end of period, it is called ordinary…
Q: compounded monthly to have that amount when it is due? What is the interest rate per period? | M…
A: Present Value: It represents the present worth of the future amount and is estimated by discounting…
Q: A stock has a 15 percent change of moving either up or down per period and is currently priced at…
A: "Hi, Thanks for the Question. Since you asked multiple sub parts question, we will answer first…
Q: A Large pizza at Brismarcks’s pizzeria cost$6.80 plus $0.90 for each topping.The cost of a large…
A: Solution:- In order to find out the number of toppings, the total cost of pizza from both the pizza…
Q: Consider a borrowing of $400,000, with monthly payments to be made over 15 years with a 15% add-on…
A: Annual Percentage Rate = [( 1 + r/n)n ] -1 r = 15%/12 = 1.25% n = 12
Q: Suppose you take out a 20-year mortgage for a house that costs $399,842. Assume the following: The…
A: Here,
Q: You borrow $364000 for the the purchase of a house at an APR of 7.52% for 15 years. Your monthly…
A: A mortgage is a loan on a property for which the property itself is the collateral.
Q: Use the NPV method to determine whether Juda Products should invest in the following projects: •…
A: Answer 1:- The net present value (NPV) of a project is calculated as present value of cash inflows…
Q: Caddie Manufacturing has a target debt-equity ratio of .75. Its cost of equity is percent, and its…
A: The cost of capital is the rate of return that a company gives on all its capital whether it is…
Q: Problem 10 Determine the present value of each perpetuity shown in the following table. Annual…
A: Perpetuity Annual amount Discount rate A 30000 8% B 100000 12% C 20000 6% D 60000 5%
Q: expansion purposes. You decided to issue semi- annual R1 000 bonds which pay a coupon of 10% for a…
A: Price of bond is present value of coupon payment and present value of par value of the bond at…
Q: Suppose you had just gone long (purchased) on lot of Syarikat XYZ stock at a price of RM 15.00 each,…
A: Current Stock price is RM 15.00 Cost of 3-months put option us RM0.15 Put option is ATM(at the…
Q: An investor makes a single deposit of 10,000 into fund A for 10 years which earns a 6% effective…
A: Here,
Q: loyer offers a 401(k) plan with a 15% match, and you set a goal of retiring in 35 years with an…
A: The amount deposited grow with interest being accumulated over the period of time due to compounding…
Q: Chris invests $19,000 at 4% simple interest for 7 year. How much is in the account at the end of the…
A: Answer - Formula for Simple Interest : A = P(1 + rt) Given: First, converting R percent to r a…
Q: The legal document that spells out the rights of the bond holders and terms of a corporate bond is…
A: Solution:- When a company issues bond, it signs an agreement between the company and the bond…
Q: Consider the following potential investment. A 40-unit apartment building, built in 1980, is listed…
A: a) Gross potential Rent is the total amount the investor would receive without any scope of facing…
Q: The company's WACC is 8.5%. What is the IRR of the better project? (Hint: The better project may or…
A: Internal Rate of Return: IRR makes the project's net present value equal to zero. Thus, the present…
Q: 8) What lump sum should you deposit now at 1.6%, compounded continuously, to attain $750,000?
A: Present Value: It is the present worth of the future sum of the amount and is estimated by the…
Q: 17.) A crusher for use in a mining operation is expected to have a maintenance cost of $10,000 in…
A: Equivalent annual costs are the costs that vary every year but are expressed as annuity. This is…
Q: 1. What is the value of a 15-year 10% $1,000 coupon bond when the market interest rate is 15%?…
A: Solution:- Value of bond is the sum total of present value of cash inflows receivable from the bond.…
Q: BBB company has $54 million of current assets and $58 million of noncurrent assets. It forecasts an…
A: Answer a:- * Total assets = Current assets + non current assets = 54 + 58 = $112m * Debt ratio =…
Q: What court will be responsible to hear the case a lawsuit based on dispute of real estate an…
A: There is judiciary system for every type of issues faced by the common people. There is a particular…
Q: Find the compound interest earned if PhP 30,860 is deposited in a bank at 2.8% compounded monthly…
A: Future Value refers to the value of the current asset or investment or of cash flows at a specified…
Q: Mr. Sebastian avails the loan offered by his company with a minimal interest of 1.5% every 6 months.…
A: Here, To Find: Semi-annual payments of the loan =?
Q: templating the purchase of a new $545,000 computer-based order entry system. The system will be…
A: IRR is a rate where present value of cashinfows is equal to present value of cashoutflows.
Q: a wants to give her daughter Mara a financial gift on the latter's college graduation two years now.…
A: Solved using Financial Calculator PV = -2,000 FV = 5,000 N = 2 years * 4 quarters = 8 CPT I/Y =…
Q: Sue puts an ad in the paper as follows: $500 reward for the return of my cat." John finds the cat…
A: Here there is the case of Newspaper advertisement which is a general offer that is not bound by the…
Q: Paula Boothe, president of the Marigold Corporation, has mandated a minimum 10% return on investment…
A: Economic value added = Net operating profit after tax - (Invested capital×weighted average cost of…
Q: Use the average daily balance method to compute the finance charge on the credit card account for…
A: Finance charge is an additional amount which is charged on an amount financed through external…
Q: i. Advise the company on the best investment option for the maturing funds. ii. Based on your choice…
A: Future Value: It represents the future worth of the present amount of investment and is estimated…
Q: Assume that your rich aunt has given you $25,000 in a gift. You have come up with three ways to…
A: The potential gains that an individual, venture capitalist, or corporation disregards while choosing…
Q: Assume a 10-year Treasury bond has a coupon rate of 3.2% and par value of $1000, and yield to…
A: Yes, here the bond is selling at a premium.
Q: RCISES . The management of Sisa Fitness Center is planning to replace an old P30,000. The old…
A: Given: Particulars Year 0 Initial investment -50,000 Installation -10,000…
Q: At the end of each quarter, a life insurance client deposits Ph 6,176 for 5 years. If money is worth…
A: Quarterly deposit (P) = Ph 6,176 Interest rate = 5.3% Quarterly interest rate (r) = 5.3%/4 = 1.325%…
Q: Find the value (using Binomial Tree) of a European style call option on an underlying stock which is…
A: Stock price is RM 10 Exercise price is RM 10 Interest rate is 8% Probability of an up is 60%…
Q: Flo East has $25,000 to invest in a financial institution for a period of three years. Institution A…
A: Explanation : When we are calculating the Compounded Interest calculation Monthly Compounding…
Q: Compute: 1. The minimum required return by Cts Ltd's debtholders 2. The minimum required return by…
A: Minimum Required Return: It is the minimum return expected by the investor for investing in the…
Q: 8 years ago a company installed a robot that today has a market value of $60,000 and every year it…
A: Given, Value in market of the robot=$60,000 Decline in the value each year= $2,000. Value of MARR…
Q: Discount Factors 5.00% 6.00% 7.00% Period 1 0.95123 0.94176 0.93239 Period 2 0.90484 0.88692 0.86936…
A: The question is based on the concept of the binomial option pricing model, the model explains the…
Q: On December 31, 2017, Jackson Company had 100,000 shares of common stock outstanding and 24,000…
A: Answer- Part 1 - Computation of Basic Earnings per share- Income after 7% dividend on cumulative…
M8
Trending now
This is a popular solution!
Step by step
Solved in 3 steps
- What is the present value of 500 received at the beginning of each year for 15 years? (Assume the first payment is received today. Use a discount rate of 10℅, and round your answer to the nearest ten.) How do i solve this on a financial calculator?Suppose that you need an amount of money which equals to $10000000. It is possible to find it from bank A at an annual interest rate of 18% under 12 equal payment. If the first payment will be 1 month later the day you used the loan. Find the CF (Cash Flow), the equal payments and prepare the amortization table.Your friend has offered to lend you some money. You decide to borrow $1,800and agree to pay back $2,000 in 2 years. Alternatively, you could borrow $1,800for two years from your bank that is charging 4.5% per annum. Explain whichoption you should choose, showing computations.
- You have RM 5,000.00 you want to invest for the next 45 years until retirement. You are offered an investment plan that will pay you 6 percent per year for the next 15 years and 10 percent per year for the last 30 years.a) Explain the time value of money principleb) Identify the underlying assumption of the time value of money principlec) Draw a graph that illustrates the relationship between interest rates and the present value of RM 1,000.00 to be received in one year.d) Suggest how you can minimize the amount of cash you must invest in order to reach your retirement goal.e) Compute the amount you will have at the end of the 45 years.f) Calculate the amount you would have if the investment plan pays 10 percent for the first 15 years and 6 percent per year for the next 30 years.A borrower has secured a 30 year, $150,000 loan at 7% with monthly payments. Fifteen years later, an investor wants to purchase the loan from the lender. If market interest rates are 5%, what would the investor be willing to pay for the loan? (Correct Anwser: C) A:$75,000 B:$111,028 C:$118,478 D:$168,646 How to solve this problem? Give typing answer with explanation and conclusionIf you are planning to apply for a personal loan and borrow PhP 50,000 and repay the principal and Interest for an agreed length of time of 6 years that is compounded monthly. Calculate the following manually. a. How much Interest would you pay for 6 years for each bank offer? b. How much monthly payment is needed for each bank offer? c. Which is the best option for you among the given choices below if you are to pay monthly for 6 years? Justify your answer and apply what you have learned on simple and compound interest. Bank (Personal Loan) Monthly Interest Rate A B с D E 1.3% 1.89% 1.22% 1.5% 1.25%
- A borrower can obtain an 80% loan with an 8% interest rate and monthly payments. The loan is to be fully amortized over 25 years. Alternatively, he could obtain a 90% loan at an 8.5% rate with the same loan term. The borrower plans to own the property for the entire loan term. solve with finanical calucltor What is the incremental cost of borrowing the additional funds? How would your answer change if 2 points were charged on the 90% loan? Would your answer to part (b) change if the borrower planned to own the property for only 5 years?Your business requests a 3-month loan for $500,000. What will be the interest paid at the end of the term if the business risk percentage is assessed at 2.0% and LIBOR is at 2.1%?You lend a friend $10,000, which your friend will repay in 5 equal annual end-of-year payments of $3,000, with the first payment to be received 1 year from now. What rate of return does your loan receive? I need to be able to use excel and manually calculate as well.
- A man plans to take a vacation in 5 years. He wants to buy a certificate of deposit for $1300 that he will cash in for the trip. What is the minimum annual interest rate he must obtain on the certificate if he needs at least $1500 for the trip? Assume that the interest on the loan is computed using simple interest. The rate he must obtain isSuppose you wish to purchase heavy equipment machinery and a commercial bank will lend you $65,000 for the transaction. The loan will be amortized over 5 years and the nominal interest rate will be 8% payable monthly. Calculate the monthly payment and the annual percentage rate (EAR) of the loan to be amortized.Give typed solution only If you put $200,000 into your investment account now for 10 year at 5% annual interest, what is the difference in interest income between simple interest calculation and compound interest calculation?