It is estimated that the maintenance cost on a new car will be $350 the first year. Each subsequent year, this cost is expected to increase by $250. How much would you need to set aside when you bought a new car to pay all future maintenance costs if you planned to keep the vehicle for 15 years? Assume interest is 6% per year.

I purchased a house and intend to hold the property indefinitely. I plan to rent the house to generate rent income. The first year’s rent is $15,000, and will grow it at the rate of 10% for 3 years after that. After the initial 4 years, the growth rate in the rent will stabilize at 5%. The maintenance will cost $5,000 a year. The appropriate discount rate is 20%. a. What is the present value of rent income? b. What is the present value of the house? c. What is the present value of maintenance costs?

You are selling off some of your older business equipment and expect to receive $9,000.  You plan on investing it at 5% interest rate, compounded monthly, for 2 years.  What is the future value of the investment after 2 years?

A small business has determined that the machinery they currently use will wear out in 17 years. To replace the new machine when it wears out, the company wants to establish a savings account today. If the interest rate on the account is 1.1 percent per quarter and the cost of the machinery will be $255,000, how much will the company have to deposit today?

You have decided to buy a car this year at a price of $18,000. You're planning to take out a loan for the full price of the vehicle at an interest rate of .5% per month. For the first two years (24 months), you decide to repay $600 per month. How much will you have to pay each month for the remainder of the three-year loan (12 months remain) to exactly pay off the car in full at the end of the three-year term? Hint: Consider the monthly interest rate, the number of periods in months, and the monthly cash flows. $433 $500 $443 $600 O $419

a.  Renting a machine will need monthly payments of $6,000 for the next 5 years (i.e., at t = 1, 2, …, 60). However,if we choose to buy the machine today,which is (t = 0) will cost $320,000. Assume the machine's value is zero after 5 years. It is   possible to borrow and lend at a semi-annually compounded interest rate of 6% (APR). Would it be better to buy or to lease?  Explain.      b.We are currently at year 0. It is worthy to note that there is a perpetuity that pays $250 at the end of each odd year and $150 at  the end of each even year. The term structure is flat at 10% per year. Evaluate the present value of this perpetuity.     c.Assume the CAPM is valid.The return on asset ABC is perfectly correlated with the return on market portfolio. Your friend  makes the following statetment: a portfolio that had a dollar invested and  at the same time,shorting one dollar of the market portfolio will have no systematic risk. Comment on this and whether it is feasible.

You buy a car for $34,000.  You pay $10,000 down and finance the rest at 3% monthly over five years.  If the payment is rounded up to the nearest dollar, what is the final payment?

Suppose that a certain car has the following average operating and ownership costs. Average Costs per Mile Operating $0.24 a. If you drive 20,000 miles per year, what is total annual expense for this car? Ownership $0.68 Total $0.92 b. If the total annual expense for this car is deposited at the end of each year into an IRA paying 8.5% compounded yearly, how much will be saved at the end of nine nt - 1 years? Use the formula A = a. If you drive 20,000 miles per year, the total annual expense for this car is $ (Round to the nearest dollar as needed.)

Yang is considering buying an asset that, starting 5 years from now, will pay $10,000 per year forever. Assume that the required return is 7.25%.  What is the most Yang should pay for this asset?