Suppose a state lottery prive of $3 mition is to be paid in 20 peyments of si 50,000 each at the end of each of the next 20 years. If money is worth #%, compounded an, what is the prese ve of the prost (Round your answer to the nearest cent) 1 Need Help? P
Q: Gunnell Incorporated is considering two mutually exclusive 10-year investments. The initial cash…
A: Here, To Find: Net present value (NPV) =? Internal rate of return (IRR) =?
Q: Calculation of individual costs and WACC Dillon Labs has asked its financial manager to measure…
A: a). Debt Annual coupon payment on bond = Coupon rate*Par value = 0.06*$1000 = $60 Flotation cost =…
Q: STATEMENT BALANCE. Your credit card statement period CLOSES on the 1st of every month and a new…
A: Statement close date, billing date and payment due dates have been specified. We have to find the…
Q: What is the Modified duration of a portfolio with one 2-year 10% semi-annual coupon bond and three…
A: Solution:- Modified duration measures that if interest rate changes by one percent, how much the…
Q: 9. A risk averse, wealth maximising, investor is faced with a choice between four investments (P, Q,…
A: concept. Risk aversion is the tendency to avoid risk . Risk-averse investors prioritize the safety…
Q: On January 1, 2003 Mike took out a 30-year mortgage loan in the amount of 200,000 at an annual…
A: Given: Particulars Amount Loan amount $200,000 Interest rate 6% Year 30 Repaid…
Q: Consider that you are 35 years old and have just changed to a new job. You have $86,000 in the…
A: The Future Value of an Ordinary Annuity refers to the concept which gives out the compounded or…
Q: Sam is buying a used car. Payments will be $326.25 every month for 4 years, with the first payment…
A: Payment per month is $326.25 The time period is 4 years The interest rate is 5.150% Compounded…
Q: At a required return of 11 percent, should the firm accept this project? Mc raw Mill No O Yes What…
A: Solution: Net Present Value (NPV) means the net present value of cash inflows from the project after…
Q: question 3 Should the EC activities be spun off as a separate company?
A: Corporate actions are one-time occurrences that have an impact on a company's stock. A corporate…
Q: Max's Brakes is introducing a new revolutionary brake-pad for vehicles that will never wear out.…
A: Cash fixed expense per year is $1500 Depreciation expense is $600 The selling price is $100 The…
Q: The payback criterion has problem(s) like Select one: O A. It considers the time value of money O B.…
A: The payback period refers to the period that is consumed by a project for meeting all its initial…
Q: Your company is considering purchasing an expensive piece of equipment. The manufacturer of the…
A: The minimum present value can be found using the PV Function in excel. Present value helps…
Q: You are considering a position as the director of finance in a company listed on the Lusaka…
A: Financial contracts recognized as call options provide the option buyer the right, but not the duty,…
Q: Southampton Electronics manufactures a range of portable heaters. Most of the output is exported.…
A: The total units sold are 12,000 The selling price is 25 per unit The contribution margin ratio is…
Q: Beckham Company has the following information available: Selling price per unit: Variable cost per…
A: Expected operating income is calculated using following equation Operating income = N×S-VC-F Where,…
Q: 1) Please indicate whether the following statements are true or false. In case of a false statement,…
A: As per our guidelines we are supposed to answer only one question (if there are multiple questions…
Q: c) Suppose Taneal is considering combining the two portfolios into a single portfolio. If she…
A: Working Note #1 Expected Return of Portfolio A State of Market Probability Portfolio A…
Q: Year 0 1 2 3 Cash Flow -$ 18,500 10,800 9,700 6,200 a. What is the profitability index for the set…
A: Year Cash flow 0 $-18,500.00 1 $ 10,800.00 2 $ 9,700.00 3 $ 6,200.00 To Find:…
Q: An oil company has paid the Irish Govt. €15m for oil exploration rights. If oil is found, the oil…
A: The break even point is where there is no loss and no profit. If selling is above the break even…
Q: You bought a stock at $50 per share and it has increased to $74 and recently starting You are…
A: Stock markets are quite volatile and it is quite difficult that to predict the stock market and only…
Q: O'Brien Ltd.'s outstanding bonds have a $1,000 par value, and they mature in 25 years. Their…
A: Coupon interest rate The rate of return paid to the bondholder from the date of issue of the bond to…
Q: A project has the following cash flow with a discount rate of 12%: Annual cash flows: Year 0 $ Year…
A: The payback period is used to calculate the time the project takes to recover its initial…
Q: Poisson Calculators has found that it is indifferent between purchasing a high-capacity vacuum…
A: Data given: Sales =1900 units per month. High-capacity machine: Price of each calculator=$70 Cash…
Q: What is a FUTURES CONTRACT and what are its key components
A: Derivatives are those securities, the value of which depends on another security. There are few…
Q: A firm evaluates all of its projects by applying the IRR rule. A project under consideration has the…
A: Year Cash Flows 0 $ -28,700.00 1 $ 12,700.00 2 $ 15,700.00 3 $ 11,700.00 To Find:…
Q: Jack Corp. has a profit margin of 4.0 percent, total asset turnover of 2.1, and ROE of 16.42…
A: Return on equity = Profit margin * Total asset turnover ratio * Equity multiplier 16.42% = 4%*2.1*…
Q: Hedge Funds have become an increasingly popular investment options over the past 15 years, with…
A: Hedge funds refer to a partnership traded in the pooling of funds and employing various strategies…
Q: The Jones Company has just completed the third year of a five-year MACF recovery period for a piece…
A: MACRS is modified accelerated depreciation system in which there is more depreciation during the…
Q: Explain how cash flows are esrimated for captial budgeting. What are sunk costs and opportunity…
A: Capital budgeting is an important aspect of finance. It is the process through which a company…
Q: What are the main differences between the Capital Asset Pricing Model (CAPM) and the Arbitrage…
A: Portfolio management entails the planning, supervision, timing, rationalism, and conservatism…
Q: A company is trying to decide whether to undertake a marketing campaign before launching a new…
A:
Q: ADD-ON LOANS vs SIMPLE INTEREST LOANS. You are borrowing $500,000 on a 30 year, 5.5% interest loan…
A: Add on loans are loan where the monthly payments are calculated by dividing the total principal by…
Q: Suppose a seven-year, $1,000 bond with a 7.97% coupon rate and semiannual coupons is trading with a…
A: Given The Face value is $1000 Coupon rate is 7.97% Term of bond is 7 years
Q: Recently, More Money 4U offered an annuity that pays 5.1% compounded monthly. If $1,706 is deposited…
A: Monthly deposit (C) = $1,706 Monthly interest rate (r) = 0.00425 (i.e. 0.051 / 12) Monthly period…
Q: A person invests $2000 in an account at 10% interest compounded annually. When will the value of the…
A: The simple interest rate is different than the compounded rate of interest. The compounding interest…
Q: In the following problems, assume that the coupon rate is compounded semi-annually, and bonds are…
A: Different types of the bonds have been given. Characteristics have been mapped. We have to find the…
Q: Fill the parts in the above table that are shaded in yellow. You will notice that there are nine…
A: State of the Economy Probability T-Bills Philips Pay-up Rubber made Market Index Recession 0.2 7%…
Q: Adamson Corporation is considering four average-risk projects with the following costs and rates of…
A: The project that has an expected return greater than the WACC is expected to result in profits. The…
Q: Sam owns a yogurt drink van. She is buying yogurt from a supplier for £0.50 per bottle and sells for…
A: Contribution per unit = Selling price per unit - Variable cost per unit As insurance and salary…
Q: QUESTION 13 The Bruin's Den Outdoor Gear is considering a new 6-year project to produce a new tent…
A: NPV that is net present value is main capital budgeting technique used and is based on time value of…
Q: Not having a credit may result in having a hard time finding an apartment. False True 199 What's the…
A: Several multiple choice questions appear on the screen. We have to find the correct answer for each…
Q: Rowell Corporation, a small, diversified manufacturer of motorbike components, is trying to…
A: Concept. Net investment cost = Total initial investment + Increase in working capital - Total cash…
Q: nsider a stock worth K12.50 that can go up or down by 15% per period. Assume a period process of…
A: Call options gives opportunity to buy the stock on expiration period but there is no obligation to…
Q: • One Big Mag Burger: In KSA = 10 Riyal In USA = 4.3 $ Exchange rate: 1$ = 3.75R • Tell if the value…
A: In KSA = 10 Riyal. In USA = 4.3$ So, 1$ = 10/4.3 = 2.32558 R As per the scenario 1$ = 2.33 R But…
Q: Target Inc. has just paid a dividend of $4 per share and has announced that it will increase the…
A: The dividend Just paid is$4 The dividend will grow by $2 per year The time period is 4 years The…
Q: Suppose that put options on a stock with strike prices $18 and $20 cost $2 and $3.50, respectively.…
A: Bull spread is a strategy created by buying an European put option with lower strike price and…
Q: ii. iii. Calculate the equivalent level effective rate of return over the four year-period. If…
A: Year Balance Return 2016 5000.00 2017 5175.00 3.5% 2018 5394.94 4.25% 2019 5705.15…
Q: Compute the present value of a $6,000 deposit in year 3, and another $5,500 deposit at the end of…
A: Interest rate = 9% Cash flow in year 3 = $6,000 Cash flow in year 6 = $5,500 Present value = ?
Q: Limited has a target capital structure of 45% debt, 15% preferred stock and 40% common equity. The…
A: Bonds are kind of debt and is the long term sources of capital for company and cost of debt is very…
Step by step
Solved in 2 steps with 1 images
- Suppose a state lottery prize is to be paid in 25 payments of $360,000 each at the end of each of the next 25 years. (a) What is the total of all payments received (the advertised value of the lottery prize)? (b) Instead of receiving annual payments, the winner opts to receive a single payment today equal to the present value of the prize. Find the amount of today's payment if: (Round your answer to the nearest cent.) interest is 8% $ interest is 12% $Find the future value if $7000 is invested for 6 years at 11% compounded annually. (Round your answer to the nearest cent.) $ Need Help? DETAILS MY NOTES What is the future value if $8200 is invested for 15 years at 10% compounded semiannually? (Round your answer to the nearest cent.) Need Help? Read It ASK WA $1,000,000 lottery prize pays $50,000 per year for the next 20 years. If the current rate of return is 3.75%, what is the present value of this prize? (Assume the lottery pays out as an ordinary annuity. Round your answer to the nearest cent.)$
- Use a calculator to evaluate the amortization formula. For the values of the variables, P, r, and t (respectively). Assume n=12. (Round your answer to the nearest cent). $14,000; 5%; 6 years.A lottery winner will receive $1 million at the end of each of the next ten years. What is the future value (FV) of her winnings at the time of her final payment, given that the interest rate is 8.5% per year? A. $14.84 million B. $19.95 million C. $18.95 million D. $13.84 millionA lottery claims its grand prize is $15 million, payableover five years at $3,000,000 per year. If the firstpayment is made immediately, what is this grand prizereally worth? Use an interest rate of 7%
- If you invest $15,000 today, how much will you have in (for further instructions on future value in Excel, see Appendix C): A. 20 years at 22% B. 12 years at 10% C. 5 years at 14% D. 2 years at 7%How much would you invest today in order to receive $30,000 in each of the following (for further Instructions on present value In Excel, see Appendix C): A. 10 years at 9% B. 8 years at 12% C. 14 years at 15% D. 19 years at 18%A lottery claims its grand prize is $10 million, payable over 5 years at $2,000,000 per year. If the first payment is made immediately, what is the grand prize really worth? Use an interest rate of 4%. The real value of the grand prize is $enter your response here. (Round your response to the nearest dollar.)
- A lottery winner will receive $1 million at the end of each of the next twelve years. What is the future value (FV) of her winnings at the time of her final payment, given that the interest rate is 8.1% per year? A. $19.09 million B. $30.54 million C. $26.73 million D. $15.27 millionA lottery claims its grand prize is $10 million, payable over 5 years at $2,000,000 per year. If the first payment is made immediately, what is this grand prize really worth? Use an interest rate of 6%.Consider the following future value. (Round your answers to the nearest cent.) $3,739 at 11 7/8% compounded monthly for 17 years and 7 months (a) Find the present value that will generate the given future value.$ ____________(b) Interpret the present value. One would have to invest $ ___________ now to have the future value in the given time.