Your storage firm has been offered $95,700 in one year to store some goods for one year. Assume your costs are $95,200, payable immediately, and the cost of capital is 8.2%. Should you take the contract? The NPV will be S (Round to the nearest cent.) Should you take the contract? (Select from the drop-down menu.) The contract be taken.

Your storage firm has been offered $95,700 in one year to store some goods for one year. Assume your costs are $95,200, payable immediately, and the cost of capital is 8.2%. Should you take the contract? The NPV will be S (Round to the nearest cent.) Should you take the contract? (Select from the drop-down menu.) The contract be taken.

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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You need a particular piece of equipment for your production process. An equipment - leasing company has offered to lease the equipment to you for $ 9 comma 500 per year if you sign a guaranteed 5-year lease (the lease is paid at the end of each year). The company would also maintain the equipment for you as part of the lease. Alternatively, you could buy and maintain the equipment yourself. The cash flows from doing so are listed below (the equipment has an economic life of 5 years). If your discount rate is 6.7%. what should you do? Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 negative $ 40 comma 800 negative $ 2 comma 200 negative $ 2 comma 200 negative $ 2 comma 200 negative $ 2 comma 200 negative $ 2 comma 200 Question content area bottom Part 1 The net present value of the leasing alternative is $ enter your response here. (Round to the nearest dollar.)
Suppose you can buy a new Toyota corolla for $20000 and sell it for $12000 in third year. For simplication, assume you sell the car at the beginning of the third year but can keep driving it until the end of the third year. Alternatively you can lease the car for $300 per month for three years and return it at the end of the three years. For simplication, assume that lease payments are made yearly instead of monthly- i.e,, that they are $3600 per year and are made at the beginning of each of the three years. a. If the interest rate R is 4%, it is better to buy or lease? b. If the interest rate is 10%,it is better to buy or lease? c. At what interest rate would you be indifferent between buying and leasing the car in percent?
You have two job offers with the following 6-year compensation terms: the first one offers you $80,000 a year for 6 years; the other one offers you a signing bonus of $15,000 plus $50,000 a year for the first 4 years and then 60,000 a year for the last two years. Assume that the appropriate discount rate is 12% and there are no taxes. a. How much would you lose in present value if you accepted the second offer? b. Propose a change to the second offer that would make you indifferent between the two offers.
4. You want to buy a house that costs $620,000. You can put $55,000 down. You get a 30 year fixed-rate loan with an APR of 4.5% compounded monthly. Mor Determine the monthly payment. Show clear work. Work: Work: Answer: Find the total closing costs if they consist of a fee of $1600 and 3 points. Answer: www Suppose that you invest $4800 in an account with an APR of 6.9%, compounded continuously. Determine how much you will have after 3 years. Assume that no additional deposits are made.
You have been offered a contract to work as a consultant. The company will pay you $6488 per month. In addition, once you complete the work in 4 years, you will receive $36460. Your required return is 5.58%, what is this contract worth today? Answer:
A car dealer wants to offer you a 60 month lease on a $28,300 car. You can afford a $ 500 monthly payment and the dealer wants to earn a 9.4% APR. There is no down payment on the lease and monthly payments are due at the end of each month. What is the lowest estimated residual value for the car in order that the dealer earn's the their required annual percentage rate (APR). Round your final answers to the nearest dollar. A
Please answer fast i give you upvote.
You have just been offered an opportunity to buy a working daily farm in lowa .The seller shows you financial statements that suggest the investment will provide a cash flow of $80,000 per year .If you assume the farm can operate indefinitely, and you require a 12.8% return on the investment, what is the most you would be willing to pay for the farm.
The NPV is? Round to nearest dollar
You have been given a choice of paying $20,000 for a new GM car with a $3,000 cash rebate (net cost of $17,000 which you finance separately), or zero percent financing for 48 months with no cash rebate. What is the implicit rate of interest in this deal?
Suppose that, at age 30, you might wish to leave your job and pursue a master’s degree. If you choose to remain at your job, your employer would pay you $74k per year until retirement, at age 55. If you go back to the university, you would have to sacrifice 2 years of income, but once you graduate, you would receive $117k per year until you retire at age 55. The master’s program you are interested in costs $22k per year. Note: The term “k” is used to represent thousands (× $1,000). Required: At an opportunity cost of 8%, determine the percentage difference between your most and least profitable alternatives, with the least profitable option as the basis for your calculation.Answer% Intermediate calculations must be rounded to 3 decimal places (at least). Input your answer as a percent rounded to 2 decimal places (for example: 28.31%).
You have been offered a contract from Comp Co. You will receive $120,000 up front from Comp Co. In exchange, you will provide $50,000 in services each year for 3 years. Your cost of capital is 10%. Find the NPV and IRR of the deal. Should you accept the contract? Explain.

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