Person X is consider as nearing graduation and he is trying to get a jo in the local bank. For the purpose of this he has been take an examination including several techniques of financial analysis. The initial section of the test address is considering as analysis of discounted cash flow. To draw: A time line for $100 cash flow at the end 2 nd year.

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Answer 1

Question

Chapter 4, Problem 1MC

a)

Summary Introduction

Case summary:

Person X is consider as nearing graduation and he is trying to get a jo in the local bank. For the purpose of this he has been take an examination including several techniques of financial analysis. The initial section of the test address is considering as analysis of discounted cash flow.

To draw: A time line for $100 cash flow at the end 2^nd year.

b)

Summary Introduction

To draw: A time line for ordinary annuity of $100 per year for 3 years.

c)

Summary Introduction

To draw: A time line for ordinary annuity of $100 per year for 3 years.

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For each of the following situations involving annuities, solve for the unknown Assume that interest is compounded annually and that all annuity amounts are received at the end of each period. (=interest rate, and n number of years) Note: Use tables, Excel, or a financial calculator. Round your final answers to nearest whole dollar amount. (FV of $1. PV of $1. EVA of $1. PVA of $1, EVAD of $1 and PVAD of $1) 1 2 3. 4. 5 Present Value 368,041 714,457 600,000 200,000 Annuity Amount $ 4,000 105,000 110.000 96,048 8% 10% 10% n= 5 4 9 4

For each of the following situations involving annuities, solve for the unknown. Assume that interest is compounded annually and that all annuity amounts are received at the end of each period. (/= interest rate, and n= number of years) Note: Use tables, Excel, or a financial calculator. Round your final answers to nearest whole dollar amount. (FV of $1. PV of $1. FVA of $1. PVA of $1. EVAD of $1 and PVAD of $1) 1. $ 2 3 4. 15 Present Value Answer is complete but not entirely correct. Annuity Amount 2.200 145,000 190,000 72.523 45,787 8,784 558,865 480,945 520,000 240,000 8% 1.0% 9% 2.5% 10% n= 5 4 30 8 4

Assume that you are looking at three perpetuities. Perpetuity 1 (P₁) has annual cash flows of $850 in Years 1 through infinity (1-x) and a present value at Year 0 of $10.119.047619. Perpetuity 2 (P₂) has annual cash flows of $620 in Years 11 through infinity (11 - oo) and the same effective rate as Perpetuity 1. Perpetuity 3 (P3) has annual cash flows of $780 in Years 25 though infinity (25 - 0) and the same effective rate as Perpetuities 1 and 2. Given this information, determine the value of all three perpetuities when evaluated at Year 35. $239.599.69 O $248,272.58 $245,381.62 O$242,490.65 O $254,054.51

Answer 2

Question

Chapter 4, Problem 1MC

a)

Summary Introduction

Case summary:

Person X is consider as nearing graduation and he is trying to get a jo in the local bank. For the purpose of this he has been take an examination including several techniques of financial analysis. The initial section of the test address is considering as analysis of discounted cash flow.

To draw: A time line for $100 cash flow at the end 2^nd year.

b)

Summary Introduction

To draw: A time line for ordinary annuity of $100 per year for 3 years.

c)

Summary Introduction

To draw: A time line for ordinary annuity of $100 per year for 3 years.

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Answer 3

Question

Chapter 4, Problem 1MC

a)

Summary Introduction

Case summary:

Person X is consider as nearing graduation and he is trying to get a jo in the local bank. For the purpose of this he has been take an examination including several techniques of financial analysis. The initial section of the test address is considering as analysis of discounted cash flow.

To draw: A time line for $100 cash flow at the end 2^nd year.

b)

Summary Introduction

To draw: A time line for ordinary annuity of $100 per year for 3 years.

c)

Summary Introduction

To draw: A time line for ordinary annuity of $100 per year for 3 years.

Expert Solution & Answer

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Answer 4

Question

Chapter 4, Problem 1MC

a)

Summary Introduction

Case summary:

Person X is consider as nearing graduation and he is trying to get a jo in the local bank. For the purpose of this he has been take an examination including several techniques of financial analysis. The initial section of the test address is considering as analysis of discounted cash flow.

To draw: A time line for $100 cash flow at the end 2^nd year.

b)

Summary Introduction

To draw: A time line for ordinary annuity of $100 per year for 3 years.

c)

Summary Introduction

To draw: A time line for ordinary annuity of $100 per year for 3 years.

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Answer 5

Chapter 4, Problem 1MC

a)

Summary Introduction

Case summary:

Person X is consider as nearing graduation and he is trying to get a jo in the local bank. For the purpose of this he has been take an examination including several techniques of financial analysis. The initial section of the test address is considering as analysis of discounted cash flow.

To draw: A time line for $100 cash flow at the end 2^nd year.

b)

Summary Introduction

To draw: A time line for ordinary annuity of $100 per year for 3 years.

c)

Summary Introduction

To draw: A time line for ordinary annuity of $100 per year for 3 years.

Answer 6

Chapter 4, Problem 1MC

a)

Summary Introduction

Case summary:

Person X is consider as nearing graduation and he is trying to get a jo in the local bank. For the purpose of this he has been take an examination including several techniques of financial analysis. The initial section of the test address is considering as analysis of discounted cash flow.

To draw: A time line for $100 cash flow at the end 2^nd year.

Answer 7

Chapter 4, Problem 1MC

a)

Summary Introduction

Case summary:

Person X is consider as nearing graduation and he is trying to get a jo in the local bank. For the purpose of this he has been take an examination including several techniques of financial analysis. The initial section of the test address is considering as analysis of discounted cash flow.

To draw: A time line for $100 cash flow at the end 2^nd year.

Answer 8

b)

Summary Introduction

To draw: A time line for ordinary annuity of $100 per year for 3 years.

Answer 9

b)

Summary Introduction

To draw: A time line for ordinary annuity of $100 per year for 3 years.

Answer 10

c)

Summary Introduction

To draw: A time line for ordinary annuity of $100 per year for 3 years.

Answer 11

c)

Summary Introduction

To draw: A time line for ordinary annuity of $100 per year for 3 years.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 4 - Prob. 2Q Ch. 4 - An annuity is defined as a series of payments of a...Ch. 4 - If a firm’s earnings per share grew from $1 to $2...Ch. 4 - Prob. 5Q Ch. 4 - If you deposit 10,000 in a bank account that pays...Ch. 4 - What is the present value of a security that will...Ch. 4 - Your parents will retire in 18 years. They...Ch. 4 - Prob. 4P Ch. 4 - You have $42,180.53 in a brokerage account, and...Ch. 4 - What is the future value of a 7%, 5-year ordinary...

Solution Summary: The author explains that Person X is nearing graduation and trying to get a jo in the local bank. The initial section of the test address is considering as analysis of discounted cash flow.

To draw: A time line for ordinary annuity of $100 per year for 3 years.

To draw: A time line for ordinary annuity of $100 per year for 3 years.

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Chapter 4 Solutions