Question

- Your child is about to enter college a year from now. A local
foundation provides scholarships (essentially interest-free loans)
each year perpetually for students. Your child has won the
scholarship just now. When your child joins college, he/she would
receive a scholarship of $ 10,000 per year annually for 4 years.
Your child is expected to repay the scholarship amount of $ 40,000
in 15 equal yearly installments, interest-free beginning a year
after the expiration of his/her scholarship. The foundation seems
to be giving an interest free loan. The market interest rate is 8%
and would not change in the future.
- What is the PV of the scholarship?
- If the foundation invests a lump sum today to fund all future scholarships. What must be that investment today?

Answer #1

2. Your child is about to enter college a year from now. A local
foundation provides scholarships (essentially interest-free loans)
each year perpetually for students. Your child has won the
scholarship just now. When your child joins college, he/she would
receive a scholarship of $ 10,000 per year annually for 4 years.
Your child is expected to repay the scholarship amount of $ 40,000
in 15 equal yearly installments, interest-free beginning a year
after the expiration of his/her scholarship. The...

1) Your company is planning to borrow $1,000,000 on a 3-year,
8%, fully amortized, term loan. Payments for this loan are made at
the end of each year, in equal installments.
a. What is the amount of each annual payment?
b. What will be the amount of the principal paid in the second
yearly installment?
c. What will be the amount of interest paid in the third yearly
installment?
2) A stock is not expected to pay a dividend over...

Please read the article and answear about
questions.
Determining the Value of the Business
After you have completed a thorough and exacting investigation,
you need to analyze all the infor- mation you have gathered. This
is the time to consult with your business, financial, and legal
advis- ers to arrive at an estimate of the value of the business.
Outside advisers are impartial and are more likely to see the bad
things about the business than are you. You should...

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