Question

1. Your company invests $500,000 in a Government Bond projected to earn 5% annually. Estimate the...

1. Your company invests $500,000 in a Government Bond projected to earn 5% annually. Estimate the value of your investment after 10 years.

b.You approach your local bank for a loan. The bank quotes a rate of 5.89% with an effective annual rate of 6%. Does the bank use annual, quarterly, or monthly compounding? c.Your company invested $5,500,000 in a project with expected cash flows of $1,000,000 at the end of Year 1, $1,500,000 at the end of Year 4, and $7,000,000 at the end of Year 5. Calculate the internal rate of return of the investment.

Math   Statistics-And-Probability   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Suppose the opportunity cost of capital is 5% and you have just won a $750,000 lottery...
Suppose the opportunity cost of capital is 5% and you have just won a $750,000 lottery that entitles you to $75,000 at the end of each year for the next 10 years. What is the minimum lump sum cash payment you would be willing to take now in lieu of the IO-year annuity? What is the minimum lump sum you would be willing to accept at the end of the 10 years in lieu of the annuity? Using the appropriate...
1) You purchased a machine for $500,000 (installed), and you depreciated it using a 5 year...
1) You purchased a machine for $500,000 (installed), and you depreciated it using a 5 year MACRS. This machine generates $200,000 in annual revenue. In year 4, you sold the machine for $250,000. You received a loan for $400,000 on a 5 year loan at 5% (note, you must pay the remaining balance of this loan at the end of year 4 from the proceeds of the sale). In addition, you invested $80,000 in working capital initially. Your company is...
A) A client just deposited ¢7,000,000 in one of your investment funds which is currently earning...
A) A client just deposited ¢7,000,000 in one of your investment funds which is currently earning 10% return. The bank has advised the client to deposit an additional ¢4,000,000 at the end of each of the next three years. The client would like to know how much the total amount in this investment will be in three years’ time. Kassim has just been offered a job at ¢600,000 a year. He anticipates his salary will increase by 6% annually until...
You are considering an investment in a mutual fund with a 5% load and an expense...
You are considering an investment in a mutual fund with a 5% load and an expense ratio of 0.85%. You can invest instead in a bank CD paying 7% interest. a. If you plan to invest for two years, what annual rate of return must the fund portfolio earn for you to be better off in the fund than in the CD? Assume annual compounding of returns. (Do not round intermediate calculations. Round your answer to 2 decimal places.) annual...
5-1 FUTURE VALUE If you deposit $10,000 in a bank account that pays 10% interest annually,...
5-1 FUTURE VALUE If you deposit $10,000 in a bank account that pays 10% interest annually, how much will be in your account after 5 years? 5-2 PRESENT VALUE What is the present value of a security that will pay $5,000 in 20 years if securities of equal risk pay 7% annually? 5-3 FINDING THE REQUIRED INTEREST RATE Your parents will retire in 18 years. They currently have $250,000, and they think they will need $1,000,000 at retirement. What annual...
Assume that 5 years from now you will need RM2000. Your bank compounds interest at a...
Assume that 5 years from now you will need RM2000. Your bank compounds interest at a 6% annual rate. b. If you want to make equal payments at the end of Years 1 through 5 to accumulate the RM2,000, how large must each of the 5 payments be? c. If your father were to offer either to make the payments calculated in part (b) or to give you a lump sum of RM1,050 one year from now, which would you...
In your answers, you should properly show your work by writing down your entries into the...
In your answers, you should properly show your work by writing down your entries into the calculator. For instance, if you use the TVM worksheet of your financial calculator to compute how long it takes to double your account balance given 5% annual interest rate, you should write down your entries as: I/Y=5, PV=-1, PMT=0, FV=2, CPT N=? --- the question mark here stands for your answer to the question. Question 6 – PV, Ordinary Annuity, Compounding [2 points]: Find...
1) Your company is planning to borrow $1,000,000 on a 3-year, 8%, fully amortized, term loan....
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...
5) Solve the problem. A bank gives you two options to choose from for your investments:...
5) Solve the problem. A bank gives you two options to choose from for your investments: Option A: 6% annual interest rate compounded yearly; and Option B: 5.9% annual interest rate compounded quarterly. Which of the two options is the better investment at the end of the 2 years. 6) Assuming the general level of inflation in Ghana is 15% per year; find the number of years it will take for prices to double. The currency of Ghana is called...
You are considering an investment in a mutual fund with a 5% load and expense ration...
You are considering an investment in a mutual fund with a 5% load and expense ration of 0.5%. You can invest in a bank CD paying 3% interest. A. If you plan to invest for 4 years, what annual rate of return must the fund portfolio earn fot you to be better offin the fund than in the CD? Assume annual compounding of returns.(Do not round intermediate calculations. Round your answer to 2 decimal places.) Annual rate of return__________% B....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT