QUESTION 1. You invest $3,000 a yearfor three years at 12 percent.a. What is the value of yourinvestment after one year? Multiply $3,000 X 1.12b. What is the value of yourinvestment after two years? Mu Solution has been given alongwith the questionitself.====================================1. You invest $3,000 a year for three years at 12percent a. What is […]
QUESTION I have an answer,I just need to make sure its correct.The Clearinghouse Sweepstakes has just informed you that you have won $1 million. The amount is to be paid out at the rate of $20,000 a year for the next 50 years. With a discount rate of 10%, what is the present value of […]
QUESTION A large, land grant university, currently facing severeparking problems on its campus is considering constructing parkingdecks off campus. A shuttle service could pick up studnets atthe off-campus parking deck, and quickly transport them to variouslocations on campus. The university woul Annual Fied cost will be Driver 40,000 Maint 7,000 Insu 2,000 Depn 12,500 = […]
QUESTION Brown Fashions December 31,2008 balance sheet showed total common equity of $4,050,000 and 295,000 shares of stock outstanding. During 2008, the firm had $450,000 of net income, and it paid out $1000,000 as dividends. What was the book value per share at 12/31/08, assuming no common stock was either Stockholders Equity Paid-in Capital: Common […]
QUESTION Tico Co. has a target capital structure of 20% preferred stock, 40% common, and 40% debt. It cost of equity is 12%, the cost of preferred stock is 6% and cost of debt if 5%. The relevant tax rate is 34%. What is Ticos weighted average cost of capital? According to the given data, […]
QUESTION You have considered expanding your line of equipment and apparel for high school athletic teams to include soccer teams and gathered information on the increase in sales for your division and the investment needed in new manufacturing equipment without having to hire additional manufacturing personn 1) The cost of capital represents the funds that […]
QUESTION NPV for project AB is 1413.29 NPV for project STis 1312.20 the required return is %10What is the IRR for each of these projects? If you apply the IRRdecision rule, which project should the company accept? Isthe decision necessarily correct? Answer: IRR for each of these projects: IRR of both the projects can not […]
QUESTION A 15-year annuity of 30 semiannual payments of $11,000 each will begin 9 years from now, with the first payment coming 9.5 years from now. If the discount rate is 7 percent compounded monthly, what is the value of this annuity 6 years from now? What is the current value of the annuity? Semi […]
QUESTION Your father is 50years old now and his plan is to retire exactly at the age of 60.His goal is to create a fund that will allow him to receiveRs15,00,000 at the time of retirement so that he can start a smallbusiness. He has searched the market and is confused between thetwo options:Option 1: […]
QUESTION You want to have $44,000 in your savings account 10 years from now, and youre prepared to make equal annual deposits into the account at the end of each year. If the account pays 5.1 percent interest, you must deposit $ _________ each year Calculating Monthly Deposit Amount(PMT): (Using Ms-Excel “PMT”Function): Interest Rate (Rate) […]
