Details of this Paper

The chief financial officer of a home health agency needs to determine the present

Description

solution


Question

text.;The chief financial officer of a home health agency needs to determine the present value of a $120,000 investment received at the end of year 20. What is the present value if the discount rate is;4 percent?;6 percent?;8 percent?;10 percent?;Erie General Hospital wants to purchase a new blood analyzing device today. Its local bank is willing to lend it the money to buy the analyzer at a 2 percent monthly rate. The loan payments will start at the end of the month and will be $2,600 per month for the next eighteen months. What is the purchase price of the device?;Upon the untimely and tragic death of their wealthy uncle, his heirs wanted to memorialize him with a named donation to the local hospital. They offered the hospital a choice of $60,000 annual payments forever or a lump sum payment of $700,000 today;What should be the decision if the hospital thinks it could earn an average of 5 percent annually on this donation?;What should be the decision if the hospital thinks it could earn an average of 9 percent annually on this donation?;What should be the decision if the hospital thinks it could earn an average of 13 percent annually on this donation?;Darby Hospital is borrowing $81 million for its medical office building. The annual interest rate is 4 percent. What will be the equal annual payments on the loan if the length of the loan is four years and payments occur at the end of each year?;A wealthy philanthropist has established the following endowment for a hospital. The details of the endowment include the following;A cash deposit of $19 million one year from now.;An annual cash deposit of $14 million per year for the next fifteen years. The first $14 million deposit will be made today.;At the end of year 15, the hospital will also receive a lump sum payment of $26 million.;Assuming the cost of money is 4 percent, what is the value of this endowment in today?s dollars?;Holy Spirit Hospital is reviewing the details of several bank loans. Bank A offers a nominal rate of 6 percent compounded semiannually. Bank B offers a nominal rate of 6 percent compounded quarterly. Bank C offers a nominal rate of 6 percent compounded monthly. What is the effective rate of each loan, and which loan should the hospital accept?

 

Paper#27827 | Written in 18-Jul-2015

Price : $27
SiteLock