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FIN - 6 Discounted Cash Flow Valuation problems




Question;Please show me how to solve these 6 Discounted Cash Flow Valuation problems, using theBAII Plus Professional calculator, if possible. If not, please show me the math work Thanks!34. P6-37 Growing Annuity [LO1]You have just won the lottery and will receive $1,000,000 in one year. You will receive payments for 30years, which will increase 5 percent per year. The appropriate discount rate is 8 percent.Required:What is the present value of your winnings?$99,377$19,396,894$44,275,729$18,255,900$19,016,56328. P6-43 Present and Future Values [LO1]The present value of the following cash flow stream is $6,550 when discounted at 10 percent annually.Year1234Cash Flow$1,700?2,1002,800Required:What is the value of the missing cash flow?$1,795.71$1,869.01$-50.00$1,832.36$1,514.3533. P6-35 Calculating Rates of Return [LO2]Suppose an investment offers to triple your money in 12 months (don't believe it).Required:What rate of return per quarter are you being offered?23.01%44.22%31.61%32.24%30.98%.P6-57 Calculating Annuity Values [LO1]Bilbo Baggins wants to save money to meet three objectives. First, he would like to be able to retire 30years from now with retirement income of $20,000 per month for 25 years, with the first paymentreceived 30 years and 1 month from now. Second, he would like to purchase a cabin in Rivendell in 10years at an estimated cost of $380,000. Third, after he passes on at the end of the 25 years ofwithdrawals, he would like to leave an inheritance of $900,000 to his nephew Frodo. He can afford tosave $2,500 per month for the next 10 years.Required:If he can earn an 10 percent EAR before he retires and an 7 percent EAR after he retires, how much willhe have to save each month in years 11 through 30?$3,099.75$3,127.44$2,246.34$2,711.89$2,304.8431. P6-47 Present Value and Multiple Cash Flows [LO1]What is the present value of $4,000 per year, at a discount rate of 10 percent, if the first payment isreceived 8 years from now and the last payment is received 25 years from now?$16,465.30$6,348.09$9,955.13$16,834.48$15,304.0820.6-53 Calculating Annuities Due [LO1]Suppose you are going to receive $10,000 per year for five years. The appropriate interest rate is 11percent.Requirement 1:(a) What is the present value of the payments if they are in the form of an ordinary annuity?Answer choices: 41,024.4662,278.0136,958.9758,892.3242,702.84(b) What is the present value if the payments are an annuity due?Answer choices: 36,958.97 62,278.01 45,051.50 41,024.4665,370.48Requirement 2:(a) Suppose you plan to invest the payments for five years, what is the future value if the payments arean ordinary annuity?Answer choices: 69,128.60 167,220.10 62,278.01 55,880.91 128,753.50(b) Suppose you plan to invest the payments for five years, what is the future value if the payments arean annuity due?Answer choices: 135,835.00 185,614.30 69,128.60 58,880.51 62,278.01


Paper#48136 | Written in 18-Jul-2015

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