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Fin quiz 4

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Question;Question 1;Assume interest rate of 4%. Suppose that;you receive $88,474 at the end of each year for 4 years. Suppose that this cash;flow starts at the end of the fourth year. Compute the present value.;Do not enter the symbol $ in your answer.;Simply enter the answer rounded off to two decimal points.;Question 2;How many years it will take you to double;your money if you can earn 13% each year, given that compounding is quarterly?;Note: Do not write "years" in your answer.;Question 3;The ABC Company is considering a new;project which will require an initial cash investment of $10,415. The projected;cash flows for years 1 through 4 are $8,529, $6,611, $9,366, and $4,876;respectively. If the appropriate discount rate is 10%, compute the NPV of the;project.;Enter your answer rounded off to two;decimal points. Do not enter $ in the answer.;Question 4;Say, you deposit $3,302 in a bank for 17;years. What is the amount you will have in the bank at the end of 17 years if;interest of 5 % for first 7 years and interest of 7 % for the remaining years?;Note: Do not put $ sign in your answer.;Question 5;If the effective rate is 12%. What is the;nominal rate if compounding is daily. Do not enter the symbol % in your;answer. Simply enter the answer in percentages rounded off to two decimal;points.;Question 6;Assume interest rate of 9%. A company;receives cash flows of $928 at the end of year 5, $226 at the end of year 7;and $592 at the end of year 10. Compute the future value of this cash flow;stream.;Do not enter the symbol $ in your answer.;Simply enter the answer rounded off to two decimal points.;Question 7;Today, you are purchasing a $3,483 5-year;car loan at 12 percent. You will pay annually at the end of each year. What is;the amount of each payment?;Question 8;In order to buy a house, you take a loan of;100,000 at 7.5% for a period of 13 years. Compute the balance remaining at the;end of 5 years.;Do not enter the symbol $ in your answer.;Enter your answer as a positive number. Simply enter the answer rounded off to;two decimal points.;Question 9;If you put $700 in a savings account with a;10% nominal rate of interest compounded monthly, what will the investment be;worth in 21 months (round to the nearest dollar)?;a.;$827;b.;$833;c.;$828;d.;$1,176;e.;$770;Question 10;What is the future value of quarterly;payments of $504 for 7 years at 6 percent?;Question 11;The Perpetual Life Insurance Co is trying;to sell you an investment policy that will pay you and your heirs $13,124 per;year forever. Suppose the Perpetual Life Insurance Co. told you the policy;costs $192,923. At what interest rate would this be a fair deal? Just enter the;number in percentages up to 2 decimal points. Do not enter % in the answer box.;Question 12;Barrett Pharmaceuticals is considering a;drug project that costs $180,372 today and is expected to generate end-of-year;annual cash flows of $11,811, forever. At what discount rate would Barrett be;indifferent between accepting and rejecting the project?;Just enter the number in percentages;up to 2 decimal points. Do not enter % in the answer box.;Question 13;How many months it will take to grow your;money from $4,269 to $7,242 if you can earn an interest of 9% compounded;monthly? Note: Do not write "months" in your answer. Simply write the;number in the answer box.;Question 14;What should you be willing to pay in order;to receive $710 annually forever, if you require 6% per year on the investment?;Just enter the number up to 2 decimal;points. Do not enter $ in the answer box.;Question 15;Consider a 10-year loan with monthly;payments at 10%. If the loan amount is $250,000, compute the Interest paid;during the 6th year.;Enter your answer rounded off to two;decimal points. Do not enter $ in the answer box.;Question 16;How many years it will take to grow your;money from $4,133 to $9,600 if you can earn an interest of 12% compounded;quarterly? Note: Do not write "years" in your answer. Simply write;the number in the answer box.;Question 17;Kelly starting setting aside funds 9 years;ago to buy some new equipment for her firm. She has saved $7,579 each quarter;and earned an average rate of return of 5 percent. How much money does she;currently have saved for this purpose?;Question 18;How many years it will take you to;quadruple (means 4 times) your money if you can earn 10.46% each year? Note: Do;not write "years" in your answer. Simply write the number in the;answer box.;Question 19;What is the future value of $3,317 invested;for 14 years at 14% if interest is compounded quarterly? Note:Do not put $ sign;in your answer. Simply write the number in the answer box.;Question 20;If you can double your money in 18 years;what is the implied annual rate of interest, given that compounded in;quarterly? Note: give your answer in percentages. Note: Do not put % sign in;your answer. Simply write the number in percentages in the answer box.;Question 21;How much do you need to invest today in;order to have $5,486 at the end of 11 years if you are sure to earn an interest;at the rate of 11%? Note: Do not put $ sign in your answer. Simply write the;number in the answer box.;Question 22;How many years it will take to grow your;money from $3,194 to $7,778 if you can earn an interest of 16% compounded;monthly? Note: Do not write "years" in your answer. Simply write the;number in the answer box.;Question 23;If you receive $274 at the end of each year;for the first three years and $956 at the end of each year for the next three;years. What is the present value? Assume interest rate is 7%.;Hint: This is an uneven cash flow problem.;Use the CF function and solve for NPV to get the answer.;Just enter the number up to 2 decimal;points. Do not enter $ in the answer box.;Question 24;Assume interest rate of 7%. A company;receives cash flows of $116,553 at the end of years 4, 5, 6, 7, and 8, and cash;flows of $296,739 at the end of year 10. Compute the future value of this cash;flow stream.;Do not enter the symbol $ in your answer.;Simply enter the answer rounded off to two decimal points.;Question 25;How much do you need to invest today in;order to have $7,314 at the end of 9 years if you are sure to earn an interest;at the rate of 11%, if interest is compounded quarterly? Note: Do not put $;sign in your answer. Simply write the number in the answer box.;Question 26;What is the effective rate of 10%;compounded monthly?;Do not enter the symbol % in your answer.;Simply enter the answer in percentages rounded off to two decimal points.;Question 27;If you can triple your money in 28 years;what is the implied rate of interest? Note: Do not put % sign in your answer.;Simply write the number in percentages in the answer box..;Question 28;What is the future value of $114 invested;for 6 years at 16% if interest is compounded semi-annually? Note: Do not put $;sign in your answer. Simply write the number in the answer box.;Question 29;The ABC Company is considering a new;project which will require an initial cash investment of $5,846. The project;will produce no cash flows for the first 5 years. The projected cash flows for;years 6 through 9 are $4,628, $5,400, $6,495, and $3,450, respectively. If the;appropriate discount rate is 9%, compute the NPV of the project.;Enter your answer rounded off to two;decimal points. Do not enter $ in the answer box.;Question 30;What is the future value of $2,466 for 9;years at 4 percent if interest is compounded semi-annually? Note: Do not enter;$" in your answer. Simply write down the number that you get as your;answer.;Question 31;Gertrude Carter and Co. has an outstanding;loan that calls for equal annual payments of $14,903 over the 10-year life of;the loan. The original loan amount was $100,000 at an APR of 8 percent. How;much of the third payment is interest?;Do not enter the symbol $ in your answer.;Simply enter the answer rounded off to two decimal points.;Question 32;What is the future value of $3,097 invested;for 22 years at 15% if interest is compounded semi-annually (twice a year)?;Note: Do not put $ sign in your answer. Simply write the number in the answer;box.;Question 33;Say, you deposit $2,056 in a bank for 19;years. What is the amount you will have in the bank at the end of 19 years if;interest of 6 % compounded monthly for first 7 years and interest of 7 %;compounded quarterly for the remaining years? Note: Do not put $ sign in your answer.;Simply write the number in the answer box.;Question 34;How much do you need to invest today in;order to have $9,946 at the end of 19 years if you are sure to earn an interest;at the rate of 7%, if interest is compounded monthly? Note: Do not put $ sign;in your answer. Simply write the number in the answer box.;Question 35;What is the future value of annual payments;of $2,947 for 15 years at 6 percent?;Question 36;If you can double your money in 17 years;what is the implied annual rate of interest, given that compounded;semi-annually? Note: give your answer in percentages. Note: Do not put % sign;in your answer. Simply write the number in percentages in the answer box.

 

Paper#50618 | Written in 18-Jul-2015

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