User Account

All Pages

Calculate the present value for the following annuity

Assignment Help Financial Management
Reference no: EM131021329

Question 1

The initial investment is $30,000. Annual interest rate is 4.75%. Maturity: 16 years. Using the equation/calculator method, determine the "future value" for each of the following scenarios. You may round to the nearest dollar.

A. Annual compounding

B. Quarterly compounding

C. Monthly compounding

D. Continuous compounding

Be sure to show all equations.

Question 2

Same inputs as Question 1, but use Excel. Attach a hard copy of the Excel spreadsheet. Be sure this spreadsheet print out the actual formulas and answers. Answers should be rounded to nearest penny.

Question 3

You will receive $1,000,000 lump-sum, 25 years later. The discount rate is 3.25%. Using the equation/calculator method, determine the "present value." Show the equation.

Question 4

Interpret your result from Question 3.

Question 5

Calculate the "present value" for the following annuity: $40,000/year, 25 years, discount rate 5.5%. Use equation/calculator method.

Question 6

Same inputs as Questions 3 & 5, solve by Excel. Attach hard copy of Excel spreadsheet showing actual formulas and answers. Round answers to nearest penny.

Reference no: EM131021329

Questions Cloud

Estimate the total memory capacity : For a DRAM available for regular use 98% of the time, having a row-to-column ratio of 2 to 1, a cycle time of 10 ns, and a refresh cycle of 10 ms, estimate the total memory capacity.
Evaluate the success or failure of the intervention : Analyze the arguments for government intervention as opposed to arguments for market-based solutions.
How many word-line address bits can be accommodated : For a particular DRAM design, the cell capacitance CS =35 fF and VDD =1.2 V. Each cell represents a capacitive load on the bit line of 0.8 fF. Assume a 20-fF capacitance for the sense amplifier and other circuitry attached to the bit line. What is..
Delegate to a certain convention arrived by air : The probabilities are 0.4, 0.2, 0.3, and 0.1, respectively , that a delegate to a certain convention arrived by air, bus, automobile, or train. What is the probability that among 9 delegates randomly selected at this convention, 3 arrived by air, ..
Calculate the present value for the following annuity : You will receive $1,000,000 lump-sum, 25 years later. The discount rate is 3.25%. Using the equation/calculator method, determine the "present value.
Estimate the probability that thetotal error : Suppose that numbers are rounded off to the nearest integer so that each number has an error that is uniformly distributed inthe interval (-0.5,0.5).Use the central limit theorem to estimate the probability that thetotal error in the sum of the 64..
Capital expenditures are expenditures that keep assets : Capital expenditures are expenditures that keep assets in normal, good operating condition. True False?
The use of the direct write off method is allowed : The use of the direct write-off method is allowed under the materiality constraint. True or false?
Describe the implementation cycle for the balanced scorecard : Describe the four perspectives of the balanced scorecard and list one or more strategic objectives for each perspective that are likely to be important for MHB.

Reviews

Write a Review

Financial Management Questions & Answers

  Calculate the equivalent annual cost of each alternative

Blooper Industries must replace its magnesium purification system. Quick & Dirty Systems sells a relatively cheap purification system for $12 million. The system will last 3 years. Do-It-Right sells a sturdier but more expensive system for $20 millio..

  Delivery of advice and financial products to individuals

What part of finance is concerned with design and delivery of advice and financial products to individuals, business and government?

  The weight of debt in the firms capital structure

As a consultant to GBH skiwear, you have been ask to compute the appropriate discount rate to use to evaluate the purchase of a new warehouse facility. The firm's marginal tax rate is 34%. What discount rate should you use to evaluate the warehouse p..

  What was the firms operating cash flow

The 2014 balance sheet of Sugarpova's Tennis Shop, Inc., showed long-term debt of $5.2 million, and the 2015 balance sheet showed long-term debt of $5.3 million. The 2015 income statement showed an interest expense of $170,000. What was the firm’s 20..

  Real risk-free rate is expected to remain

The real risk-free rate is expected to remain at 3 percent. Inflation is expected to be 3 percent this year, and 4 percent next year. The maturity risk premium is estimated to be equal to 0.1%(t - 1), where t = the maturity of a bond (in years).

  Prepare a cash-flow budget and a profit budget

Prepare a cash-flow budget and a profit budget for Gringotts Ltd on the basis of Strategy 1. The budgets should be split into quarterly intervals showing cash-flow and profit forecasts for each individual quarter.

  Type of firms are most likely to payout cash dividends

Find the sample standard deviation for a security that has three one –year returns of 5%, 10%, and 15%. Which of the following investment evaluation tools is considered to be the best capital budgeting decision tool? Which of the following type of fi..

  The bonds make semiannual payments

Heginbotham Corp. issued 20-year bonds two years ago at a coupon rate of 8.3 percent. The bonds make semiannual payments. If these bonds currently sell for 104 percent of par value, what is the YTM?

  Calculate the share price for bills bakery

Bill’s Bakery expects earnings per share of $2.18 next year. Current book value is $3.9 per share. The appropriate discount rate for Bill’s Bakery is 13 percent. Calculate the share price for Bill’s Bakery if earnings grow at 4 percent forever.

  Calculate the dividend payout ratio

Johnson Products earned $3.10 per share last year and it paid out $.75 dividend. The company’s ROE is 16%. Calculate the dividend payout ratio; Calculate the sustainable growth rate of the company.

  Considering purchasing an apartment building

You are considering purchasing an apartment building for 1.2 million dollars. You expect the yearly cash inflows for the first three years to be $175,000 and year 4 and 5 will be $200000 and 250,000 respectively. At hte end of year 5 you sell the bui..

  Both offering certificates of deposit yielding

You are saving to buy a $191,000 house. There are two competing banks in your area, both offering certificates of deposit yielding 7.6 percent. How long will it take your initial $108,000 investments to reach th edesired level at First Bank, which pa..

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd