What is the present value of your windfall

Assignment Help Financial Management

Reference no: EM13932896

Suppose you are committed to owning a $160,000 Ferrari.

Required: If you believe your mutual fund can achieve a 10.25 percent annual rate of return, and you want to buy the car in 10 years on the day you turn 30, how much must you invest today?

You have just received notification that you have won the $2.07 million first prize in the Centennial Lottery. However, the prize will be awarded on your 100th birthday (assuming you’re around to collect), 73 years from now.

Required:

What is the present value of your windfall if the appropriate discount rate is 11 percent?

Reference no: EM13932896

Questions Cloud

How long will it take until she pays off the loan : Brynn borrows $17,000 from the bank at an annual interest rate of 6% compounded monthly. She decides that she can make monthly payments of $250. How long will it take until she pays off the loan?

Find the percentage of men meeting those height requirements : Find the percentage of men meeting those height requirements. Are too many men denied the opportunity to join the Marines because they are too short or too tall?

Firm is primarily seeking rate of return : When using the pure play approach for a proposed investment, a firm is primarily seeking a rate of return that:

What is the value of the investment : If you put up $43,000 today in exchange for a 9.7 percent, 10-year annuity, what will the annual cash flow be? What is the value of the investment? What would the value be if the payments occurred for 38 years? What would the value be if the payments..

What is the present value of your windfall : Suppose you are committed to owning a $160,000 Ferrari. If you believe your mutual fund can achieve a 10.25 percent annual rate of return, and you want to buy the car in 10 years on the day you turn 30, how much must you invest today? What is the pr..

Find probability that amount of coffee is less than twelve : find the probability that the amount of coffee is less than 12.0 oz, between 11.2 oz and 12.7 oz, greater than 12.2 oz and between 11.9 oz and 12.0 oz.

Business development team at waitrose : Following the acquisition of Distell by Diageo the business development team at Waitrose is proposing the company purchase Distell's South African wine assets for 47 million. Your job is to evaluate the acquisition of the plant at the proposed pri..

How many dollars will the cash management system free up : Neon Light Company of Kansas City ships lamps and lighting appliances throughout the country. Ms. Neon has determined that through the establishment of local collection centers around the country, she can speed up the collection of payments by three ..

Service training manual for a service organisation : Develop a basic customer service training manual for a service organisation of your choice. The organisation should be in the tourism, hospitality, retail, personal services and sport or recreation industry.

User Account

All Pages