Reference no: EM131021305
Problem 1
Below you are presented with a series of present and future values, annual compounding interest rates and the number of years between the present and future values. For each set of values calculate the missing term (highlighted in yellow):
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Present Value
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Interest Rate
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# Years
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Future Value
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Example:
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$10,000
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7.5%
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20
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$ 42,479
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a.
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$10,000
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5.0%
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20
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b.
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$10,000
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10.0%
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20
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c.
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8.0%
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5
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$ 50,000
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d.
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8.0%
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10
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$ 50,000
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e.
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$25,000
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5
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$ 50,000
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Problem 2
You won a lottery which pays $10,000 per year for 10 years (at the end of each year). Assuming a discount rate of 8% calculate the present value of your expected winnings. Enter and/or calculate the cells highlighted in yellow:
Use the PV function of Excel to calculate the present value. Confirm that this is the same as your above calculation. (Note, the output of Excel's PV function is negative so you'll need to put a negative sign in front of it.)
Problem 3
Calculate the following (assume all payments are made at the end of the year)
What is the value today of a $10,000 payment made in perpetuity assuming a 8% discount rate?
Assume the same perpetuity as above but the payments will not begin for another five years. What is the present value of such a perpetuity?
What is the present value of a 5 year annuity which pays $10,000 per year and with an interest rate of 8%?
Problem 4
What is the relationship between the present value and time? Explain
What is the relationship between present value and the discount rate? Explain
Problem 5
You are told you will receive the following cash payments at the end of the next three years:
Year 1: $10,000
Year 2: $25,000
Year 3: $50,000
Assuming a discount rate of 12%, what is present value of all payments?
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Danielson company reported following stockholder''s equity
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Sketch relevant part of circuit and describe operation
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What is the price of the bond and its kind
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The annual dividend on $4.20 cumulative preferred
: The annual dividend on $4.20 cumulative preferred, 500,000 shares authorized, 160,000 shares issued, 137,400 shares outstanding. Last year's dividend has not been paid.
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What is the relationship between the present value and time
: What is the present value of a 5 year annuity which pays $10,000 per year and with an interest rate of 8%?
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When majority ownership is acquired
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What fraction of the chip is occupied by the i/o connections
: A 1.5-V, 1-Gbit dynamic RAM (called DRAM) by Hitachi uses a 0.16-μm process with a cell size of 0.38× 0.76 μm2 in a 19×38 mm2 chip. What fraction of the chip is occupied by the I/O connections, peripheral circuits, and interconnect?
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Complete the journal entry in proper form
: Prepare and present calculations for partial credits for questions with calculations and presentations - Explain the issues related to difference and how they would be resolved.
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How much must you repay at the end of the 6 months
: If you borrow $900 for 6 months at 14% annual simple interest, how much must you repay at the end of the 6 months?
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