Calculate the present value of a lease on a warehouse

Reference no: EM1359422

1. Eleanor Spryzak has endowed her alma mater with a scholarship that is designed to pay out a sum of money to a worthy student every year forever. The scholarship amount increased in value by 3% every year. Which terms most accurately describe these assets?
a. annuity
b. perpetuity
c. growth perpetuity
d. assets with single cash flow

2. What is the value of a share of a firm's stock when the firm is expected to pay a $2.8 per share dividend at the end of each year and the annual discount rate is $7.5%
a. $448
b. $37.33
c. $39.61
d. $33.67

3. What is the present value of a lease on a warehouse, where the tenants have a lease that goes into perpetuity and have agree to pay $300 at the end of each month of the lease with an annual discount rate of 8%.
a. $3,750
b. $540,000
c. $45,000
d. $38,899

4. Your company just signed a 20 years lease for a new office. The lease requires that your firm pay to $1,000 of the end of each month over the life of the lease. If the current annual rate is 9% what is the present value of this annuity stream?
a. 11,111
b. 9,129
c. 111,145
d. 109,543

5. Peter Lord's financial advisor has suggest ed that he purchase a piece of land in an area of town that is being target for development. Peter's plan is to purchase the land and then sell it for a profit when demand in the area increases. Which terms most accurately describe these assets?
a. annuity
b. perpetuity
c. growth perpetuity
d. assets with single cash flow

6. An annuity due is an annuity in which the first payment occur immediately. Knowing that, which of the following statements is true?
a. The future value of a 10 year ordinary annuity exceeds the future value of a 10 year annuity due.
b. The present value of a 10-year ordinary annuity is equal to that of a 10-years annuity due.
c. The present value of a 10-year annuity due exceeds the present value of a 10-year ordinary annuity.
d. More information is needed to solve this problem.
7. For perpetuity is needed to solve this problem at a constant rate (g). What will the present value of the perpetuity approach as g approaches zero?
a. 0
b. 1
c. cash flow/r
d. infinity
8. A bond issued by the British government pays a coupon of 100 pounds on January1 of every year for 20 years. Which term most accurately describes these assets?
a. annuity
b. Growing perpetuity
c. Perpetuity
d. Assets with single cash flow
9. Suppose you invest $800 in a mutual fund at the end of each year for the next 30 years and the fund earns an annual rate of return of 10%. What will be the value of your retirement fund after 30 years?
a. $131,595
b. $151,791
c. $291,235
d. $161,582

10. You want to invest $200 at the end of each month until you have reached your goal of a total balance of $100,000. You plan to invest in an account that earns an annual rate of 8%. How many years will it take to earn the $100,000
a. 48.25 years
b. 7.14 year
c. 38.81 year
d. 18.39 years

Reference no: EM1359422

Questions Cloud

Drinking behavior does not change : I have met countless alcoholics who have been in therapy and AA for years, and really seem to have gotten good insight into the root of their problem, yet their drinking behavior does not change.

Explain independent and dependent variable : What dependent variables might be important in this study and prepare a hypothesis for each of your dependent variables.

Explaining first-in-first-out scheduling : Qqueue for service (if the server process is busy servicing another request). Requests in queue are served according to the scheduling policy in use: First-In-First-Out (FIFO) scheduling.

Compare and contrast cultural core beliefs or values : Ourline the Compare and contrast cultural core beliefs/values and secondary beliefs/values and Provide an example of each and discuss the potential impact marketers have on each

Calculate the present value of a lease on a warehouse : Eleanor Spryzak has endowed her alma mater with a scholarship that is designed to pay out a sum of money to a worthy student every year forever.

What is the wavelength of radio waves : What is the wavelength of radio waves. An electron in a TV is accelerated toward the screen across a potential difference of 54.2kV. How much kinetic energy does the electron gain while accelerating.

What soft skills do you believe you currently have : What soft skills do you believe you currently have? Give one-two examples of how you have used those skills and what soft skills do you want to develop?

Case stusy of alcoholism : Client brought into the detoxification unit of a local county hospital by the police after an incident at a crowded city park. He was arrested because of his assaultive behavior toward others.

Using cbc mode of operation what are consequences : Using CBC mode of operation what are the consequences of decrypting the cipher text if it has an error in the first bit of the first block C?

User Account

All Pages