Present value calculations

Assignment Help Financial Management
Reference no: EM13921676

1. A. Present Value Calculations (Show/Explain your work as best as you can, at least show your inputs and state what you use for calculations)

A) Dr. Ima N. Pain has a patient that had $3,000 in services done. The customer cannot pay until a year from now. Dr. Ima earns a 5% return on her money. How much should she charge the patient if the patient will pay the bill in one year?

B) Dr. Pain has another patient that can only pay $300/month. If he makes monthly payments for one year, and Dr. Pain invests them at a 3% annual rate, what is the present value of the monthly payments? The payments will start one month from today.

C) Dr. Pain realizes that her 3% return is a monthly compounded rate. What is the effective annual rate (EAR)?

Reference no: EM13921676

Questions Cloud

Emerging economies and globalization : Articles related to the human resource management for MNCs, cross-cultural management, expatriate training, and expatriates' success/failure in overseas assignments
Calculate the price with no growth : Sisters Corp expects to earn $7 per share next year. The firm’s ROE is 12% and its plowback ratio is 80%. If the firm’s market capitalization rate is 10%. Calculate the price with the constant dividend growth model. (Do not round intermediate calcula..
Prepare a report for management : Prepare a report for management, stating the advantages and disadvantages of each depreciation method. Include in the report your recommendations on the choice of method consistent with the requirements of JAS 16/AASB 116.
Prepared by an employee who records cash transactions : Of the three widely used inventory costing methods (FIFO, LIFO, and average), the FIFO method of costing inventory is based on the assumption that costs are charged against revenues in the order in which they were incurred.
Present value calculations : Dr. Ima N. Pain has a patient that had $3,000 in services done. The customer cannot pay until a year from now. Dr. Ima earns a 5% return on her money. How much should she charge the patient if the patient will pay the bill in one year?
Prepare an amortization table as shown below : What item(s) in the table would appear on the 2016 statement of cash flows?
Bonds outstanding-changes in interest rates : Hooper Printing INC has bonds outstanding with 15 years left to maturity. You are entitled to 15 more interest payments, since the bonds have 8% semi-annual couponed. Per value at issue is $1000. However due to changes in interest rates, the bond mar..
Why mcdonald could not keep competitive advantage over time : In 2011, McDonald's was setting new sales recordsdespite a global economic slowdown and declining consumer confidence in theUSA. McDonald's performance in the marketplace made it the top performingcompany in the stock market.
Perceptual map-company position against its competitors : Prepare a positioning statement. Include a perceptual map that shows your company's position against its competitors. From this map, create a statement that depicts your position.

Reviews

Write a Review

 

Financial Management Questions & Answers

  What is the projects year one net cash flow

Keiper, Inc., is considering a new three-year expansion project that requires an initial fixed asset investment of $2.43 million. The fixed asset falls into the three-year MACRS class. The project is estimated to generate $1,990,000 in annual sales, ..

  Funds to pay cash for the entire expansion project

Winston Enterprises would like to buy some additional land and build a new factory. The anticipated total cost is $148.17 million. The owner of the firm is quite conservative and will only do this when the company has sufficient funds to pay cash for..

  What the new preferred stock

Annual dividend of 9% of its $100 par value. Preferred stock of this type yield at 6%. Assume dividends are paid annually. What is the value of preferred stock and interest rates levels increase to 12%. What the new preferred stock?

  Complete the table with the correct postp-merger figures

The following table show pre-merger figures of CH Enterprises and ComYon Corporation: CH Enterprises (Pre-Merger) ComYon Corp.(Pre-Merger) CH Enterprises (Post-Merger) 1) EPS $2.00 $2.00 ? 2) Price per Share $40 $20 ? 3) P/E Ratio 20 10 ? 4) # of Sha..

  Relationship between discounting and compounding

What is the relationship between discounting and compounding? What is the relationship between the present-value factor and the annuity present-value factor? What is an annuity due? How does this differ from an ordinary annuity?

  Treasury bill-what is the price and bond equivalent yield

A Treasury bill that settles on May 18, 2012, pays $100,000 on August 21, 2012. Assuming a discount rate of 3.87 percent, what is the price and bond equivalent yield? Use Excel to answer this question.

  Considering the purchase of new computer system

Nguyen, Inc., is considering the purchase of a new computer system (ICX) for $130,000. The system will require an additional $30,000 for installation. If the new computer system is purchased, it will replace an old system that has been fully deprecia..

  The amount of the net new equity raised during the year

A firm has net income for the year of $32,600. At the beginning of the year, the firm had common stock of $88,000, paid-in surplus of $154,000, and retained earnings of $29,000. At the end of the year, the firm had common stock of $103,000, paid-in s..

  Total amts that make banks balance sheet balance

Second National Bank Balance Sheet as of _____date (figures in million$) Assets: Cash assets: 5 Government Securities owned: 7 Loan secured by real estate: 30 Commercial industrial loans : 18 Bank fixed assets: 14 Total Assets 74 Liabilities Federal ..

  Decided to decrease the firms annual dividend

Horseshoe Stables is losing significant market share and thus its managers have decided to decrease the firm's annual dividend. The last annual dividend was $0.90 a share but all future dividends will be decreased by 10 percent annually. What is a sh..

  Maturity risk premium

The real risk-free rate is 3%, and inflation is expected to be 4% for the next 2 years. A 2-year Treasury security yields 8.4%. What is the maturity risk premium for the 2-year security?

  Maximum recommended monthly consumer credit payment

If my gross salary is $36,000 annually and her after-tax income is $28,800. What is my maximum recommended monthly consumer credit payment? How do you figure this out?

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!

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