Price of the land has been increasing

Assignment Help Financial Management
Reference no: EM13883400

1. Some time ago, Vanessa purchased eleven acres of land costing $58,500. Today, that land is valued at $253,167. How long has she owned this land if the price of the land has been increasing at 9% per year?

2. On your ninth birthday, you received $500 which you invested at 4% interest, compounded annually. Your investment is now worth $1,185. How old are you today?

3. Assume the total cost of a college education will be $200,000 when your child enters college in 15 years. You presently have $80,000 to invest. What rate of interest must you earn on your investment to cover the cost of your child's college education?

Reference no: EM13883400

Questions Cloud

What is the market value of assets of the firm : The book value of equity of a firm is $100 million and the market value of equity is $200 million. The face value of debt of the firm is $50 million and the market value of debt is $60 million. What is the market value of assets of the firm?
CAPM approach to calculate the cost of equity : If the cost of new common equity is higher than the cost of internal equity, why would a firm choose to issue new common stock? Calculate all MCC break points for the following information: What determines whether to use the dividend growth model app..
What do we mean by being a core competence : The various functions within the company are where the value is created but do they represent a core competence? So what do we mean by being a core competence
Equity cost of capital for the company that released shares : A stock is expected to pay $0.80 per share every year indefinitely. If the current price of the stock is $18.90, and the equity cost of capital for the company that released the shares is 6.4%, what price would an investor be expected to pay per shar..
Price of the land has been increasing : Some time ago, Vanessa purchased eleven acres of land costing $58,500. Today, that land is valued at $253,167. How long has she owned this land if the price of the land has been increasing at 9% per year? On your ninth birthday, you received $500 whi..
Assignment on cash distribution plan : The partnership of Pen, Evan, and Torves has asked you to assist in winding up its business affairs. You compile the following information:
What is the duration of assets-da-liabilites and equity : Consider the following bank balance sheet (fixed rates and pure discount securities unless indicated otherwise). Interest rates on liabilities are 10 percent and on assets are 12 percent. (See link for data) What is the duration of assets, DA, liabil..
Who in the company is involved in strategic planning effort : Who in the company is involved in the strategic planning effort? Is it just executives? Or are some line workers involved
Expect the price to increase by an average : Today, you earn a salary of $45,000 per year. What will be your annual salary 8 years from now if you earn annual raises of 3% per annum? You hope to buy your dream car 5 years from now. Today, that car costs $41,100. You expect the price to increase..

Reviews

Write a Review

Financial Management Questions & Answers

  To estimate the cost capital you have been provide with data

To estimate the cost of capital, you have been provided with the following data: rRF = 5.00%; the market return is 11.00%; and Beta = 1.0. Based on the CAPM approach, what is the cost of equity? -------- 5.0% 6.0% 10.4%   11.0%

  Mk robe-stones mk-r-s is a big manufacturing firm which was

mk robe-stones mk-r-s is a big manufacturing firm which was set up as a limited company 6 years ago in 2009 by a family

  Cause carolina to be indifferent between the two methods

Carolina Vineyards is considering two alternative production methods for turning grapes into wine. One method calls for using a hand-operated press, while the other would employ a new, automated press. It has been estimated that the variable cost per..

  What is incremental profit-should the firm make investment

Schweser Satellites Inc. produces satellite earth stations that sell for $95,000 each. The firm's fixed costs, F, are $2.5 million, 50 earth stations are produced and sold each year, profits total $500,000; and the firm's assets (all equity financed)..

  What is the major determinant of bond prices

What is the major determinant of bond prices? Explain your answer. The ABC bond carries a 6.5% semi-annual coupon rate and matures in 23 years. If the market yield on these bonds is 8%, calculate the price of the bond. If interest rates (yields) do n..

  Retained earnings using the percent of sales method

Ribbon Industries reported sales of $3 million and net income of $400,000 for 2010. The retained earnings balance at the end of 2012 is $7 million. Ribbon Industries has a dividend payout ratio of 30%. If sales are expected to increase by 25% next ye..

  Each asset is transferred subject to the liability

Henry swaps his shopping center for Sarah’s office building, and the exchange qualifies as a like-kind exchange. Henry’s adjusted basis for the shopping center is $600,000 and the center is subject to a liability of $180,000. The FMV of Sarah’s offic..

  Prepare a statement showing the incremental cash flows

Prepare a statement showing the incremental cash flows for this project over an 8-year period and calculate the payback period (P/B) and the net present value (NPV) for the project.

  What is the change in price bond will experience in dollars

A 6.45 percent coupon bond with fifteen years left to maturity is priced to offer a 7.9 percent yield to maturity. You believe that in one year, the yield to maturity will be 7.0 percent. What is the change in price the bond will experience in dollar..

  An underwritten offering or best-efforts offering

Which do you think is more risky for a firm trying to raise capital - an underwritten offering or a best-efforts offering?

  The investors geometric average return

An investor bought stock in a company for $10,000. Five years later, the investment (including reinvested dividends) was worth $8,000. The investor's geometric average return was:

  What are the arithmetic and geometric returns for the stock

A stock has had returns of -26 percent, 6 percent, 34 percent, -5 percent, 28 percent, and 19 percent over the last six years. What are the arithmetic and geometric returns for the stock?

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