Reference no: EM13850728
1-How does compound interest differ from simple interest?
2-What happens to a future value if you increase (decrease) the interest rate? Explain why.
3-What happens to a present value if you increase (decrease) the discount rate? Explain why.
4-As you increase (decrease) the length of time involved, what happens to future values? Explain why.
5-As you increase (decrease) the length of time involved, what happens to present values? Explain why.
6-What do we mean by discounted cash flow (DCF) valuation?
7-What is the basic present value equation?
8-What is the Rule of 72?
9-Why would you be willing to pay someone $25.00 today in exchange for their promise to pay you back four times that amount ($100.00) in 30 years?
10-If you were willing to pay $25.00 today in exchange for $100 in 30 years from now, what important things must you consider in agreeing accepting this investment? Would your acceptance of this investment depend on who is making the promise to pay you in 30 years?
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What is the funds net asset value per share
: The ABC open-end mutual fund has a total of $200,000,000 in assets invested in a portfolio of stocks and bonds. There are currently 8,000,000 fund shares outstanding. What is the fund’s Net Asset Value per share? If you invest $10,000 in the fund, ho..
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How much will ellie be able to borrow
: Having taken a finance course, Ellie decides to go to the bank and borrow money using the inheritance ($1,000,000) as collateral. She negotiates a deal where she borrows $XXX,XXX. How much will Ellie be able to borrow? How much interest will she pay..
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Memos with records revealed reconciling items
: The cash account for Online Medical Co. at June 30, 2014, indicated a balance of $9,925. The bank statement indicated a balance of $11,540 on June 30, 2014. Comparing the bank statement and the accompanying canceled checks and memos with the records ..
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What does continuous compounding mean
: As you increase (decrease) the length of time involved, what happens to the present value of an annuity? Explain why. What happens to the future value of an annuity if you increase (decrease) the interest rate? Explain why. What does continuous compo..
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What do we mean by discounted cash flow valuation
: How does compound interest differ from simple interest? What happens to a future value if you increase (decrease) the interest rate? Explain why. What happens to a present value if you increase (decrease) the discount rate? Explain why. What do we me..
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What is the cost of preferred stock financing
: (Cost of preferred stock) The preferred stock of Gator Industries sells for $34.35 and pays $2.74 per year in dividends. What is the cost of preferred stock financing? The flotation costs adjusted initial outlay for issuing the preferred share are?
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Issue new stock to finance its capital budget
: Assume that you are an intern with the Brayton Company, and you have collected the following data: The yield on the company's outstanding bonds is 7.75%; its tax rate is 40%; the next expected dividend is $0.65 a share; the dividend is expected to gr..
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Projected sales for the first six months
: LPD Logistics, Inc.'s projected sales for the first six months of 2010 are given below. 20% of sales are collected in the month of the sale, 75% are collected in the month following the sale, and 5% are written off as uncollectible. Cost of goods so..
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Individual or component costs of capital
: (Individual or component costs of capital) Compute the cost of capital for the firm for the following: A new common stock issue that paid a $1.85 dividend last year. The firm's dividends are expected to continue to grow at 7.7 percent per year, forev..
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