What is the present value of the savings if the interest

Assignment Help Finance Basics
Reference no: EM13488857

1.You are thinking of building a new machine that will save you $1000 in the first year. The machine will then begin to wear out so that the savings decline at a rate of 2% per year forever.What is the present value of the savings if the interest rate is 5% per year?

2.You work for a pharmaceutical company that has developed a new drug. The patent on the drug will last 17 years. You expect that the drug’s profits will be $2 million in its first year and that this amount will grow at a rate of 5% per year for the next 17 years. Once the patent expires,other pharmaceutical companies will be able to produce the same drug and competition will likely drive profits to zero. What is the present value of the new drug if the interest rate is 10% per year?

3.Your oldest daughter is about to start kindergarten at a private school. Tuition is $10,000 per year, payable at the beginning of the school year. You expect to keep your daughter in private school through high school. You expect tuition to increase at a rate of 5% per year over the 13 years of her schooling. What is the present value of the tuition payments if the interest rate is 5% per year? How much would you need to have in the bank now to fund all 13 years of tuition?

Reference no: EM13488857

Questions Cloud

Analyse the physical internal control weaknesses in system : HI5019 Strategic Information Systems for Business and Enterprise (T1, 2013). Analyse the physical internal control weaknesses in the system. Model your response according to the six categories of physical control activities specified in the COSO in..
Find with what speed does water spray from the hose : To water the yard, you use a hose with a diameter of 3.5cm . Water flows from the hose with a speed of 1.5m/s. with what speed does water spray from the hose
Evaluate the conductivity of silicon : Silicon has been doped with 5 x 10^22 m^-3 of boron atoms. Calculate the conductivity of silicon at (a) room temperature (32 C) (b) at (125 C)
Impact to the organization related to ethical breach : Corporate ethical breaches in recent times, assess whether or not you believe that the current business and regulatory environment is more conducive to ethical behavior and determine how the organizational ethical issue was detected and how managem..
What is the present value of the savings if the interest : You are thinking of building a new machine that will save you $1000 in the first year. The machine will then begin to wear out so that the savings decline at a rate of 2% per year forever.What is the present value of the savings if the interest rate ..
Using variable specific heat method : 1. A Brayton cycle uses air and produces a net work of 14000 Btu/s with an inlet state of 60°F, 14.7 psi and a compression ratio of 16. The heat added in the combustion process is 400 Btu/lbm. If the thermal efficiency is 0.547 Determine: Using va..
What is the speed of the blood in an arteriole : A typical arteriole has a diameter of 0.030 mm and carries blood at the rate of 5.5×10?6cm3/s. What is the speed of the blood in an arteriole
Explain how to prepare 2-bromo-2-phenylpropane from benzene : How do you prepare 2-Bromo-2-phenylpropane from benzene. Using Alcl3 as one of the reagents and going through an intermediate.
Estimate the speed of the water : A horizontal pipe contains water at a pressure of 100kPa flowing with a speed of 2.0m/s . The pipe narrows to one-half its original diameter. What is the speed of the water

Reviews

Write a Review

Finance Basics Questions & Answers

  How large will your retirement account be in 25 years

You are planning to make monthly deposits of $450 into a retirement account that pays 8 percent interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 25 years?

  Find the forward rate

If you were to buy 10 Sept 2011 Euribor futures at 99.35 & sell them at 99.40 three days later, how much money would you have made or lost? Every future has a tick value of €25

  What is the bonds expected rate of return

ExxonMobil 20-year bonds pay 6 percent interest annually on a $1,000 par value. If bonds sell at $945, what is the bonds' expected rate of return?

  What is the impact of subacute care on the cost and quality

during the nineteenth and the twentieth century the term nursing home was synonymous with long-term care. although

  The business maintains a perpetual inventory system costing

beginning inventory purchases and sales data for portable dvd players are as followsapril 1inventory120 units at

  Currently three hospitals serve the patient base of

merger analysis case studyfranklin teaching hospitalcurrently three hospitals serve the patient base of palmetto county

  Phillips has predicated a sales increase of 15 percent it

consider the following simplified financial statements for the phillips corporation assuming no income taxesincome

  Skywire telecommunications equipment company has invested

1. which one of the following statements about accrual accounting is incorrect?a. it is appropriate for the

  The target capital structure for qm industries is 35 common

1.the target capital structure for qm industries is 35 common stock 12 preferred stock and 53 debt. if the cost of

  Explain the fact that their roe is about 12 percent

It is widely known that grocery chains have low profit margins-on average, they earn about 1 percent on sales. How would you explain the fact that their ROE is about 12 percent? Does this seem logical?

  Determine the factors that the manager of a financial

question 1asuggest which factors have the most significant impact on a financial-service institutions decision

  Inflation, investment and costs

Steven & Dawn wanted to know how much it would cost to send their daughter Dawson to a private college. They have saved $20,000 to day for the purpose.

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