QUESTION 1: 1. If the first deposit is at 36 years and the last expected deposit is at 65 years‚ then annual deposits will be made for 30 years. Expected annual withdrawals are $90‚000 for 15 years from the retirement fund with a bank that offers compound interest of 8% annually. Calculation Present value (PV) =? Future value (FV) = (90‚000*15) = $1‚350‚000 Periodic payment amount (PMT) =? Interest rate per period (Rate) = 8% or 0.08 Number of payment periods (Nper) = 30 Using the Excel
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A Comparison of Capital Budgeting Techniques Capital budgeting deals with setting the criteria and prescribing the process required for making capital investment choices. Choosing an investment project‚ that is‚ making a capital investment choice is ultimately a cost/benefit analysis. It requires valuing the project by comparing the payoff to its costs. Problem Value‚ rank and select investment projects Example 1. Project A Required rate year 1: year 2 year 3 year 4 year 5 Initial
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Sample Test_MT2_FINA 3101_summer_2013 ____ 1. Travis Corp.’s bonds currently sell for $1‚050. They have an 8% annual coupon rate and a 20-year maturity‚ but they can be called in 5 years at $1‚120. Assume that no costs other than the call premium would be incurred to call and refund the bonds‚ and also assume that the yield curve is horizontal‚ with rates expected to remain at current levels on into the future. Under these conditions‚ what rate of return should an investor expect to earn if
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answer is an original. Do not submit as your own. Chapter 9: Exercises 9-4‚ 9-7‚ 9-8‚ 9-9‚ 9-11‚ 9-12‚ 9-14‚ 9-16 (pages 347-348) • Problems 9-7‚ 9-12‚ 9-17 (pages 351-355) EXERCISE 9-4. Using Present Value Tables [LO 1] What is the present value of $600 per year for five years if the required return is 10 percent (answer using Table 2 in Appendix B). Cash Present Value Flow Factor Total $600 3.7908 $2‚274.48 EXERCISE 9-7. Calculate Present Value [LO 2] Juanita Martinez is
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Financial Management Assignment (10 Sep‚ 2012) ------------------------------------------------- Ch. 5: 1 (a-e)‚ 4‚ 5‚ 7‚ 10‚ 11‚ 12‚ 15 ------------------------------------------------- FM1 Takumi KAWAI‚ Pham NGUYEN‚ Yang CHEN‚ Bi CHAO #1 a. What is the payback period on each of the following projects? Payback period: A 3 years‚ B 2 years‚ C 3years b. Given that you wish to use the payback rule with a cutoff period of two years‚ which projects would you accept? “B” Only B meetsthe
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320‚000 112‚000 88‚909 4 3‚500‚000 280‚000 98‚000 72‚033 5 3‚000‚000 240‚000 84‚000 57‚169 6 2‚500‚000 200‚000 70‚000 44‚112 7 2‚000‚000 160‚000 56‚000 32‚675 8 1‚500‚000 120‚000 42‚000 22‚691 9 1‚000‚000 80‚000 28‚000 14‚007 10 500‚000 40‚000 14‚000 6‚485 Total 2‚200‚000 770‚000 575‚736 NPV (112‚110) PV of debt tax shield 575‚736 APV 463‚626 B) How does APV change if the
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Chapter 06 Discounted Cash Flow Valuation Multiple Choice Questions 1. An ordinary annuity is best defined by which one of the following? A. increasing payments paid for a definitive period of time B. increasing payments paid forever C. equal payments paid at regular intervals over a stated time period D. equal payments paid at regular intervals of time on an ongoing basis E. unequal payments that occur at set intervals for a limited period of time 2. Which one of the following
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Part 1: Fianacial Ratios After having the financial information about Deep water experts company‚ we have generated the financial ratios for the company for the years 2010‚ 2011 respectively as below and has the following comments: Liquidity: There is more than one ratio that measures the liquidity for a company which is included in the following table: Ratio Type | 2011 | 2010 | Liquidity | Current Ratio | 3.29 | 2.67 | Quick Ratio | 2.2 | 1.798 | Cash Ratio | 1.56 | 1.08 |
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interest of the Italian State to buy this stake before the group is put on the market so as to present a streamlined structure? Or would it be preferable to leave things as they are? Why? TABLE OF CONTENTS 1. Executive summary In the above case study Roberto Group incepted 30 years ago by IRI one of the largest holding companies
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EF4313 - Individual Case Questions: “Massey-Ferguson‚ Ltd. (1980)” You are responsible for handing in written answers to the following questions drawn from the Massey-Ferguson case. You can work with others on this assignment‚ but each individual must hand in their own set of answers. 1. Net sales for Massey-Ferguson actually increased between 1979 and 1980. Despite this‚ net income and income from continuing operations both dropped sharply in 1980. Which item on the income statement
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