Finance Homework

Anonymous
timer Asked: Jan 21st, 2019
account_balance_wallet $15

Question Description

Need help with finance. There're 10 questions in the attached file. Please show work as to how you got the final answers. Provide clear explanation that's easy to understand.

Q1 Cullumber, Inc., management expects the company to earn cash flows of $13,300, $16,300, $19,000, and $19,500 over the next four years. If the company uses an 6 percent discount rate, what is the future value of these cash flows at the end of year 4? (Round answer to 2 decimal places, e.g. 15.25. Do not round factor values.) Future Value $____ Q2 Jason Allen borrowed some money from his friend and promised to repay him $1,230, $1,330, $1,550, $1,620, and $1,620 over the next five years. If the friend normally discounts investment cash flows at 7.5 percent annually, how much did Jason borrow? (Round answer to 2 decimal places, e.g. 15.25. Do not round factor values.) Present Value $____ Q3 Barbara Jones is a sales executive at a Baltimore firm. She is 25 years old and plans to invest $4,100every year in an IRA account, beginning at the end of this year until she reaches the age of 65. If the IRA investment will earn 11.90 percent annually, how much will she have in 40 years, when she turns 65? (Round factor values to 4 decimal places, e.g. 1.5212 and final answer to 2 decimal places, e.g. 15.25.) Future Value of Investment $___ Q4 Lisa Anderson is a sales executive at a Baltimore firm. She is 25 years old and plans to invest $3,600 each year in an IRA account until she is 65 at which time she will retire (a total of 40 payments). If Lisa invests at the beginning of each year, and the IRA investment will earn 10.55 percent annually, how much will she have when she retires? Assume that she makes the first payment today. (Round factor values to 4 decimal places, e.g. 1.5212 and final answer to 2 decimal places, e.g. 15.25.) Future Value of Investment $___ Q5 Anthony Walker is saving for an Australian vacation in three years. He estimates that he will need $4,310 to cover his airfare and all other expenses for a week-long holiday in Australia. If he can invest his money in an S&P 500 equity index fund that is expected to earn an average annual return of 10.8 percent over the next three years, how much will he have to save every year if he starts saving at the end of this year? (Round factor values to 4 decimal places, e.g. 1.5212 and final answer to 2 decimal places, e.g. 15.25.) Savings $___ Q6 Your grandfather is retiring at the end of next year. He would like to ensure that his heirs receive payments of $10,600 a year forever, starting when he retires. If he can earn 7.0 percent annually, how much does your grandfather need to invest to produce the desired cash flow? (Round answer to 2 decimal places e.g. 15.25.) Present Value of Investment $___ W7 Michael Jones borrowed $15,550 from a bank for three years. If the quoted rate (APR) is 6.45 percent, and the compounding is daily, what is the effective annual interest rate (EAR)? (Round answer to 2 decimal places e.g. 15.25%. Use 365 days for calculation.) Effective Annual Interest Rate ___% Q8 You are evaluating a growing perpetuity investment from a large financial services firm. The investment promises an initial payment of $15,800 at the end of this year and subsequent payments that will grow at a rate of 3.3 percent annually. If you use a 9 percent discount rate for investments like this, what is the present value of this growing perpetuity? (Round answer to 2 decimal places, e.g. 15.25.) Present Value $____ Q9 Crane Energy Company owns several gas stations. Management is looking to open a new station in the western suburbs of Baltimore. One possibility that managers at the company are evaluating is to take over a station located at a site that has been leased from the county. The lease, originally for 99 years, currently has 73 years before expiration. The gas station generated a net cash flow of $96,270 last year, and the current owners expect an annual growth rate of 6.3 percent. If Crane Energy uses a discount rate of 12.8 percent to evaluate such businesses, what is the present value of this growing annuity? (Round factor values to 6 decimal places, e.g. 1.521253 and final answer to 2 decimal places, e.g. 15.21.) Present Value $____ Q10 Oriole Productions borrowed some money from the California Finance Company at a rate of 18.40 percent for a seven-year period. The loan calls for a payment of $1,512,000 each year beginning today. How much did Oriole borrow? (Round factor values to 4 decimal places, e.g. 1.5214 and final answer to nearest whole dollar, e.g. 5,275.) Oriole Borrowed $___

Tutor Answer

FrankRose23
School: Rice University

Attached.

Q1 Cullumber, Inc., management expects the company to earn cash flows of $13,300, $16,300, $19,000,
and $19,500 over the next four years. If the company uses a 6 percent discount rate, what is the future
value of these cash flows at the end of year 4? (Round answer to 2 decimal places, e.g. 15.25. Do not
round factor values.)

Future Value =$73,795.19
Future value = 13,300(1.06)3 + 16,300(1.06)2 + 19,000(1.06)1 + 19,500
Future value = $73,795.19
Q2 Jason Allen borrowed some money from his friend and promised to repay him $1,230, $1,330,
$1,550, $1,620, and $1,620 over the next five years. If the friend normally discounts investment cash
flows at 7.5 percent annually, how much did Jason borrow? (Round answer to 2 decimal places, e.g.
15.25. Do not round factor values.)
Present Value =$5,884.25
Present value = 1,230(1.075)-1 + 1,330(1.075)-2 + 1,550(1.075)-3 + 1,620(1.075)-4 + 1,620(1.075)-5Present value =$5,884.25
Q3 Barbara Jones is a sales executive at a Baltimore firm. She is 25 years old and plans to
invest $4,100every year in an IRA account, beginning at the end of this year until she reaches the age of
65. If the IRA investment will earn 11.90 percent annually, how much will she have in 40 years, when she
turns ...

flag Report DMCA
Review

Anonymous
Tutor went the extra mile to help me with this essay. Citations were a bit shaky but I appreciated how well he handled APA styles and how ok he was to change them even though I didnt specify. Got a B+ which is believable and acceptable.

Similar Questions
Hot Questions
Related Tags
Study Guides

Brown University





1271 Tutors

California Institute of Technology




2131 Tutors

Carnegie Mellon University




982 Tutors

Columbia University





1256 Tutors

Dartmouth University





2113 Tutors

Emory University





2279 Tutors

Harvard University





599 Tutors

Massachusetts Institute of Technology



2319 Tutors

New York University





1645 Tutors

Notre Dam University





1911 Tutors

Oklahoma University





2122 Tutors

Pennsylvania State University





932 Tutors

Princeton University





1211 Tutors

Stanford University





983 Tutors

University of California





1282 Tutors

Oxford University





123 Tutors

Yale University





2325 Tutors