Reference no: EM13828361
Problem:
1. Assuming zero taxes, calculate the future value of a $1,000 lump-sum contribution to a savings plan, compounded annually, at the end of:
(a) five years, using a 2% rate of return;
(b) thirty years, using a 12% rate of return.
2. A firm has the opportunity to invest in a project that is expected to pay an end-of-year annual return of $1.5 million for each of the next twenty years after taxes and expenses. The current cost of the project would be $7 million. Assuming a discount rate of 12%, as the required rate of return and (opportunity) cost of capital (i.e., economic costs of capital):
(a) Calculate the present value of the project to the firm.
(b) Calculate the net present value of the project.
(c) Using the net present value principle, determine whether or not the firm should make the investment.
(d) Using the internal rate of return principle, determine whether or not the firm should make the investment.
(e) Using the equilibrium market value of the firm principle, determine whether or not the value of the firm would increase if the firm decided to undertake this investment project.
Additional Information:
These questions is from finance and they deal with computation of present value and future value. While the first question deals with future value, the second question deals with expected annual return, opportunity cost, present value, an so forth. Answers to the questions have been given in the excel sheet attached.
|
Computing the probability of potential investment
: Provide three factors that favor leasing some type of capital equipment, rather than buying it. (b) State two advantages of buying some capital goods, rather than leasing them.
|
|
Phases of the capital budgeting process
: Explain why buying common stocks based on each of the following financial ratios would or would not be a good investment strategy: (a) a low price/sales (P/S) ratio; (b) a high dividend yield; (c) a high risk premium, based on Treynor's measure.
|
|
Write a short paper that recommends a deadlock avoidance
: Write a short paper that recommends a deadlock avoidance approach most suitable for the TSI web server application that is not using an ordered acquisition of mutexes.
|
|
Calculating ratio analysis and discounted interest rates
: Define the quick ratio (i.e., acid-test ratio) and return on equity ratio, and state what these financial ratios measure.
|
|
Calculate the future value
: Assuming zero taxes, calculate the future value of a $1,000 lump-sum contribution to a savings plan, compounded annually, at the end of:
|
|
Ipo chart its components and benefits to program development
: Discuss the IPO chart, its components, and its benefits to program development. In your opinion, what would be the impact if one of these components were omitted? Thoroughly explain.
|
|
Describe the origins or history of the mental disorders
: Developed an Annotated Bibliography of research on two disorders. For this assignment you will pick one of the disorders and write a term paper on that disorder. Describe the origins or history of the mental disorders
|
|
Contrast the standard network topologies
: Compare and contrast 2 of the 5 standard network topologies and the different variations of these topologies. What factors would you consider when implementing a particular topology
|
|
Presentation on the role of chief knowledge officer
: Presentation on the role of Chief Knowledge Officer
|