Calculate the value at the end of investment

Assignment Help Financial Management
Reference no: EM131908788

1. You inherited an oil well that will pay you $25000 per year for 25 years with the first payment occurring today. if you think a fair return on the well is 7.5% compounded annually how much should you ask for if you decide to sell it?

2. James invests 1000 for 10 years at a nominal rate of interest of 10%. The rate of inflation is 8% over the 10 year period. Calculate the value at the end of 10 years of James’s investment in today’s dollars.

3. You agree to make 24 deposits of $500 at the beginning of each month into a bank account. at the end of the 24th month you will have 13000 in your account. if the bank compounds interest monthly, what nominal annual interest rate will you be earning?

Reference no: EM131908788

Questions Cloud

Purchasing set of machine tools to process special orders : The Simon Machine Tools Company is considering purchasing a new set of machine tools to process special orders.
Monthly payment amortized mortgage : you have arranged to finance the remaining 130000 with a 30 year monthly payment amortized mortgage at a 6% nominal annual interest rate,
What is the effective interest rate on the loan : The loan called for a compensating balance of 13 percent. What is the effective interest rate on the loan?
Dictate process and judgment for determining fair value : Specific rules dictate the process and judgment for determining fair value. how should the valuation be calculated?
Calculate the value at the end of investment : Calculate the value at the end of 10 years of James’s investment in today’s dollars.
They owe any taxes on funds as they withdrew them : Would they owe any taxes on the funds as they withdrew them (Under current tax laws)?
Why reward-to-risk ratio must be equal for all securities : Explain why the reward-to-risk ratio must be equal for all securities if the financial markets are efficient (law of one price).
Present value of annuity-determine present value : Present Value of an Annuity Determine the present value of $200,000 to be received at the end of each of four years,
How much should you be prepared to pay for stock : If you require a return of 8% on your investment, how much should you be prepared to pay for the stock?

Reviews

Write a Review

Financial Management Questions & Answers

  Calculate the monthly mortgage payment of principal

Calculate the monthly mortgage payment of principal and interest for the a loan with an initial balance of 150,000, an annual stated interest rate of 6%, and 30 years to maturity. Use Excel to develop this response and present your result within a se..

  Treasury bonds are considered safer than corporate bonds

Treasury Bonds are generally considered safer than Corporate bonds. Yet both types of fixed income instruments are subject to some sources of risk.

  Financial planning process after firm develop sales forecast

What is the next step in the financial planning process after a firm develops a sales forecast?

  Promises to generate cash flow

At a Discount Rate of 9.5%, a plot of land that promises to generate a cash flow of $ 12,000 per year forever Is worth:

  What was the firm’s cash flow to creditors

What was the firm’s cash flow to creditors during 2015?

  Likely to increase the firms additional funds needed

Which of the following is likely to increase the firm's additional funds needed?

  The beta be for other stock in your portfolio

You own a portfolio equally invested in a risk-free asset and two stocks. One of the stocks has a beta of 1.17 and the total portfolio is equally as risky as the market. What must the beta be for the other stock in your portfolio?

  The future value of an annuity

The IF for the future value of an annuity is 4.641 at 10% for 4 years. If we wish to accumulate $29,000 by the end of 4 years,

  Residual distribution policy

Puck’s Company has a capital budget of $1.1 Million. Puck’s company desires to maintain a target capital structure which is 35% debt and 65% equity. Puck’s company forecasts that its net income this year will be $800,000. If Puck’s company follows a ..

  Calculate expected return and standard deviation

The stock of Bruin, Inc., has an expected return of 13 percent and a standard deviation of 43 percent. The stock of Wildcat Co. has an expected return of 11 percent and a standard deviation of 37 percent. The correlation between the two stocks is .37..

  Example of capital budgeting decision

Which of the following is an example of a capital budgeting decision?

  What is breakeven stock price-call option on stock

A one-year call option on a stock with strike price of $45 cost $5 and a one-year put option on a stock with strike price of $35 cost $3. A trader shorts two put options and shorts one call option. What is the breakeven stock price, below which the t..

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