Reference no: EM13722276
1. You have a child that is 10 years old, and would like to start saving up for their college education. You would like be able to pay $35,000 each year for four years of college starting 8 years from now (in years 8-11). How much do you need to save annually in years 1-7 to meet your goal, if you can earn a real annual return of 11% on your college savings account?
2. You are offered $1000 (in nominal dollars) 6 years from now in exchange for a loan of $750 today. You expect inflation to run 3.3% per year, and your real hurdle rate is 5%. Should you make the loan?
3. You would like to have $10000 (in real $) in an account 80 years from now. If the annual inflation rate is expected to be 2.2%, and you expect a nominal annual return of 5.5% on the account, how much would you need to put in today?
4. You buy a car, and take out a loan for $18,000 that has equal nominal annual payments over the next five years. The real rate of return on the loan is 3.9%, and the annual inflation rate is 2%. What will the payments be?
5. You have $1000 in an account that yields a nominal return of 5%. If the inflation rate is 2%, how long will you have to leave your money in the account for it to double in real terms?
6. A project costs $2000 immediately. The project yields nominal returns of $100 in year 1, $200 in year 2, $300 in year 3, $400 in year 4, and $500 in year 5. In addition, the project will have capital worth $1000 (in nominal $) left over in year 5. The real discount rate is 5% and the expected inflation rate is 2%. What is the NPV of this project?
7. You have $1000 to invest, and are choosing between two projects, both of which cost $1000 up front and will yield six years of returns. The returns for the first investment will start at $200 (in nominal $) a year from now and increasing at 8% annually. The returns for the second start at $250 (in real $) and increase at 2% annually. If your real hurdle rate is 3% and the expected inflation rate is 2.2%, which of these investments should you choose (if any)?
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What is the present value
: An investment will pay you $43,000 in 10 years. If the appropriate discount rate is 7 percent compounded daily, what is the present value? (Use 365 days a year. Do not round intermediate calculations and round your final answer to 2 decimal places. (..
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What is the projects net present value
: A construction company is considering an expansion project. So far, they have spent $75,000 investigating the viability of the project and have decided to proceed. The proposed project will cost approximately $450,000 in addition to the $75,000 that ..
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Watch the videos and review the oregon criminal justice
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How if found guilty, was the juvenile sentenced
: ? What issues arose surrounding the case in terms of adjudicating the suspect in juvenile or adult court? ? How, if found guilty, was the juvenile sentenced? ? Do you believe that the sentence was adequate? Excessive?
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Exchange for a loan problem
: You are offered $1000 (in nominal dollars) 6 years from now in exchange for a loan of $750 today. You expect inflation to run 3.3% per year, and your real hurdle rate is 5%. Should you make the loan? You have $1000 in an account that yields a nominal..
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Children and the court
: Collect several newspaper articles concerning current topics that involve juveniles. Outline the main points of the cases. Discuss any controversy regarding the handling of these cases. Which, if any, do you think ought to be handled in adult c..
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What is the operating cash flow or ocf
: The Losers company has sales of 19,500, costs of 17,300, depreciation expense of 1650 and interest expense of 1460. If the tax rate is 35 percent, what is the operating cash flow or OCF?
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Loan outstanding problem
: You currently have a one-year-old loan outstanding on your car. You make monthly payments of $350. You have just made a payment. The loan has four years to go (i.e., it had an original term of five years.) Show the timeline from your perspective. How..
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What will the price-earnings ratio at the end of year
: Mobil Oil is currently selling at $41 per share. Based on the last 12 months figures, the price earnings ratio is 4 and the dividend yield is 8%. Dividends are expected to grow at an annual compound rate of 6% and earnings at a rate of 12%.
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