How much must you invest today

Assignment Help Financial Management
Reference no: EM131813176

Suppose you are committed to owning a $199,000 Ferrari. If you believe your mutual fund can achieve a 12 percent annual rate of return and you want to buy the car in 9 years on the day you turn 30, how much must you invest today? (Do not round intermediate calculations and round your final answer to 2 decimal places, e.g., 32.16.)

Reference no: EM131813176

Questions Cloud

Forecasting demand for supplemental health-life insurance : Identify sources of syndicated data that would be useful in forecasting the demand for supplemental health and life insurance.
Probability that next man juliet meets will have a height : Heights X of adult men are normally distributed with mean 69.1 inches and standard deviation 2.92 inches. Juliet, who is 63.25 inches tall.
Evaluate the soundness of the company financial policies : The completed report should include: An introduction to the company, including background information. Evaluate soundness of the company’s financial policies
Find the probability that a puck made by given process : A regulation hockey puck must weigh between 5.5 and 6 ounces. The weights X of pucks made by a particular process are normally distributed with mean 5.75 ounces
How much must you invest today : Suppose you are committed to owning a $199,000 Ferrari. how much must you invest today?
Sketch the density curve with relevant regions : A continuous random variable X has a normal distribution with mean 12.25. The probability that X takes a value less than 13 is 0.82.
Contribution to society of the foreign exchange market : The functions and contribution to society of the foreign exchange market, market participants and transactions.
Find the probability that when clock battery finally dies : Dogberry's alarm clock is battery operated. The battery could fail with equal probability at any time of the day or night.
Find the probability that desdemona waits more : Buses running a bus line near Desdemona's house run every 15 minutes. Without paying attention to the schedule she walks to the nearest stop to take the bus.

Reviews

Write a Review

Financial Management Questions & Answers

  Money will the investment banking syndicates earn on sale

A company wants to raise $500 million in a new stock issue. Its investment banker indicates that the sale of new stock will require 8 percent under pricing and a 7 percent spread. Assuming the company’s stock price does not change from its cur-rent p..

  Dividend is expected to increase thereafter

A company recently announced that it will pay its first annual dividend one year from today in the amount of $0.45 per share. The dividend is expected to increase thereafter by 4% annually. How much are you willing to pay today for one share of this ..

  Depreciation is straight-line to zero over life of project

We are evaluating a project that costs $1,200,000, has a five-year life, and has no salvage value. Assume that depreciation is straight-line to zero over the life of the project. Sales are projected at 88,500 units per year. Calculate the best-case a..

  Considering two mutually exclusive proposals

Management has $10,000,000 to invest in a worthwhile project. They are considering two mutually exclusive proposals,

  Yield to maturity-what is weighted average cost of capital

Peter's Audio has a "yield to maturity" on its debt of 7.8%, a cost of equity of 12.4%, and a cost of preferred stock of 8%. The common structure weights for common equity, preferred stock, & debt are 47.09%, 22.94%, and 21.97% respectively. If the t..

  How much money did he have for retirement

He left the money in this account for 20 years until he was ready to retire. How much money did he have for retirement?

  Required return exceed farleys required return

Bradford Manufacturing Company has a beta of 1.9, while Farley Industries has a beta of 0.75. The required return on an index fund that holds the entire stock market is 8.5%. The risk-free rate of interest is 6.75%. By how much does Bradford's requir..

  Three bonds in dollars-corporate bond and municipal bond

what is the par value and current interest payment of the TIPS? what is the price of these three bonds in dollars? Corporate bond, Municipal bond.

  Calculate non-operating terminal year cash flow

Calculate the non-operating terminal year cash flow. Calculate NPV. Should the machinery be purchased?

  What weighted average cost of capital

what weighted average cost of capital (WACC) should it use as it evaluates this project?

  What is the amount of the firms net fixed assets

The Caughlin Company has a long-term debt ratio of 0.26 and a current ratio of 1.10. Current liabilities are $820, sales are $6,240, profit margin is 8.5 percent, and ROE is 18.7 percent. What is the amount of the firm’s net fixed assets?

  Strangle on stock by buying one european call option

A trader buys a strangle on a stock by buying one European call option with strike price $55 for $3 and buying one European put option with strike price $45 for $2. The trader holds his position until maturity. For what stock price(s) at maturity, do..

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