Reference no: EM13877976
1. You are negotiating for the terms of a legal settlement, and your opponent’s attorney has presented you with the following alternative settlement alternatives:
a. $38,000 today in one lump sum.
b. $50,000 to be paid to you in five equal payments of $10,000 at the end of each of the next five years.
c. Five equal annual installments of $9,100 each, beginning today.
If your discount rate is 10%, what is the present value of each of the alternatives and which alternative would you choose?
2. If you deposit $100 in the bank today at an annual rate of 5.5% compounded annually, how long will it take to double In value?
3. Your Aunt Matilda Mae makes you the following offer: $15,000 upon undergraduate graduation in one year or $18,000 upon MBA graduation in 3 years. Which offer should you take if current rates are 14%?
|
What is the cash flow in year two of the project
: A potential project requires the purchase of $612,000 of equipment. The equipment will be depreciated straight-line to a zero book value over the three-year life of the project. Net working capital equal to 25 percent of sales will be required to sup..
|
|
Decide between two different conveyor belt systems
: Eads Industrial Systems Company (EISC) is trying to decide between two different conveyor belt systems. System A costs $538,000, has a 4-year life, and requires $133,000 in pretax annual operating costs. System B costs $630,000, has a five-year life,..
|
|
Able to withdraw each year of retirement
: How much will the client be able to withdraw each year of retirement, if the client wants to leave an amount equal to 20% of the starting amount of the retirement account on day retires (so 20% of $6,075,465), to heirs upon his death which he assumes..
|
|
Issues an annual bond-what is the yield to maturity
: A firm issues an annual bond today with a $1,000 face value, an 8% annual coupon interest rate, and 25-year maturity. An investor purchases the bond for $900. What is the yield to maturity (YTM)?
|
|
Negotiating for the terms of legal settlement
: You are negotiating for the terms of a legal settlement, and your opponent’s attorney has presented you with the following alternative settlement alternatives: f you deposit $100 in the bank today at an annual rate of 5.5% compounded annually, how lo..
|
|
Compute the ratios-Current ratio-Debt ratio-TIE ROA DSO
: A firm has current liabilities of $500. Account receivables are $300 and inventory is $400. All other current assets equal $800. Long term assets are $5000, long term liabities are $2500, sales is $8000, EBIT is $2000, interest expenses are $600 and ..
|
|
What is the net income
: Last year, DJ's Soda Fountains, Inc. reported an ROE = 27 percent. The firm's debt ratio was 50 percent, sales were $9 million, and the capital intensity ratio was 1.5 times. What is the net income for DJ's last year?
|
|
Calculate the net income for the firm
: A firm reported an ROE of 19 percent. The firm's debt ratio was 45 percent, sales were $12 million, and the capital intensity ratio was 1.1 times. Calculate the net income for the firm.
|
|
What is bonds price and annual yeld to maturity
: fixed coupon bond , 20 years left until maturity , coupon rate 6% , yield of bond 6.2% , paid semi annual. What is bond's price? fixed coupon bond, 12 years left until maturity , coupon rate 7% , price of bond is $1060.00 , paid semi annually. What i..
|