Reference no: EM132223287
Business Finance Assignment -
Q1. Given Data
Present Value
|
Years
|
Interest Rate
|
Future Value
|
$570
|
15
|
10%
|
|
$8,922
|
9
|
18%
|
|
$64,133
|
3
|
12%
|
|
$219,850
|
10
|
4%
|
|
Using the above data, calculate the future value in each case. (Using the formula and also a financial calculator).
Q2. Given Data
Future Value
|
Years
|
Interest Rate
|
Present Value
|
$349
|
10
|
6%
|
|
$5,227
|
20
|
2%
|
|
$48,950
|
12
|
12%
|
|
$612,511
|
7
|
10%
|
|
Using the above data, calculate the present value in each case. (Using the formula and also a financial calculator).
Q3. Given the following data, solve for the interest rate in each case. (Use a financial calculator).
Present Value
|
Years
|
Future Value
|
Interest Rate
|
$475
|
4
|
$615
|
|
$7,350
|
7
|
$18,350
|
|
$27,175
|
11
|
$65,000
|
|
$93,412
|
19
|
$200,000
|
|
Q4. Given the following data, solve for the number of years in each case. (Use a financial calculator).
Present Value
|
Interest Rate
|
Future Value
|
Years
|
$1,200
|
8%
|
$2,590.71
|
|
$16,310
|
12%
|
$20,459.26
|
|
$75,000
|
3%
|
$182,044.69
|
|
$183,650
|
9%
|
$308,000
|
|
Q5. You expect your newly born child to attend college in 18 years. You have $12,000 to set aside for that purpose. You also expect that the total cost of college education to be $100,000 by that time. Calculate the interest rate at which you have to invest today to achieve your goal.
Q6. How long does it take to double your money at 9% interest rate?
Q7. How long does it take to triple your money at 9% interest rate?
Q8. Great Lakes Inc., has an unfunded pension liability of $300 million that must be paid in 18 years. The financial analyst wants to discount this liability back to, present for valuation purposes. The appropriate discount rate is 8%. What is the present value of this liability?
Q9. Highlight Inc. is considering an investment project with the following cash flows:
YEAR
|
Cash Flow
|
1
|
$300
|
2
|
$400
|
3
|
$600
|
4
|
$900
|
If the discount rate le 10%, calculate the present value oat these cash flows.
What will be the present if the discount rate is changed to 15%?
Q10. Newsys Inc., will generate $30,000 per year for the next five years from a new database system. The system requires an investment of 120,000 today. If the opportunity cost of funds is 6%, is the system worth installing?