What is the present value of this liability

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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?

Reference no: EM132223287

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