Reference no: EM132853688
Questions -
Q1. Petrogazz convinced Mae Luna to play for their volleyball franchise for 3 seasons. They offered the player $1,000,000 in the 1st year, $2,500,000 in the 2nd year, and $3,000,000 in the 3rd year. Assuming end of year payments of the proceeds of the contract, how will we find the value of his contract today if Mae Luna has a discount rate of 12%, compounding semi-annually?
Q2. What will be the future value of the following cash flows by the end of the fifth year, if the interest rate is 6%, compounded annually?
|
End of Year
|
Cash Flow
|
|
1
|
$2,500
|
|
2
|
2,750
|
|
3
|
3,000
|
|
4
|
3,250
|
|
5
|
3,500
|
Q3. Jen Law Firm is evaluating a project that must produce a revenue of $4,600 in the 1st year, $5,200 in the 2nd year, $5,900 in the 3rd year, and $5,700 in the 4th year. The firm receives each cash flow at the end of each year. If the required return of Jen Law Firm is 12%, compounding semi-annually, how much will be the future value of these cash flows at the end of the 4th year?