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Diane has just turned 18 and also completed high school and is wondering about the value of a college education. She is pretty good with numbers, and driven by financial considerations only, so she sits down to calculate whether it is worth the large sum of money. She knows that her first year tuition will be $12,000, due at the beginning of the year (that is, right away). Based on historical trends she estimates that tuition will rise at 6% per year for the 4 years she is in school. She also estimates that her living expense above and beyond tuition will be $8,000 per year (assume this occurs at the end of the year) for the first year and will increase $500 each year thereafter to keep up with inflation. She does not plan to work at all while attending school. Were she to forgo college she would be able to make $25,000 per year out of high school and expects that to grow 3% annually. With the college degree, she estimates that she will earn $45,000/year out of college, again with annual 3% increases in salary. Either way, she plans to work until turning 60 (she begins college right away). The interest/discount rate is 6%. What is the NPV of her college education (rounding to the nearest dollar)? Note: All cash flows except tuition payments occur at the end of the year.
Six years ago, Goodwynn & Wolf Incorporated sold a 17-year bond issue with a 12% annual coupon rate and a 7% call premium. Today, G&W called the bonds. The bonds originally were sold at their face value of $1,000. Compute the realized rate of return ..
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what annual return on investment would your family have earned on the painting?
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(Cost of debt) Gillian Stationery Corporation needs to raise $569,000 to improve its manufacturing plant. It has decided to issue a $1,00 par value bond with an annual coupon rate of 8.4% with interest paid semi-annually at 15-year maturity. Investor..
How low could the resale value of the Fiasco be to provide equally economical transportation?
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We are applying a nine-step comprehensive financial assessment process for the Walt Disney Company. What are their business unit strategies?
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