You could earn 5.5% on your money in other investments with equal risk. What is the most you should pay for the annuity? (Points : 6) $2,697.93 $2775.79 $2,921.86 $3,075.64 $3,237.52 BEGIN Mode N 3 I/YR 5.5% PMT $1,000 FV $0.00 PV Therefore, to receive $1,000 at the beginning of each year for 3 years at 5.5%, the fair value you should pay is $2,697.93 HP 12C Suppose that you are offered an investment that will pay you $1,000 per year for 10 years. If you can earn a rate of 9% per year on similar investments, how much should you be willing to pay for this annuity? In this case we need to solve for the present value of this annuity since that is the amount that you would be willing to pay today.
1 1. If the beginning balance of retained earnings equals $12,000, the ending balance of retained earnings equals $15,000, and dividends for the year equal $1,000, then net income for the year equals: A. B. C. D. $3,000 $4,000 $2,000 $1,000 2. A company receives a $50,000 cash deposit from a customer on October 15 but will not provide services until November 20. Which of the following statements is true?
A dollar today is worth more than a dollar to be received in the future because-the dollar can be invested today and earn interes If you were to put $1,000 in the bank at 6% interest each year for the next 10 years, which table would you use to find the ending balance in your account? - compound sum of an annuity of $1 The FVIFA for the future value of an annuity is 4.5 at 10% for 4 years. If we wish to accumulate $8,000 by the end of 4 years, how much should the annual payments be?-. $1,778 Under what conditions must a distinction be made between money to be received today andmoney to be received in the future?- when idle money can earn a positive return An annuity may be defined as-a series of consecutive payments of equal An annuity may be defined as-a series of consecutive payments of equal amounts. You are to receive $12,000 at the end of 5 years.
Head Start suffered a cut of more than $10 million for the Head Start program affected for the 2008 Fiscal Year. The 2008 funding cut to Head Start means that programs will experience a decline in federal support by 11% since 2002. Federal support for Head Start kept a pace with the rise of inflation during this period. The budget rose from $6.54 billion in the fiscal year of 2002 to $7.77 billion for the fiscal year 2008. If Head Start programs received their full allocated monies from the ACF’s proposed 2009 budget increase, then programs would still operate in a negative stage by $923 million.
| | 8.78% | | 10.73% | | 11.71% | | 9.76% | | 4.88% | Redesigned Computers has 10 percent coupon bonds outstanding with a current market price of $910.00. The yield to maturity is 11.34 percent and the face value is $1,000. Interest is paid semiannually. How many years is it until this bond matures? | 12 years | | 13 years | | 15 years | | 21 years | | 14 years
In FBN’s case, their long-term debt ratios alone are 55.7% and 81.5% in years 12 and 13, respectively (and they’ve incurred interest rate increases); and ROCE in the same two years is 15.6% and 6.4%. Just observing these ratios, managers should have been able to see that the increase in borrowing (faster than sales profits) would greatly decrease the shareholders’ earnings. The Risk Analysis also shows that FBN’s current and quick ratios declined, meaning that they do not have enough resources to pay their debts over the next 12 months.
$10.05 o If the firm borrows $40 of the $100 at an interest rate of 10%, what are the firm's net earnings? $7.37 No financial leverage With financial leverage Sales $200 $1,600 Expenses $185 $185 EBIT 15 15 Interest 0 $4 EBT 15 11 Taxes 4.95 3.63 Net earnings $10.05 $7.37 o What is the return on the owners' investment in each case? Why do the returns differ? Return on equity: $10.05/$100 =10.05% $7.37/$40 = 18.425% The return for b is higher due to the financial leverage use being successful. The reduction of taxes with the financial leverage resulted in a reduction in taxes from the interest expense.
The total amount is $1,517,391 |13. Tuttle Buildings Inc. has decided to go public by selling $6,000,000 of new common stock. Its | |investment bankers agreed to take a smaller fee now (6% of gross proceeds versus their normal 10%) in exchange for a 1 year option to | |purchase an additional 250,000 shares at $7.00 per share. The | |Investment bankers expect to exercise the option and purchase the 250,000 shares in exactly one year, when the stock price is forecasted to| |be $6.50 per share. However, there is a chance that the stock | |price will actually be $12.00 per share one year from now.
Store Sensitivities Even if this store has 18.1% lower sales than the forecasted level by R&P, it can achieve the accepted NPV of prototype, besides, construction cost can increase to near $10 million and still the project can achieve the expected NPV of the P04. If the stores sales decline by 10%, the project’s NPV will decrease by almost $4 millions which provides an accepted NPV of 13,340 K$ which is still above the accepted NPV of P04. Variance to prototype The Store NPV of $17,046K is $7,326K above Prototypical Store NPV. Mainly Cost of Land ($3,675K) and sales (3,603K) followed by positive benefits from real state tax are contributing to this positive variation form P04
9.the primary difference(s) between the standard deviation and the coefficient of variation as measures of risk are: 10.The ____ is the ratio of ____ to the ____. 11.Sources of positive net present value projects include 12.Receiving $100 at the end of the next three years is worth more to me than receiving $260 right now, when my required interest rate is 10%. 13.The number of standard deviations z that a particular value of r is from the mean ȓ can be computed as z = (r - ȓ)/ Suppose that you work as a commission-only insurance agent earning $1,000 per week on average. Suppose that your standard deviation of weekly earnings is $500. What is the probability that you zero in a week?