a- Assuming that the desired rate of return is 15-- determine the net.docx

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a. Assuming that the desired rate of return is 15%, determine the net present value for the proposal. (If required, round to the nearest dollar.) Use the table of the present value of $1 presented above. Solution Solution : .

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a- Assuming that the desired rate of return is 15-- determine the net.docx

1. The document provides examples of time value of money problems involving present value, future value, interest rates, and number of periods calculations. It gives the calculations for various cash flows received or paid in different periods with different interest rates. 2. It includes problems calculating NPV for projects such as factories, machines, and ships where the cash flows include costs, revenues, operating costs, refit costs, and salvage value over multiple periods. 3. The last examples calculate the amount of annual savings needed to buy a boat in 5 years and the annual annuity payment an individual can expect based on investing a present value over their life expectancy.

ACC206 Week Five ProblemsPlease complete the following 5 exercis.docx

annetnash8266

ACC206 Week Five Problems Please complete the following 5 exercises below in either Excel or a word document (but must be single document). You must show your work where appropriate (leaving the calculations within Excel cells is acceptable). Save the document, and submit it in the appropriate week using the Assignment Submission button. 1. Basic present value calculations Calculate the present value of the following cash flows, rounding to the nearest dollar: a. A single cash inflow of $12,000 in five years, discounted at a 12% rate of return. b. An annual receipt of $16,000 over the next 12 years, discounted at a 14% rate of return. c. A single receipt of $15,000 at the end of Year 1 followed by a single receipt of $10,000 at the end of Year 3. The company has a 10% rate of return. d. An annual receipt of $8,000 for three years followed by a single receipt of $10,000 at the end of Year 4. The company has a 16% rate of return. 2. Cash flow calculationsand net present value On January 2, 20X1, Bruce Greene invested $10,000 in the stock market and purchased 500 shares of Heartland Development, Inc. Heartland paid cash dividends of $2.60 per share in 20X1 and 20X2; the dividend was raised to $3.10 per share in 20X3. On December 31, 20X3, Greene sold his holdings and generated proceeds of $13,000. Greene uses the net-present- value method and desires a 16% return on investments. a. Prepare a chronological list of the investment's cash flows. Note: Greene is entitled to the 20X3 dividend. b. Compute the investment's net present value, rounding calculations to the nearest dollar. c. Given the results of part (b), should Greene have acquired the Heartland stock? Briefly explain. 3. Straightforwardnet present value and internal rate of return The City of Bedford is studying a 600-acre site on Route 356 for a new landfill. The startup cost has been calculated as follows: Purchase cost: $450 per acre Site preparation: $175,000 The site can be used for 20 years before it reaches capacity. Bedford, which shares a facility in Bath Township with other municipalities, estimates that the new location will save $40,000 in annual operating costs. a. Should the landfill be acquired if Bedford desires an 8% return on its investment? Use the net-present-value method to determine your answer. 4. Straightforward net-present-value and payback computations STL Entertainment is considering the acquisition of a sight-seeing boat for summer tours along the Mississippi River. The following information is available: Cost of boat $500,000 Service life 10 summer seasons Disposal value at the end of 10 seasons $100,000 Capacity per trip 300 passengers Fixed operating costs per season (including straight-line depreciation) $160,000 Variable operating costs per trip $1,000 Ticket price $5 per passenger All operating costs, except depreciation, require cash outlays. On the basis of similar operations in other parts of the country, manageme.

Review

Jessie Hyman Jackson

The document discusses various bond and stock valuation problems. For the first problem, the bonds have a coupon rate of 8% and yield to maturity of 8%, so the current market price is $1,000, the par value. If yield to maturity is 9%, the market price would be less than par value at $960. For Snyder Computer Chips, the stock is valued using a multistage dividend discount model to reflect a period of supernormal growth slowing to a constant growth rate. The calculated current stock price is $25.23. For preferred stock paying $5 annual dividends and selling at $60, the required rate of return is 8.33%.

Lecture 10 basic tools of finance

Gale Pooley

This document provides a summary of a lecture on basic tools of finance. It begins with 10 multiple choice questions covering topics like major stock markets, stock price to earnings ratios, and reasons to invest in mutual funds. It then provides definitions for key terms in finance like present value, future value, and risk aversion. Several key formulas are presented for calculating future value using compounding and present value using discounting. An example of how compounding works is shown along with the effects of different interest rates on future values over time.

Chapter 6: The Time Value of Money

Nada G.Youssef

The document discusses the time value of money concept. It explains that a dollar today is worth more than a dollar in the future due to factors like interest rates and the ability to earn interest on money over time. It also discusses the difference between future value, which measures the worth of cash flows after time has passed, and present value, which measures the current worth of future cash flows. Formulas are provided for calculating future value, present value, and the value of annuities over time discounted at a given interest rate. Examples are included to demonstrate calculations.

Chapter 6 microeconomics

Noor Asma Zakaria

This chapter discusses discounted cash flow valuation and concepts related to future and present value of multiple cash flows. It covers annuities, perpetuities, loan amortization, and effective annual rates. Examples are provided to illustrate computing future and present values of cash flows occurring at different times, as well as growing annuities and perpetuities. Key formulas and the distinctions between annual percentage rates, effective annual rates, and stated interest rates are also explained.

PA 1c. Decision VariablesabcdCalculated values0.21110.531110.09760.docx

gerardkortney

PA 1c. Decision VariablesabcdCalculated values0.21110.531110.09760.16019TotalObjective Function0.860.940.930.850.90772Constraints1111110.774-0.094-0.093-0.0850.09077>=0-0.0860.846-0.093-0.0850.40847>=0-0.086-0.0940.837-0.0851.90E-17>=0-0.086-0.094-0.0930.7650.04539>=00.94-2.790.22693>=00.86-1.86-2.00E-16>=0-0.129-0.141-0.13950.72256.90E-17>=0 a. Let the weights be a, b, c and d to midterm, final, individual assignment and Participation respectively. Korey would like to maximize the course grade. Therefore the course grade (Maximization): =0.86a + 0.94b + 0.93c + 0.85d Restrictions to course grade working: a+b+c+d=1 The weights must be non-negative, Non negativity constraints: a, b, c, d ≥ 0 The four components for each should determine 10% of the sum of the grade at least. 0.86a ≥ 0.1 (0.86a + 0.94b + 0.93c + 0.85d) 0.86a ≥ 0.086a + 0.094b + 0.093c + 0.085d 0.774a – 0.094b – 0.093c -0.085d ≥ 0 0.94b ≥ 0.1 (0.86a + 0.94b + 0.93c + 0.85d) 0846b ≥ 0.086a + 0.094b + 0.093c + 0.085d 0.846b – 0.086a – 0.093c – 0.085d ≥ 0 0.93c ≥ 0.1 (0.86a + 0.94b + 0.93c + 0.85d) 0.93c ≥ 0.086a +0.094b +0.093c + 0.085d 0.837c – 0.086a – 0.094b – 0.085d ≥ 0 0.85d ≥ 0.1 (0.86a + 0.94b + 0.93c + 0.85d) 0.85d ≥ 0.086a + 0.094b + 0.093c + 0.085d 0.765d – 0.086a – 0.094b – 0.093c ≥ 0 Here it is three times the particular assignment grade. 0.94b ≥ 3(0.93c) 0.94b ≥ 2.79c 0.94b – 2.79c ≥ 0 Midterm grade must count at least twice as much as the individual assignment score. 0.86a ≥ 2(0.93c) 0.86a ≥ 1.86c 0.86a – 1.86c ≥ 0 The presence of the grade should be less than the 15% of the whole grade. 0.85d ≤ 0.15(0.86a + 0.94b +0.93c +0.85d) 0.85d ≤ 0.129a + 0.141b +0.1395c + 0.1275d 0.7225d – 00.129a – 0.141b – 0.1395c ≥ 0 b. The complete optimization model is Course grade (Maximization): = 0.86a + 0.94b + 0.93c + 0.85d a+b+c+d=1 0.774a – 0.094b - 0.093c – 0.085d ≥ 0 0.846b – 0.086a – 0.093c – 0.085d ≥ 0 0.837c – 0.086a – 0.094b – 0.085d ≥ 0 0.765d – 0.086a – 0.094b – 0.093c ≥ 0 0.94b – 2.79c ≥ 0 0.86a – 1.86c ≥ 0 0.7225d – 0.129a – 0.141b – 0.1395c ≥ 0 c. Therefore midterm weights should be 21%, final weights 53%, individual assignment 10%, Participation should be 16%. The maximum course grade is 90%. PA 5b.Rosenberg Land DevelopmentDataOneTwoThreeBedroomBedroomBedroomUnitUnitUnit1BR2BR3BRAvailableConstruction cost$450,000$600,000$750,000$180,000,000Total units325Profit/ unit$45,000$60,000$75,000Minimum15%25%25%ModelTotalUnits Build4067162270Minimum406767Construction cost$18,202,247$40,449,438$121,348,315$180,000,000Contribution in profit$1,820,225$4,044,944$12,134,831$18,000,000c.ModelTotalUnits Build4981195325Minimum498181Construction cost$21,937,500$48,750,000$146,250,000$216,937,500Contribution in profit$2,193,750$4,875,000$14,625,000$21,693,750 a. 1BR = number of one bedroom units produced 2BR = number of two bedroom units produced 3BR = number of three bedroom units produced Maximize Total Profit = $45,000 (1BR) + $60,000 (2BR) + $75,000 (3BR) (1BR) + (2BR) + (.

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JohnJones780

This document focuses on End of Chapter questions and commonly asked questions under Quantitative methods (Time Value of Money ) . The mainly asked questions include : -calculation and interpretation of Future Value and Present Value of a single sum of money , an ordinary annuity, annuity due, a perpetuity (PV only) and a series of unequal cash flows. -demonstration of the use of timelines in modeling and solving time value of money This is a very interesting topic!