Finance Homework Management questions

Question 2

1. If the effective rate is
19%. What is the nominal rate if compounding is daily. Do not enter the symbol
% in your answer. Simply enter the answer in percentages rounded off to two
decimal points.

Question 3

1.
The ABC Company is considering a new project which will require an
initial cash investment of $14,864. The projected cash flows for years 1
through 4 are $9,722, $9,118, $8,632, and $5,842, respectively. If the
appropriate discount rate is 11%, compute the NPV of the project.

Enter your answer
rounded off to two decimal points. Do not enter $ in the answer box.

Question 4

1. How many months it will
take to grow your money from $4,712 to $7,580 if you can earn an interest of
16% compounded monthly? Note: Do not write “months” in your answer.
Simply write the number in the answer box.

1 points

Question 5

1. What is the effective
rate of 18% compounded monthly?

Do not enter the symbol % in your answer. Simply
enter the answer in percentages rounded off to two decimal points.

1 points

Question 6

1. How much do you need to
invest today in order to have $14,899 at the end of 12 years if you are sure to
earn an interest at the rate of 11%? Note: Do not put $ sign in your answer.
Simply write the number in the answer box.

1 points

Question 7

1. What is the future value
of $2,029 invested for 6 years at 12% if interest is compounded semi-annually
(twice a year)? Note: Do not put $ sign in your answer. Simply write the number
in the answer box.

1 points

Question 8

1. If you can double your
money in 19 years, what is the implied annual rate of interest, given that
compounded in quarterly? Note: give your answer in percentages. Note: Do not
put % sign in your answer. Simply write the number in percentages in the answer
box.

Question 10

1. How many years it will
take you to quadruple (means 4 times) your money if you can earn 7% each year?
Note: Do not write “years” in your answer. Simply write the number in
the answer box.

1 points

Question 11

1. What is the future value
of $359 invested for 10 years at 13% if interest is compounded quarterly? Note:
Do not put $ sign in your answer. Simply write the number in the answer box.

1 points

Question 12

1. What is the future value
of annual payments of $6,087 for 17 years at 5 percent?

1 points

Question 13

1. In order to buy a house,
you take a loan of 100,000 at 7.5% for a period of 13 years. Compute the
balance remaining at the end of 5 years.

Do not enter the symbol $ in your answer. Enter
your answer as a positive number. Simply enter the answer rounded off to two
decimal points.

1 points

Question 14

1. The Perpetual Life
Insurance Co is trying to sell you an investment policy that will pay you and
your heirs $12,471 per year forever. Suppose the Perpetual Life Insurance Co.
told you the policy costs $180,064. At what interest rate would this be a fair
deal? Just enter the number in percentages up to 2 decimal points. Do not enter
% in the answer box.

1 points

Question 15

1. If you can triple your
money in 18 years, what is the implied rate of interest? Note: Do not put %
sign in your answer. Simply write the number in percentages in the answer box..

1 points

1 points

Question 17

1. What is the future value
of $4,357 invested for 29 years at 18% if interest is compounded semi-annually?
Note: Do not put $ sign in your answer. Simply write the number in the answer
box.

1 points

Question 18

1. How many years it will
take to grow your money from $3,308 to $9,537 if you can earn an interest of
15% compounded quarterly? Note: Do not write “years” in your answer.
Simply write the number in the answer box.

1 points

Question 19

1. What is the future value
of $661 for 15 years at 6 percent if interest is compounded semi-annually?
Note: Do not enter “$” in your answer. Simply write down the number
that you get as your answer.

1 points

Question 20

1. 026:

Say, you deposit $1,493 in a bank for 17 years. What is the amount you will
have in the bank at the end of 17 years if interest of 7 % for first 10 years
and interest of 9 % for the remaining years? Note: Do not put $ sign in your
answer. Simply write the number in the answer box.

1 points

Question 21

1. How much do you need to
invest today in order to have $4,498 at the end of 28 years if you are sure to
earn an interest at the rate of 15%, if interest is compounded monthly? Note:
Do not put $ sign in your answer. Simply write the number in the answer box.

1 points

Question 22

1. Kelly starting setting
aside funds 6 years ago to buy some new equipment for her firm. She has saved
$607 each quarter and earned an average rate of return of 5 percent. How much
money does she currently have saved for this purpose?

1 points

Question 23

1.
Assume interest rate of 3%. A company receives cash flows of $967
at the end of year 5, $316 at the end of year 7, and $624 at the end of year
10. Compute the future value of this cash flow stream.

Do not enter the symbol $ in your answer. Simply
enter the answer rounded off to two decimal points.

1 points

Question 24

1. How many years it will
take to grow your money from $3,641 to $7,248 if you can earn an interest of
13% compounded monthly? Note: Do not write “years” in your answer.
Simply write the number in the answer box.

1 points

Question 25

1. How much do you need to
invest today in order to have $9,131 at the end of 25 years if you are sure to
earn an interest at the rate of 9%, if interest is compounded quarterly? Note:
Do not put $ sign in your answer. Simply write the number in the answer box.

1 points

Question 26

1. What is the future value
of quarterly payments of $562 for 14 years at 6 percent?

1 points

Question 27

1.
If you receive $110 at the end of each year for the first three
years and $794 at the end of each year for the next three years. What is the
present value? Assume interest rate is 4%.

Hint: This is an uneven cash flow problem. Use
the CF function and solve for NPV to get the answer.

Just enter the number up to 2 decimal points. Do
not enter $ in the answer box.

1 points

Question 28

1. 027:

Say, you deposit $4,879 in a bank for 17 years. What is the amount you will
have in the bank at the end of 17 years if interest of 6 % compounded monthly
for first 9 years and interest of 6 % compounded quarterly for the remaining
years? Note: Do not put $ sign in your answer. Simply write the number in the
answer box.

1 points

Question 29

1. 023A:

If you can double your money in 23 years, what is the implied annual rate of
interest, given that compounded semi-annually? Note: give your answer in
percentages. Note: Do not put % sign in your answer. Simply write the number in
percentages in the answer box.

1 points

Question 30

1. Barrett Pharmaceuticals
is considering a drug project that costs $174,959 today and is expected to
generate end-of-year annual cash flows of $13,959, forever. At what discount
rate would Barrett be indifferent between accepting and rejecting the project?

Just enter the number in percentages up to 2
decimal points. Do not enter % in the answer box.

1 points

1 points

Question 33

1. Assume interest rate of
6%. Suppose that you receive $97,408 at the end of each year for 4 years.
Suppose that this cash flow starts at the end of the fourth year. Compute the
present value.

Do not enter the symbol
$ in your answer. Simply enter the answer rounded off to two decimal points.

1 points

Question 34

1. What should you be willing to
pay in order to receive $259 annually forever, if you require 5% per year on
the investment?

Just enter the number up to 2 decimal points. Do
not enter $ in the answer box.

1 points

Question 35

1. How many years it will
take you to double your money if you can earn 9% each year, given that
compounding is quarterly? Note: Do not write “years” in your answer.
Simply write the number in the answer box.

1 points

Question 36

1. Assume interest rate of
4%. A company receives cash flows of $81,403 at the end of years 4, 5, 6, 7,
and 8, and cash flows of $289,772 at the end of year 10. Compute the future
value of this cash flow stream.

Do not enter the symbol $ in your answer. Simply
enter the answer rounded off to two decimal points.