1) What is the total future value of the following set of cash flows at 8% rate? Year 1 2 3 4 5 6 Cash Flow –$1300 $1300 –$1300 $1300 –$1,300 $1300 2) You purchased a house for $325,000 with twenty percent down payment and finance the balance with a 30-year mortgage. Your monthly mortgage payment is $2,600. What is the effective annual rate of interest on the loan? 3) Regina Silva is planning for her retirement 25 years from now. She expects to live for 26 years after retirement. On the day she retires, she would like to purchase a condominium in Florida for $500,000. Starting one month after her retirement, she would like to withdraw $7,000 per month from her retirement account for the next thirteen years, and then increase the monthly amount to $8,000 per month for the remaining thirteen years. At the time she passes on, she would like to leave $500,000 for charity. Finally, she would also like to see the Olympics in Reo de Janeiro ten years from now. She expects that this trip will cost $7,500. She would like to make equal monthly deposits into her retirement account to accomplish these objectives. She can earn 9.25 percent compounded monthly. Assume all cash flows occur at the end of the month. 4) iverhawk Sports has return on equity of 19 percent, profit margin of 11 percent, sales to assets ratio of 1.18. What is the company’s debt to equity ratio? 5) You plan to retire with $8,000,000 in 45 years. How much should you deposit each month into an account that pays 9% annual rate compounded monthly? (Note: Compounding frequency is the same as the deposit frequency. Answers are rounded.) 6) You purchased a car for $33,000 with no down payment. You plan to pay it off with monthly payments of $850 in 4 years. What is the effective annual rate of interest on the loan? 7) An investment offers to pay you $22,300 per quarter for the next 10 years (The payments start one quarter after you purchase the investment). If you require 12% rate of return, how much should you pay for this investment? (Note: Answers are rounded.) 8) Please use the following information for this and the following question. The income statement for the Lowell Factory, Inc. for the last year had: Sales = $200,000; Cost of Goods Sold = $84,000; Selling, General and Administrative Expense = $18,000; Depreciation = $14,600; and interest expense = 6,477. The company raised $5,000 in new equity and reduced its long-term debt by $16,000. Its tax rate is 35 percent and the retention ratio is 0.6. What was the cash flow to stockholders? 9) What was the cash flow from assets for the Lowell Factory, Inc. from the above information?

Subject | Business |

Due By (Pacific Time) | 04/16/2014 02:00 pm |

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