case 1 almost complete

case 1 almost complete - Q1. How would you choose the...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Q1. How would you choose the discount rate to apply to these cash flows? Answer: Economic Factors : Inflation, Future expectation, and the I/R for the economy. Risks: Systematic risk, Liquidity, Commodity, Price Risk (even foreign exchange risk) Q4) a) use financial calculator and input information FV= 35,000 N= 6 I/Y= 8.4 PMT= 0 PV= ? 21,572.1 b) FV= 35,000 N= 6 I/Y= ? 11.72% PMT= 0 PV= 18,000 c) FV= 35,000 N= 6 I/Y= ? 5.69788 * 2 = 11.3576 PMT= 0 PV= 18,000 5a. Ordinary Annuity b.N = 6 I/Y = 8.4 PV = 0 PMT = 3000 FV = ? = 22230.94 c.N = 6 I/Y = 8.5764 PV = 0 PMT=3000 FV = ? = 22330.08 press 2 nd ICONV = 8.4 C/Y = 2 EFF = ? = 8.5764 d. N=6 I/Y = 8.4 PV = 0 FV = -35000 PMT = ? = 4723.15 e. N=6 I/Y=8.4 PMT = 0 FV = -22230.94 PV = 13701.94 f. annual P/Y = 2 C/Y= 1 I/Y=8.4 N = 12 PMT = 1500 FV= ? =22688.38
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
semiannual P/Y = 2 C/Y= 2 I/Y=8.4 N = 12 PMT = 1500 FV= ? = 22799.01 quarterly P/Y = 2 C/Y= 4 I/Y=8.4 N = 12 PMT = 1500 FV= ? = 22856.88 Q7A. Now consider the schedule of payments from Table 1.
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 4

case 1 almost complete - Q1. How would you choose the...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online