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Unformatted text preview: F301 Problem Set One Solutions Spring 2011 Please show your work in a professional, businesslike fashion. It should be neither crowded nor illegibly tiny. Make this assignment look like something you could present to your boss. Show your work in the form requested in the problem: either calculations and equations, or calculator inputs with the TVM keys. No credit will be given without complete work. Each problem is worth three points. Total possible points = 30. 1. ( Solve this problem using the y x key on your calculator, NOT the TVM keys. Show your work by writing out your calculations. ) Six years ago, my grandmother purchased a Ferrari Testarossa. Yesterday, she sold it for $353,642, which represented a rate of return of 18% per year. How much did she pay for the car when she bought it six years ago? ( ) 2. ( Solve this problem using the y x key on your calculator, NOT the TVM keys. Show your calculations. ) A money manager invested $12,000 in a mutual fund 42 months ago. The return on the mutual fund has been 8.6% per year. How much is in there now, at the end of 42 months? ( ) () 3. ( Solve this problem using the y x key on your calculator, NOT the TVM keys. Show your calculations. ) I am making a business investment today that will result in a single after-tax cash flow of $125,000 at the end of four years. I am willing to pay a price of $100,000 for the investment. What is my monthly required rate of return?...
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This note was uploaded on 03/15/2012 for the course BUS-F 301 taught by Professor T during the Spring '12 term at IUPUI.
- Spring '12