Questions from Corporate Finance

Q: Surmec, Inc., reported sales of $2.1 million

Surmec, Inc., reported sales of $2.1 million last year. The company’s primary business is the manufacture of nuts and bolts. Since this is a mature industry, analysts are confident that sales will gro...

Q: You will be graduating in two years and are thinking about your

You will be graduating in two years and are thinking about your future. You know that you will want to buy a house five years after you graduate and that you will want to put down $60,000. As of right...

Q: Kelly Martin has $10,000 that she can deposit into

Kelly Martin has $10,000 that she can deposit into a savings account for five years. Bank A pays compounds interest annually, Bank B twice a year, and Bank C quarterly. Each bank has a stated interest...

Q: Kate Eden received a graduation present of $2,000 that

Kate Eden received a graduation present of $2,000 that she is planning on investing in a mutual fund that earns 8.5 percent each year. How much money will she have in three years?

Q: Your bank pays 5 percent interest semiannually on your savings account.

Your bank pays 5 percent interest semiannually on your savings account. You don’t expect to add to the current balance of $2,700 over the next four years. How much money can you expect to have at the...

Q: Your birthday is coming up and instead of other presents, your

Your birthday is coming up and instead of other presents, your parents promised to give you $1,000 in cash. Since you have a part time job and thus don’t need the cash immediately, you decide to inves...

Q: Find the future value of a five-year $100,

Find the future value of a five-year $100,000 investment that pays 8.75 percent and that has the following compounding periods: a. Quarterly. b. Monthly. c. Daily. d. Continuous.

Q: Joe Mauer, a catcher for the Minnesota Twins, is expected

Joe Mauer, a catcher for the Minnesota Twins, is expected to hit 15 home runs in 2018. If his home-run-hitting ability is expected to grow by 12 percent every year for the following five years, how ma...

Q: Roy Gross is considering an investment that pays 7.6 percent

Roy Gross is considering an investment that pays 7.6 percent, compounded annually. How much will he have to invest today so that the investment will be worth $25,000 in six years?

Q: Konerko, Inc., management expects the company to earn cash flows

Konerko, Inc., management expects the company to earn cash flows of $13,227, $15,611, $18,970, and $19,114 over the next four years. If the company uses an 8 percent discount rate, what is the future...