Questions from Financial Management

Q: a. What is the present value of $100,

a. What is the present value of $100,000 to be received after 40 years with an 18 percent discount rate? b. Would the present value of the funds in part a be enough to buy a $125 concert ticket?

Q: You will receive $4,000 three years from now.

You will receive $4,000 three years from now. The discount rate is 10 percent. a. What is the value of your investment two years from now? Multiply $4,000 × .909 (one year’s discount rate at 10 percen...

Q: The difficult part of solving a problem of this nature is to

The difficult part of solving a problem of this nature is to know what to do with the information contained within a story problem. Therefore, this problem will be easier to complete if you rely on Ch...

Q: Ultravision, Inc., anticipates sales of $240,000 from

Ultravision, Inc., anticipates sales of $240,000 from January through April. Materials will represent 50 percent of sales and because of level production, material purchases will be equal for each mon...

Q: If you invest $12,000 today, how much will

If you invest $12,000 today, how much will you have: a. In 6 years at 7 percent? b. In 15 years at 12 percent? c. In 25 years at 10 percent? d. In 25 years at 10 percent (compounded semiannually)?...

Q: Your aunt offers you a choice of $20,000 in

Your aunt offers you a choice of $20,000 in 50 years or $45 today. If money is discounted at 13 percent, which should you choose?

Q: Your uncle offers you a choice of $100,000 in

Your uncle offers you a choice of $100,000 in 10 years or $45,000 today. If money is discounted at 8 percent, which should you choose?

Q: In Problem 7, if you had to wait until 12 years

In Problem 7, if you had to wait until 12 years to get the $100,000, would your answer change? All other factors remain the same. Data from Problem 7: Your uncle offers you a choice of $100,000 in 10...

Q: You are going to receive $200,000 in 50 years

You are going to receive $200,000 in 50 years. What is the difference in present value between using a discount rate of 15 percent versus 5 percent?

Q: How much would you have to invest today to receive:

How much would you have to invest today to receive: a. $12,000 in 6 years at 12 percent? b. $15,000 in 15 years at 8 percent? c. $5,000 each year for 10 years at 8 percent? d. $40,000 each year for...