Questions from Financial Management

Q: If you invest $8,000 per period for the following

If you invest $8,000 per period for the following number of periods, how much would you have? a. 7 years at 9 percent. b. 40 years at 11 percent.

Q: You invest a single amount of $12,000 for 5

You invest a single amount of $12,000 for 5 years at 10 percent. At the end of 5 years you take the proceeds and invest them for 12 years at 15 percent. How much will you have after 17 years?

Q: Mrs. Crawford will receive $6,500 a year for

Mrs. Crawford will receive $6,500 a year for the next 14 years from her trust. If a 8 percent interest rate is applied, what is the current value of the future payments?

Q: John Longwaite will receive $100,000 in 50 years.

John Longwaite will receive $100,000 in 50 years. His friends are very jealous of him. If the funds are discounted back at a rate of 14 percent, what is the present value of his future “pot of gold”?...

Q: The Denver Corporation has forecast the following sales for the first seven

The Denver Corporation has forecast the following sales for the first seven months of the year: Monthly material purchases are set equal to 30 percent of forecasted sales for the next month. Of the t...

Q: Sherwin Williams will receive $18,000 a year for the

Sherwin Williams will receive $18,000 a year for the next 25 years as a result of a picture he has painted. If a discount rate of 10 percent is applied, should he be willing to sell out his future rig...

Q: General Mills will receive $27,500 per year for the

General Mills will receive $27,500 per year for the next 10 years as a payment for a weapon he invented. If a 12 percent rate is applied, should he be willing to sell out his future rights now for $16...

Q: The Western Sweepstakes has just informed you that you have won $

The Western Sweepstakes has just informed you that you have won $1 million. The amount is to be paid out at the rate of $50,000 a year for the next 20 years. With a discount rate of 12 percent, what i...

Q: Rita Gonzales won the $60 million lottery. She is to

Rita Gonzales won the $60 million lottery. She is to receive $1 million a year for the next 50 years plus an additional lump sum payment of $10 million after 50 years. The discount rate is 10 percent....

Q: Bruce Sutter invests $2,000 in a mint condition Nolan

Bruce Sutter invests $2,000 in a mint condition Nolan Ryan baseball card. He expects the card to increase in value 20 percent a year for the next five years. After that, he anticipates a 15 percent an...