Questions from General Finance

Q: You are offered $1,000 today, $10,

You are offered $1,000 today, $10,000 in 12 years, or $25,000 in 25 years. Assuming that you can earn 11 percent on your money, which offer should you choose?

Q: Why would a preferred stockholder want the stock to have a cumulative

Why would a preferred stockholder want the stock to have a cumulative dividend feature and protective provisions?

Q: You are given three investment alternatives to analyze. The cash flows

You are given three investment alternatives to analyze. The cash flows from these three investments are as follows: Assuming a 20 percent discount rate, find the present value of each investment....

Q: The Kumar Corporation is planning on issuing bonds that pay no interest

The Kumar Corporation is planning on issuing bonds that pay no interest but can be converted into $1,000 at maturity, 7 years from their purchase. To price these bonds competitively with other bonds o...

Q: Bart Simpson, age 10, wants to be able to buy

Bart Simpson, age 10, wants to be able to buy a really cool new car when he turns 16. His really cool car costs $15,000 today, and its cost is expected to increase 3 percent annually. Bart wants to ma...

Q: How much do you have to deposit today so that beginning 11

How much do you have to deposit today so that beginning 11 years from now you can withdraw $10,000 a year for the next 5 years (periods 11 through 15) plus an additional amount of $20,000 in that last...

Q: You would like to have $50,000 in 15 years

You would like to have $50,000 in 15 years. To accumulate this amount you plan to deposit each year an equal sum in the bank, which will earn 7 percent interest compounded annually. Your first payment...

Q: You are trying to plan for retirement in 10 years, and

You are trying to plan for retirement in 10 years, and currently you have $100,000 in a savings account and $300,000 in stocks. In addition, you plan on adding to your savings by depositing $10,000 pe...

Q: The state lottery’s million-dollar payout provides for $1 million

The state lottery’s million-dollar payout provides for $1 million to be paid over 19 years in 20 payments of $50,000. The first $50,000 payment is made immediately, and the 19 remaining $50,000 paymen...

Q: Upon graduating from college 35 years ago, Dr. Nick Riviera

Upon graduating from college 35 years ago, Dr. Nick Riviera was already thinking of retirement. Since then, he has made deposits into his retirement fund on a quarterly basis in the amount of $300. Ni...