What is the present value of this cash flow stream

1. Edwards has invested in a fund that will provide him a cash flow of $35,700 for the next 15 years. If his opportunity cost is 9 ½ percent, what is the present value of this cash flow stream? (Round to the nearest dollar.)

2. You are a manager in a manufacturing facility. You want to purchase equipment to expand your business. You can pay for it in installments of $70,000 per year for 6 years or up front for $200,000. Determine how you should pay for the equipment if a discount rate of 6 percent is applied.

3. Assume that, when you are 23, your new employer sponsors a matching 401(k) plan. Suppose you elect to defer 10% of your bi-weekly salary into your 401(k) which translates to $150, and that your employer will match your contributions. Assume an interest rate of 9% for this calculation. If you continue to fund your 401(k) bi-weekly at this exact same amount until you reach the age of 65, how much will your portfolio be valued at when you retire?

4. Your parents want to have 2 million dollars at retirement, which is 15 years away. They already have $300,000 in an IRA earning 7 percent annually. How much do they need to save each month, beginning at the end of this month to reach their target? Assume they could continue earning an average of 7 percent on all of their investment activity. (Round to the nearest dollar.)

5. Assume you’re 35 years old and just starting to participate in a 401(k) plan. Suppose your employer will match your contributions. If you assume an interest rate of 9% compounded monthly on level cash flows and you want to have $2.75 million accumulated in your 401(k) portfolio by the time you’re 65, how much will your personal monthly deferral amounts need to be?

6. A wealthy individual wants to set up a scholarship at his alma mater. He is willing to invest $600,000 in an account earning 5 percent. What will be the annual scholarship that can be given from this investment? (Round to the nearest dollar.)

7. Assume you are 25 and work for a company that sponsors a 401(k) plan; the company will match your contributions. Also assume you have an IRA with a balance of $20,000 currently. The IRS will allow you to take your IRA portfolio and ‘roll it’ into your 401(k) without penalty; assume you do this. If you elect to defer $450 of your salary per month into the 401(k), and your portfolio earns an average of 8% annually until you reach age 65, how much will you have in your 401(k) portfolio?

8. You need a new car and have budgeted up to $350 per month for your car payment. Assuming an interest rate of 6.5% on a 60-month car loan, what is the approximate sticker price you can afford? Set up a loan amortization schedule to prove out your answer.

9. If you plan to start saving for retirement early by investing $10,000 at the end of each year for the next 45 years in a fund that will earn a return of 9 percent, how much will you have at the end of 45 years? (Round to the nearest dollar.)

10. A company is expecting sustained growth for the next 15 years due to a patent it has successfully defended. Next year the company is expected to bring in net cash flows of $350,000. The company expects its earnings to grow annually at a rate of 15% for the next 5 years and then by 7.5% for the remainder of the 15 year horizon. What is the present value of the patent – this growing annuity – if the company uses a discount rate of 12 percent on its investments? (Round to the nearest dollar.)

11. You want to buy a condo and will take out a mortgage to do so; you expect to put down 5% (plus closing costs) and finance the rest. If the sell price is $135,000 and you enter into a 20-year, 3.75% mortgage with monthly payments, how much will your monthly payments be? Use an amortization schedule to prove that your calculation is correct, also calculate total interest paid during the life of the loan.

12. Put together your own personal retirement plan: Determine how much you think you’ll need when you retire, how much you have currently and how much you’ll need to save each year to achieve your goal. You can assume a constant contribution payment for your entire life, or you can assume incremental increases periodically.

TVM Comprehensive Assignment – C. Smith Page 1

Are you looking for a similar paper or any other quality academic essay? Then look no further. Our research paper writing service is what you require. Our team of experienced writers is on standby to deliver to you an original paper as per your specified instructions with zero plagiarism guaranteed. This is the perfect way you can prepare your own unique academic paper and score the grades you deserve.

Use the order calculator below and get ordering with idealtermpapers.com now! Contact our live support team for any assistance or inquiry.

Type of paper Academic level Subject area
Number of pages Paper urgency Cost per page:
 Total:

Purchase Guarantee

Why ORDER at IdealTermPapers.com?

  • Educated and experienced writers.
  • Quality, Professionalism and experience.
  • Original Content writing.
  • Best customer support.
  • Affordable Pricing on orders.
  • Thorough research.
  • Ontime delivery of finished work.
  • 100% plagiarism free papers.

Reasonable Prices

  • To get the best quality papers isn’t cheap so don’t trust extremely low prices.
  • We can’t claim that we have unreasonably low prices because low prices equal to low quality.
  • Our prices are good and they balance with the quality of our work.
  • We have a Moneyback guarantee.

Original and Quality work

  • Our writers are professionals and they write your paper from scratch and we don’t encourage copy pasting.
  • All writers are assessed and they have to pass our standards for them to work with us.
  • Plagiarism is an offence and it’s never tolerated in our company.

Native Writers plus Researchers

  • Our writers are qualified and excellent and will guarantee the best performance in your order.
  • Our team has writers who have master's and PhD qualifications who can handle any assignment
  • We have the best standards in essay writing.

We have been in business for over 7 syears

  • We have always served our customers from all over the world and they have continued to order with us.
  • We value our customers since they have trusted us to do their assignments.
  • We are competent in our writing gained from experience over the years
  • Our company has 24/7 Live Support.

You will get

  •  Custom Admission Essay written by competent professional English writers.
  •  Free revisions according to our revision policy if required
  •  Paper format:  275 words per page, Times New Roman font and size 12, doublespaced text and1 inch margin
  •  On time delivery and direct order download
  •  Privacy guaranteed

We can help you:

  •  acquire a comprehensive professional presentation.
  •  get a unique and remarkable content as per your instructions.
  •  Get an additional portion that can be included to your existing presentation;
  •  turn your work in to an eyecatching presentation with well communicated ideas.
  •  improve your presentation to acquire the best professional standards.