When analyzing key macroeconomics to assess GDP growth/decline, how would you measure the performance relative to sequential and year-to-year data?

Jan sold her house on December 31 and took a $30,000 mortgage as part of the payment. The 10-year mortgage has a 6% nominal interest rate, but it calls for semiannual payments beginning next June 30. Next year Jan must report on Schedule B of her IRS Form 1040 the amount of interest that was included in the two payments she received during the year.

a. What is the dollar amount of each payment Jan receives? Round your answer to the nearest cent.

$  

b. How much interest was included in the first payment? Round your answer to the nearest cent.

$  

How much repayment of principal was included? Do not round intermediate calculations. Round your answer to the nearest cent.

$  

How do these values change for the second payment?

1. The portion of the payment that is applied to interest declines, while the portion of the payment that is applied to principal increases.
2. The portion of the payment that is applied to interest increases, while the portion of the payment that is applied to principal decreases.
3. The portion of the payment that is applied to interest and the portion of the payment that is applied to principal remains the same throughout the life of the loan.
4. The portion of the payment that is applied to interest declines, while the portion of the payment that is applied to principal also declines.
5. The portion of the payment that is applied to interest increases, while the portion of the payment that is applied to principal also increases.

-Pick one I-V

c. How much interest must Jan report on Schedule B for the first year? Do not round intermediate calculations. Round your answer to the nearest cent.

$  

Will her interest income be the same next year?
Pick one

Her interest income will increase in each successive year.

Her interest income will remain the same in each successive year.

She will not receive interest income, only a return of capital.

Her interest income will decline in each successive year.

She will receive interest only when the mortgage is paid off in 10 years.

d. If the payments are constant, why does the amount of interest income change over time?

1. As the loan is amortized (paid off), the beginning balance, hence the interest charge, increases and the repayment of principal increases.
2. As the loan is amortized (paid off), the beginning balance, hence the interest charge, declines and the repayment of principal increases.
3. As the loan is amortized (paid off), the beginning balance, hence the interest charge, declines and the repayment of principal declines.
4. As the loan is amortized (paid off), the beginning balance, hence the interest charge, increases and the repayment of principal declines.
5. As the loan is amortized (paid off), the beginning balance declines, but the interest charge and the repayment of principal remain the same.

Pick one I - V

On a 30-year, fixed-rate loan with a monthly payment of $1,000 and an interest rate of 9%, what is the outstanding balance due on the loan with after the borrower has made 18 years of payments?

You just paid $800,000 to become the sole equity investor in an unlevered firm. If things go well, you will sell the firm to Google for $1,600,000 in one year. If things go poorly, you will sell the firm to Facebook for $600,000 in one year. It is equally likely that things will go well versus poorly. What is your expected return on this investment?

(only answer question below)

Assume it’s an alternate reality, and you just paid $400,000 to become the sole equity investor in the same firm described in the prior question, except the firm has a debt-to-value ratio of 50%. The interest rate on the firm’s debt is 10%, and the firm plans to retire the debt in one year (i.e. pay it in full). At that point, you will sell your equity to Google/Facebook depending on whether things went well or poorly. Assume it’s an M&M world (no taxes, frictions, etc.). What is your expected return on this investment?

a. 50.2%

b. 65.0%

c. 38.0%

d. 55.7%

Malaysian Island Resort. Theresa Nunn is planning a​ 30-day vacation on Pulau​ Penang, Malaysia, one year from now. The present charge for a luxury suite plus meals in Malaysian ringgit​ (RM) is 1,044​/day. The Malaysian ringgit presently trades at RM3.1350​/$. She determines that the dollar cost today for a​ 30-day stay would be $9,990.43. The hotel informs her that any increase in its room charges will be limited to any increase in the Malaysian cost of living. Malaysian inflation is expected to be 2.7625​% ​annum, while U.S. inflation is expected to be 1.293​%.

a. How many dollars might Theresa expect to need one year hence to pay for her​ 30-day vacation?

b. By what percent will the dollar cost have gone​ up? Why?

You have just been offered a job. Your base salary will be $90,000 per year and the first year’s annual salary will be received one year from the day you start working. You receive a bonus immediately of $12,500. Your salary will grow 4 percent per year and you will receive a bonus of 10 percent of your salary. You expect to work 30 foryears. Your discount rate is 11 percent. What is the present value of your offer?

Group of answer choices

A. $1,428,726.78

B. $1,427,488.04

C. $1,433,232.96

Telnik Corporation bonds pay $82.50 in interest, paid semi-annually with a $1,000 par value. The bonds mature in 15 years. Your required rate of return is 9 percent.

A. Calculate the value of the bond

B. Calculate the value of the bond if interest rates unexpectedly increased by 1%

C. An alternative investment offers the same coupon rate but matures in 5 years. What would be its value at a required return of 9 percent and 10 percent

D. Explain why the market would require a lower return on the alternative investment than on the alternative investment

Terri Allessandro has an opportunity to make any of the following​ investments The purchase​ price, the​ lump-sum future​ value, and the year of receipt are given below for each investment. Terri can earn a rate of return of 8% on investments similar to those currently under consideration. Evaluate each investment to determine whether it is​ satisfactory, and make an investment recommendation to Terri.

Investment   Purchase Price   Future Value   Year of Receipt
A   $22,617   $32,000   4
B   $1,700   $5,000   18
C   $2,040   $7,000   14
D   $2,216   $16,000   40

Consider the streams of income given in the following​ table:

Income Stream  
End of Year A B
1 $5,000   $2,000
2 $4,000   $3,000
3 $3,000   $4,000
4 $2,000   $5,000
Total $14,000   $14,000

a.Find the present value of each income​ stream, using a discount rate of 1%,then repeat those calculations using a discount rate of 8 %

b. Compare the calculated present values and discuss them in light of the fact that the undiscounted total income amounts to $14,000 in each case.

Suppose your firm is considering investing in a project with the cash flows shown below, that the required rate of return on projects of this risk class is 8 percent, and that the maximum allowable payback and discounted payback statistics for the project are 3.5 and 4.5 years, respectively. Time: 0 1 2 3 4 5 6 Cash flow: –$5,000 $1,200 $2,400 $1,600 $1,600 $1,400 $1,200 Use the NPV decision rule to evaluate this project

- explain why we say that "Compounding" is a key component of growing money?

- explain Net Worth and then define it.

New Orleans Shipping. If the share price of​ Emaline, a New​ Orleans-based shipping​ firm, rises from $12.13 to $15.96 over a​ one-year period, calculate the rate of return to the shareholder given each of the​ following:

a. The company paid no dividends.

b. The company paid a dividend of $1.01 per share.

c. The company paid the dividend and the total return to the shareholder is separated into the dividend yield and the capital gain.

Consider the following​ bonds:

a. What is the percentage change in the price of each bond if its yield to maturity falls from 7​% to 6​%?

b. Which of the bonds A−D is most sensitive to a​ 1% drop in interest rates from 7​% to 6​% and​ why? Which bond is least​ sensitive? Provide an intuitive explanation for your answer.

Note​: Assume annual compounding.

The local government is running a flu vaccination program. Are the following costs fixed, variable, or step costs?(

a) Costs of occupancy

(b) Costs of management

(c) Costs of part-time employee salaries based on service volume

(d) Costs of vaccine consumed

2. Clifftown’s Parks and Recreation Department is introducing a new summer program for children in elementary school. Programming runs from 8:00 a.m. to 5:00 p.m., Monday through Friday. The proposed camp is 10 weeks long and is planned for 50 children. Fixed costs, which include equipment and facilities costs, are estimated at $5,000 for 10 weeks. The facilities and equipment can accommodate up to 100 children per week, which is the maximum the depart-ment is willing to enroll in any given session. There will be 5 camp counselors each week for the 50 children, at a total cost of $2,000 per week for the 5 counselors. The department is comfort-able with each counselor being responsible for 11 children. Any more than that and an additional counselor will need to be hired. The camp will serve lunch and snacks on each weekday, at a weekly cost of $15.

(a) Identify the fixed, step, and variable costs.

(b) What would be the cost of the program for 50 children?

(c) What would be the cost of the program for 75 children?

3. Desert Vista Homeless Campus provides shelter and breakfast to individuals in need. Local governments and several nonprofit organizations provide financial assistance to the shelter and require weekly reporting. Desert Vista’s current facility can hold a maximum of 300 people. The base weekly cost to run the shelter is $1,500. The shelter also needs 3 cooks per 75 residents to prepare a sufficient amount of food for breakfast. Cooks are paid a flat fee of $50 for each meal prepared. Breakfast costs an average of $2 per meal to prepare, excluding staff costs.

(a) Identify the fixed, step, and variable costs.

(b) What is the cost incurred by the campus for 150 people over a 1-week period?

(c) What is the cost incurred by the campus for 200 people over a 1-week period?