A 60-year old person buys a 25-year term annuity in arrears contract for a single upfront premium of $1,000,000. Interest earnt by the insurance company is assumed to be 5% over the first 10 years of the contract and then 4% for the remaining term. The amount paid in the first 10 years is two-thirds of the amount paid in the remaining 15 years. Find out the amount paid in year 1 of the contract.

Assume that select mortality applies and there is an annual fee of $20 which is paid at the time of the annuity payment

Q5. The information below provides details of an off-exchange tailor-made loan obtained by Royal Oceania Cruises to fund their operations.

• Today is June 30 2019, which is the initiation date of the loan.
• The Commonwealth Bank is loaning money to Royal Oceania Cruises.
• The amount borrowed is $50 million.
• The maturity date of the loan is three years.
• A minimum interest payment of $1 million is due in each financial year. The financial year ends on 30 June each year.
• The nominal interest rate associated with this loan is the Reserve Bank of Australia cash rate (as at June 30 2019 {1.25%}) plus a margin of 3.75%. This interest rate is compounded monthly and is fixed from the initiation date.
• Assume the following payments are made by Royal Oceania Cruises during the term of the loan:
• Monthly repayments of $2 million at the end of each month beginning on January 31 2020 until April 30 2021 (inclusive).
• May 31 2021: a single payment of $2 million.
• April 30 2022: a single payment of $10 million.
• Given such payments, your job is to determine the outstanding value of the loan on the maturity date.

Integrative—Complete investment decision   

Wells Printing is considering the purchase of a new printing press. The total installed cost of the press is $2.11 million. This outlay would be partially offset by the sale of an existing press. The old press has zero book​ value, cost $1.02 million 10 years​ ago, and can be sold currently for $1.28 million before taxes. As a result of acquisition of the new​ press, sales in each of the next 5 years are expected to be $1.57 million higher than with the existing​ press, but product costs​ (excluding depreciation) will represent 46% of sales. The new press will not affect the​ firm's net working capital requirements. The new press will be depreciated under MACR

using a​ 5-year recovery period. The firm is subject to a 40% tax rate. Wells​ Printing's cost of capital is 11.1%.​(Note: Assume that the old and the new presses will each have a terminal value of $0 at the end of year​ 6.)

a. Determine the initial investment required by the new press.

b. Determine the operating cash flows attributable to the new press.​ (Note: Be sure to consider the depreciation in year​ 6.)

c. Determine the payback period.

d. Determine the net present value​ (NPV) and the internal rate of return​ (IRR) related to the proposed new press.

e. Make a recommendation to accept or reject the new​ press, and justify your answer.

Use the following information for part a and b. The 1-year, 2-year, 3-year and 4-year zero rates are 2%, 3%, 4% and 5% per annum (APR) with quarterly compounding/payment.

A)What are the zero coupon bond prices with maturities of 1 year, 2 years, 3 years and 4 years? (Assume that you receive a face value of $100 for each of these bonds on their maturity dates).

B)What are the corresponding per annum zero rates with continuous compounding?

Please show work and do not just post picture of excel.

You’ve collected the following information about Erna, Inc.:

What is the sustainable growth rate for the company? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
  
Sustainable growth rate             %
  
Assuming it grows at this rate, how much new borrowing will take place in the coming year, assuming a constant debt–equity ratio? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.)
  
Additional borrowing            $
  
What growth rate could be supported with no outside financing at all? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.)
  

Your father is 50 years old and will retire in 10 years. He expects to live for 25 years after he retires, until he is 85. He wants a fixed retirement income that has the same purchasing power at the time he retires as $40,000 has today. (The real value of his retirement income will decline annually after he retires.) His retirement income will begin the day he retires, 10 years from today, at which time he will receive 24 additional annual payments. Annual inflation is expected to be 6%. He currently has $95,000 saved, and he expects to earn 8% annually on his savings. How much must he save during each of the next 10 years (end-of-year deposits) to meet his retirement goal? Do not round intermediate calculations. Round your answer to the nearest cent.

Celtic Inc is considering expanding their existing vegetable processing operations with a new plant in Ireland. The plant is expected to produce 8,472,000 pounds of processed vegetables each year for the next 15 years (1,000 pounds per hour, 24 hours per day, 353 days per year). The land for the plant will cost approximately $500,000. Construction of the physical plant building will cost approximately $18,500,000, and the required investment in equipment will be an additional $22,500,000. The initial investment in net working capital required to have the plant operating at full capacity will include $2,500,000 in cash, $1,800,000 in receivables, and $650,000 in inventory, which will be partially funded by $250,000 of supplier financing.

The vegetables processed in Ireland will sell in year = 1 for $2.25 per pound. This selling price per pound is expected to increase by 0.50% per year throughout the life of the project. Operating expense has two components: 1) a fixed component, and 2) a variable component. The fixed overhead expenses will equal $4,254,000 the first year. These fixed operating expenses will increase each year by 1.00% throughout the life of the project. The variable operating expenses are equal to $0.75 per pound produced. These variable operating expenses are expected to increase by 0.50% per pound per year (for example, year 1 variable operating expenses are $0.75 per pound, and year 2 variable operating expenses are expected to be $0.75 × 1.005 = $0.75375 per pound). The plant building will be depreciated straight-line over 15 years to a value of zero. The equipment within the plant will be depreciated MACRS according to the 7-year schedule (percentages provided within the spreadsheet template). For analysis purposes, the firm uses 28.5% for their marginal tax rate for operating income. They assume a tax rate of 15.0% for capital gains. They use a discount rate of 12.0% for capital budgeting purposes.

Assume that the Ireland plant can be sold at the end of the life of the project. Assume that the land portion of this sale will reflect an annual growth rate in the land value of 1.5%. Assume that the building portion of this sale will reflect an annual growth rate in the building value of -10.0% (negative ten percent per year). Assume that the equipment portion of this sale will be $50,000. Assume that the entire initial investment in net working capital is recaptured at the end of the project.

I need assistance calculating NWC, NINV and NPV!!

How much would you have to invest today to receive the following? Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.

  
a. $12,250 in 6 years at 10 percent. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
  

b. $16,000 in 14 years at 12 percent. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
  

c. $6,000 each year for 13 years at 9 percent. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
  

d. $42,000 each year for 25 years at 6 percent. (Do not round intermediate calculations. Round your final answer to 2 decimal places.)
  

Indicate whether each of the following items increases or decreases cash flow.

Decrease in accrued expenses

Dividend payment

Decrease in inventory

Increase in prepaid expenses

Increase in accounts payable

Decrease in investments

Depreciation expense

Decrease in notes payable

Decrease in accounts receivable

Increase in notes receivable

Increase in bonds payable

Increase in Plant and equipment (gross)

Increase in common stock

Increase in preferred stock

Decrease in income tax payable

A firm has net sales of $5,500,000, Cost of Goods Sold $3,500,000, Depreciation Expense
of $300,000, Selling and Administrative Expenses of $500,000, Interest Expense of $200,000, and an average tax rate of 20%.

25. The firm's Net Income is:

• a. 210,000
• b. 400,000
• c. 
700,000
• d 
800,000

26. The firm's Operating Margin is:

a. 14.0%

b. 21.8%

c. 33.3%


d. 
67.1%

27. firm's Gross Profit Margin is:

a. 21.5%

b. 30.0%

c. 
36.4%

d 
50.0%

28. firm's Pre-taxable Income is:

• a. 1, 200,000
• b. 1,000,000
• c. 800,000
• d. 500,000

1. Bankers trust has bonds maturing in 27 yrs. the total principal that must be repaid by the bank at that time is $950 million. The relevant discount rate is 7.5% per yr. what is the present value of this liability assuming quarterly compounding?

2. Comparing two annuities which offer monthly payments of $1,750 for 10 yrs and pay interest at an annual rate of 4.5%. Annuity A will pay you on the 1st day of each month while B will pay on the last day of each month. Which one of the following statements is correct?

A. Annuity b is an annuity due

b. Annuity b has smaller future value than A

c. Both have different present values as of today and equal future values at the end of year 10.

D. Both have equal present values but unequal futures values at the end of yr 10

analyze the financial impact of johnson and johnson settlement on the stock price. As an analyst, how would you QUANTITATIVELY measure the impact of this settlement on the stock price?

• mutual funds and choose a fund in which you might like to invest.
• Identify this fund and explain why you are interested.
• Be sure to address such issues as past returns, expected future returns, the amount of fees and expenses, and why its investment objectives are attractive to you.