1. Today, Ralph and Sara each have $500,000 in an investment account. No other contributions will be made to their investment accounts. Both have the same goal: They each want their account to reach $1.5 million, at which time each will retire. Ralph has his money invested in risk-free securities with an expected annual return of 4 percent. Sara has her money invested in a stock fund with an expected annual return of 11 percent. How many years after Sara retires will Ralph retire? Pick the closest answer.

   	a	16.24
   	b	19.0
   	c	10.53
   	d	17.48
   	e	28.01

1. Suppose you buy 200 shares of stock ABC at $50 per share and sell it in a year. The initial margin is 40%. The call money rate is 7%. One year later, stock price decreases 20% to $40. What's the rate of return of buying on margin?

   	A.	-57.5%
   	B.	-60.5%
   	C.	-62.5%
   	D.	-70%

An interest rate swap has three years of remaining life. Payments are exchanged annually. Interest at 3.2% is paid and 12-month LIBOR is received. An exchange of payments has just taken place. The one-year, two-year and three-year LIBOR/swap zero rates are 1.5%, 2.5 and 3.75%. All rates an annually compounded. What is the value of the swap as a percentage of the principal when OIS and LIBOR rates are the same? (Assume Principal =$100)

Ann is looking for a fully amortizing 30-year Fixed Rate Mortgage with monthly payments for $3,200,000. Mortgage A has a 4.38% interest rate and requires Ann to pay 1.5 points upfront. Mortgage B has a 6% interest rate and requires Ann to pay zero fees upfront. Assuming Ann makes payments for 30 years, what is Ann’s annualized IRR from mortgage A?

XYZ Corp recently reported $8,000 of sales, $5,750 of operating costs other than depreciation, and $700 of depreciation. The company had no amortization charges, it had $3,000 of outstanding bonds that carry a 6% interest rate, and its federal-plus-state income tax rate was 30%. In order to sustain its operations and thus generate sales and cash flows in the future, the firm was required to make $1,250 of capital expenditures on new fixed assets and to invest $300 in net operating working capital. By how much did the firm's net income exceed its free cash flow?

Show your answer in this format: $123.45

1. The population of a state has grown at an annual rate of 2.8% over the past 5 years. If the current number of inhabitants is 3,825,000, what will be its population in 5, 10 and 20 years considering:
a) that the population growth rate does not change?
b) that the population grows to 2.8% the first 5 years, 2.5% the next 5 years and 2.0% the last years?

ANSWER

a) 5 years: 4 391 339; 10 years: 5,041,533; 20 years: 6 644 981

b) 5 years: 4 391 339; 10 years: 4 968 397; 20 years: 6 056 448

2. The annual income per inhabitant in the previous state is $ 5,000. What will be your annual income in 5, 10, 15 and 20 years if GDP is considered to grow at an average annual rate of 3.5%, and the population grows to 2.8%?

Please step by step.

Thank you !

A five-year bond with a yield of 7% (continuously compounded) pays a 5.5% coupon at the end of each year.

1. What is the bond’s price?
2. What is the bond’s duration?
3. Use the duration to calculate the effect on the bond’s price of a 0.3% decrease in its yield.
4. Recalculate the bond’s price on the basis of a 6.7% per annum yield and verify that the result is in agreement with your answer to (c).

Ann is looking for a fully amortizing 30 year Fixed Rate Mortgage with monthly payments for $3,200,000. Mortgage A has a 4.38% interest rate and requires Ann to pay 1.5 points upfront. Mortgage B has a 6% interest rate and requires Ann to pay zero fees upfront. Assuming Ann makes payments for 2 years before she sells the house and pays the bank the balance, what is Ann’s annualized IRR from mortgage A?

Two infrastructure project alternatives are available to transport water from a reservoir to town

– Option A involves building a 10-mile long gravity pipeline

– Option B involves building an 8-mile long pipeline and a pumping station

• Given an MARR of 7%, which option is more economic in 10, 20, and 30 years?

Initial pipeline cost: option A $2.8 million, option B $1.5 million.

Pumping Station cost: option A $0, option B $500,000.  

Annual operation and maintenance cost: option A $30,000, option B $60,000.

Annual power costs during first 10 years: option A $0, option B $40000.

Annual power costs after 10 years: option A $0, option B $120000.

​(Compound interest with​ non-annual periods)  Calculate the amount of money that will be in each of the following accounts at the end of the given deposit​ period: Account Holder Amount Deposited Annual Interest Rate Compounding Periods Per Year​ (M) Compounding Periods​ (Years) Theodore Logan III ​$ 1 comma 000 18 ​% 4 10 Vernell Coles 96 comma 000 8 2 3 Tina Elliot 9 comma 000 10 3 4 Wayne Robinson 119 comma 000 10 12 5 Eunice Chung 30 comma 000 16 1 4 Kelly Cravens 13 comma 000 8 6 3 a.  The amount of money in Theodore Logan​ III's account at the end of 10 years will be ​$ nothing. ​(Round to the nearest​ cent.)

The Duo Growth Company just paid a dividend of $1.00 per share. The dividend is expected to grow at a rate of 21% per year for the next three years and then to level off to 5% per year forever. You think the appropriate market capitalization rate is 16% per year.

a. What is your estimate of the intrinsic value of a share of the stock?

b. b. If the market price of a share is equal to this intrinsic value, what is the expected dividend yield?

Maris​ Brothers, Inc., needs a cash disbursement schedule for the months of​ April, May, and June. Use the format given here LOADING... and the following information in its preparation. ​Sales: February $ 514 comma 000 $514,000​; March $ 514 comma 000 $514,000​; April $ 555 comma 000 $555,000​; May $ 595 comma 000 $595,000​; June $ 648 comma 000 $648,000​; July $ 655 comma 000 $655,000 ​Purchases: Purchases are calculated as 57 % 57% of the next​ month's sales, 9 % 9% of purchases are made in​ cash, 45 % 45% of purchases are paid for 1 month after​ purchase, and the remaining 46 % 46% of purchases are paid for 2 months after purchase. ​Rent: The firm pays rent of $ 8 comma 010 $8,010 per month. Wages and​ salaries: Base wage and salary costs are fixed at $ 5 comma 800 $5,800 per month plus a variable cost of 6.7 % 6.7% of the current​ month's sales. ​Taxes: A tax payment of $ 54 comma 700 $54,700 is due in June. Fixed asset​ outlays: New equipment costing $ 75 comma 300 $75,300 will be bought and paid for in April. Interest​ payments: An interest payment of $ 30 comma 500 $30,500 is due in June. Cash​ dividends: Dividends of $ 12 comma 400 $12,400 will be paid in April. Principal repayments and​ retirements: No principal repayments or retirements are due during these months.

Complete the cash disbursements schedule for Maris​ Brothers, Inc.​ below: ​ (Round to the nearest​ dollar.)

(Future value)  You are hoping to buy a house in the future and recently received an inheritance of ​$22 comma 000. You intend to use your inheritance as a down payment on your house. a.  If you put your inheritance in an account that earns 9 percent interest compounded​ annually, how many years will it be before your inheritance grows to ​$32 comma 000​? b.  If you let your money grow for 10 years at 9 percent​, how much will you​ have? c.  How long will it take your money to grow to ​$32 comma 000 if you move it into an account that pays 5 percent compounded​ annually? How long will it take your money to grow to ​$32 comma 000 if you move it into an account that pays 13 percent​? d.  What does all this tell you about the relationship among interest​ rates, time, and future​ sums? a.  If you put your inheritance in an account that earns 9 percent interest compounded​ annually, how many years will it be before your inheritance grows to ​$32 comma 000​? nothing years ​ (Round to one decimal​ place.)