"Party Sea" is considering a new business idea: buying and then renting out sailing catamarans to rich customers. The company estimates that it will cost $32,000,000 to buy brand-new sailing catamarans. The estimated operating cash flow will equal $4,000,000 per year. At the end of Year 3 this catamaran project will be over, at which time all used catamarans will be sold at the after-tax salvage value of $10,000,000. The company also plans to immediately set aside $58,000 in cash which will be increased by $5,000 each year and recovered at the end of the project. Calculate the Net Present Value of the project if the appropriate discount rate is 11%. Increase decimal places for any intermediate calculations, from the default 2 to 6 or higher. Only round your final answer to whole dollar.

You are considering three investments. The first is a bond that is selling in the market at $1,200. The bond has a $1,000 par value, pays interest semi-annually at 10%, and is scheduled to mature in 10 years. For bonds of this risk class you believe that a 12% rate of return should be required. The second investment that you are analysing is a preference share ($100 par value) that sells for $95 and pays an annual dividend of $10. Your required rate of return for this share is 10%. The last investment is an ordinary share ($35 par value) that recently paid

a $5 dividend. The firm's earnings per share have increased from $4 to $8 in 10 years, which also reflects the expected growth in dividends per share for the indefinite future. The share is selling for $40, and you think a reasonable required rate of return for the share is 20%.

Required:

1. Calculate the value of each security based on your required rate of return.
2. Calculate the expected return of each security.

Network Streaming Systems (NSS) Ltd is a video production company and currently rents the building in which its production equipment is located at an annual cost of £150,000, including all service charges. The company is considering purchasing an alternative building in which to undertake its video business. These alternative premises are due to be demolished by the local council in 4 years’ time to make way for a new road. It is known that the Council will purchase the building at that time at its book value of £100,000. Because of the instability caused by the Council’s plans, NSS can purchase the building at a knock-down price of £250,000. Otherwise, since the building is located in a prime residential area, the land on which the building stands would be worth £1.8 million. Currently the building is in a state of disrepair, but a structural survey which has already been undertaken by NSS costing £3,000, recommends that the building must be upgraded at a cost of £50,000 before NSS moves in. The annual heating and lighting expenses on the new building will be £40,000, but NSS will save the annual rents on its current premises. The removal costs of moving its equipment into the new building, and the cost of moving out again in four years’ time will be £25,000 on each occasion. NSS pays corporation tax on its profits at 30%, and the tax authorities allow NSS to offset its corporate tax liabilities by using straight line depreciation on its fixed assets. You may assume that NSS has sufficient taxable profits to take full advantage of any tax shields from purchasing the building. NSS applies an opportunity cost of capital of 10 per cent to all future cash flows. Assume all annual cashflows occur at the end of the year to which they relate.

(a) Determine the free cash flow in each year from the investment in the new building, explaining your treatment of costs and depreciation allowances.

(b) What is the project NPV?

(c) NSS approaches you for advice on whether it should purchase the new building, and asks for your opinion on payback, IRR, and accounting rate of return as methods of investment appraisal. Advise NSS by comparing and contrasting the four alternative investment criteria.

(d) Suppose that there is a small probability that the Council might change its decision to build a road, allowing the owner to sell the land for residential development. Outline how this would change your valuation of the project.

Your Aunt Ruth has $340,000 invested at 7%, and she plans to retire. She wants to withdraw $40,000 at the beginning of each year, starting immediately. How many years will it take to exhaust her funds, i.e., run the account down to zero?

15

13

12

16

14

Is there a formula to quickly calculate amortized interest? I know how to do it for each individual payment period (interest= [principle amount]x[interest rate]) and subtracting the amount of the payment that goes towards the principle, and doing it over and over again. However, this process takes too long once you get more payment periods. I am trying to answer the following question:

Q: You have paid for 20 years of your 30 year mortgage and make monthly payments of $2,545. Assuming the APR on the loan is 6.6% per year, compounded monthly, a) how much would you need today to pay off the remaining balance on the mortgage? Based on this information, b) what was the amount of the original mortgage?

So far, I have calculated the original mortgage to be $398,491.33 (is this right? I used the present value of an annuity formula- not sure if this is correct process). I am struggling with part a.

Gary borrows 150,000 with interest at 15% compounded quarterly. How many 9,500 quarterly payments are required?

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Reflect on your learning about Quantitative and Qualitative research; share two ways that helped you understand how they are different. Chose one category of study design that you found interesting and describe; include how you believe it can help study nursing problems. Refer back to your article you located for your Week 3 Assignment and answer the following: (*if you were unsuccessful with your article search, search the library again for an article) Locate and describe the type of research and the study design. Explain how the design supported the purpose/intent of the study.

article:

Baker, N., Taggart, H., Nivens, A. & Tillman, P. (2015). Delirium: Why are nurses confused? MedSurg Nursing, 24(1), 15-22. permalink (Links to an external site.)