Problem 1: You save $5,000 dollars in year 1. $5,150 dollars in year 2. If the amounts increase 3% a year through year 20, how much money will you have at the end of year 20 at 10% interest?

Problem 2: A smart engineer wants to save now and play later. She wants to retire in 20 years with $1.5 million dollars of play money. At 10% per year interest, to reach the $1.5 million goal, starting 1 year from now, she must invest how much money annually?

Problem 3: You receive a gift of $25,000 dollars and have come up with three options on how to spend the money. 1) Buy a new car even though you do not need it. 2) Invest the money in a company stock option that has an expected value increase at 20% a year. However, this option is fairly risky. 3) You can put the money a saving account at 6% year. If you decide to buy the new car, what is the opportunity cost with the choice? If you invest the money in the stock, what is the opportunity cost? What is an opportunity cost?

Problem 4: You have been invited to go Oktoberfest. You buy a passport for $100 dollars and it is valid for 10 years. The next day, the trip gets cancelled. Is your passport a suck cost or an opportunity cost? What is a suck cost?

Problem 5: A new engineer graduate plans to buy a business for $100,000 dollars at 10% interest per year. The loan payment each year to pay off the loan in 7 years is what amount?
  

On January 1, Year One, Landon Corporation decides to lease a truck for $20,000 per year for three years. The annual incremental borrowing rate for Landon is 10 percent. The truck has a life of five years. Landon cannot buy or obtain title to the truck. The present value of an annuity due of $1 for three years at an annual interest rate of 10 percent is $2.73554. At the last moment, Landon changes the contract to four years instead of three. No other changes are made. The present value of an annuity due of $1 for four years at an annual interest rate of 10 percent is $3.48685.

a. How did the change from three years to four years affect the expense to be reported by Landon

in Year One?

b. How did the change from three years to four years affect the expense to be reported by Landon

in Year Two?

c. After changing the contract to four years, what net book value will be shown for the leased truck

at the end of Year One?

d. After changing the contract to four years, what lease liability balance will be shown at the end of

Year One?

An analyst has the following projected free cash flows for an investment: Year 1: $125,050; Year 2: $137,650; Year 3 to15: $150,000 a year; Year 16 to 20: $200,000 a year.

The investment is expected to have a terminal value of $500,000 at the end of Year 20.

If the analyst has estimated a present value of $3 millions for the investment, what is the discount rate that she/he has used in calculations.

A. % 1.37

B. % 1.78

C. % 2.12

D. % 3.25

Erin is a 19-year-old university student in her second year at university. Erin is bright and has always been a high achiever at school, and her parents have been keen to prompt her to follow her dreams and encourage her pursuits. Erin loves cooking for her family, particularly her older brother Josh. In order to achieve the best possible Year 12 score, Erin’s parents decided to move her to a private school for girls that had a good reputation for university acceptance. Erin’s mother took on extra work to pay for the school fees. While Erin was sad to leave her old school and friends, she agreed that this was the best choice for her academically. Things did not go as well as planned, however, and Erin was subjected to distressing bullying from the beginning of Year 12 until she finished the school year. Erin has always been conscious of her health and weight but was targeted because she had ‘fat legs’

and the bullies sent her text messages of ‘fat people’ and memes with derogatory messages about her. Because her parents had made sacrifices for her to attend this school, Erin didn’t want to tell them that she was being bullied, so she kept it to herself. This bullying had a devastating impact on Erin’s self-esteem, and she began dieting. People would comment on how great she looked, so she continued dieting. She felt she had some control over what she ate, and this made her feel better. When her local gym had a special rate for new members, Erin joined. When she wasn’t at the gym, she was studying. Because she was working out so much, and restricting her diet, Erin became seriously constipated. So, she went to her local pharmacy and began buying laxatives. Erin noticed that they helped with her constipation, but they also reduced her weight (Erin would weigh herself daily), so she began taking them all the time. It got to the point where her local pharmacy would not sell them to her anymore, so she began buying them from multiple pharmacies and online. Despite the turmoil at school, Erin did well academically and achieved exceptionally high marks in her final exams. She got her first preference for courses and enrolled in a Bachelor of Dietetics at a well-regarded university. Recently, however, wearing baggy clothing and restricting her food intake has been causing suspicions. Her mother has told her she is too thin, and her brother and father have expressed concern about her –but Erin doesn’t see it this way. When Erin looks in the mirror, she sees the fat girl who was bullied in Year 12. Erin has collapsed at her gym several times, and staff have expressed concern about her weight. Erin worried that as with the pharmacy, she will need to find another gym. At 1.62 cm tall and weighing 41 kg, Erin’s BMI is 15.6.

1. What are some of the physical risksassociated with Erin’s behaviours?
2. Erin is exhibiting many different behaviours consistent with ED. Describe what these are;
3. EDs can be upsetting for family and friends of the consumer, and family members who are concerned about their loved one are almost always correct in their ED concerns. What are the impacts on the familyare common when a member has an ED;
4. Investigate longer term issues that may impact recoveryfrom an Eating Disorder.
5. Develop three questionsyou would ask Erin during an interview to complete an MSE. They could be from any MSE area.
6. Complete a risk assessment;
7. Develop a nursing care plan.

What's the future value of a 3%, 5-year ordinary annuity that pays $200 each year? If this was an annuity due, what would its future value be? Do not round intermediate calculations. Round your answers to the nearest cent.

Future Value of an Ordinary Annuity: $  

Future Value of an Annuity Due: $  

Suppose that an investor with a five-year investment horizon is considering purchasing a seven-year 7% coupon bond selling at par. The investor expects that he can reinvest the coupon payments at an annual interest rate of 9.4% and that at the end of the investment horizon two-year bonds will be selling to offer a yield to maturity of 11.2%. What is the total return on this investment?

Extra information:

Draw the cashflows of the 7 year bond. Using Par Value of 100, investors pays 100 and receives 14 coupon payments and Par Value of 100 at the end of 7 years.

Part 1: As the investor has hold the bond for 5 years, he will have received 10 coupon payments. With an reinvestment rate of 9.4% (s.a. compounding), what is the coupons plus interest on coupons at the end of 5 years?

Part 2: At the end of year 5, what is the remaining life of the bond? With a yield to maturity of 11.2%, what is the value of the bond then?

A two-year coupon bond with a 5% coupon rate is valued at $916.79 and another two-year coupon bond with a 10% coupon rate is valued at $1,007.13. Given this information, what will be the value of a two-year bond with an 8% coupon rate? The par values of all three bonds are $1,000.

1. Restructuring activities: Have the companies restructured operations in the last three years?

a)      Determine the amount of the expense on the income statement?

b)      Are other close competitors also restructuring during this time period?

c)      Find the restructuring liability on the balance sheet, does the liability seem reasonable over time?

d)      Are there significant reversals of prior accruals? This might indicate shifting.

1. Revenue recognition: On the income statement we must assess it on a quantitative and qualitive basis.

a)      Use horizontal analysis to identify any time trends.

b)      Compare the horizontal analysis of the two companies, what are the differences if any?

c)      Consider the current economic environment and the companies’ competitive landscape. Given that they operate in the same industry, do they have similar revenues?

1) a year ago you purchased a $1000 face value bond for $989. A year later you sold the bond for $981 after receiving a coupon payment for $53. What was your rate of capital gain?

2) A banker must earn at least a 4.8% return after expected inflation on short term loans. The inflation rate for the past 6 months has averaged 5.1%. The expected inflation rate for the next twelve months is 7.8%. Nominal interest rates for short term loans were 8.2% last month. What is the minimum nominal interest rate that he should charge for a one year loan?

3) A $5000 face value bond maturing in 4 years has a coupon rate of 4.1 percent. What is the coupon payment?

4) A $1080 face value bond is selling in the market place for $926. It matures in 3 years. If keep to maturity, what is the bond's yield to maturity?