You are presented with an investment opportunity that will give you the following stream of cash flows: nothing for the next 2 years; at the following year, an amount of $5,000 per year until year 14; and then an amount of $8,000 per year until year 22. If your required rate of return (APR) is 9% compounded annually, what is the present value today of these cash flows?

Treasury spot rates (expressed as semiannually pay yields to maturity) are as follows: 6 months 1%, 1 year 1.5%, 1.5 year 2% 2 year: 2.5% and 2.5 year: 2.25%. A 2.5 year, 3.5% Treasury bond is trading at $1,043. What is the arbitrage trade and how much would profit would you earn from doing the trade?

A company prices its tornado insurance using the following assumptions:

• In any calendar year, there can be at most one tornado.

• In any calendar year, the probability of a tornado is 0.01.

• The number of tornadoes in any calendar year is independent of the number of tornados in any other calendar year.

Using the company's assumptions, calculate the probability that there are fewer than 3 tornadoes in a 16-year period.

27. You are valuing an investment that will pay you $28,000 per year for the first 4 years, $43,000 per year for the next 12 years, $69,000 per year the next 18 years, and $61,000 per year for the following 10 years (all payments are at the end of each year). If the appropriate annual discount rate is 11.00%, what is the value of the investment to you today?

Suppose a company has proposed a new 4-year project. The project has an initial outlay of $17,000 and has expected cash flows of $8,000 in year 1, $9,000 in year 2, $10,000 in year 3, and $14,000 in year 4. The required rate of return is 15% for projects at this company. What is the profitability index for this project? (Answer to the nearest hundredth, e.g. 1.23)

General City's general fund reported a supplies inventory costing $200,000 at the beginning of the fiscal year. During the year, General City purchased materials and supplies on account for $15,000,000; $900,000 remains unpaid at year-end. Materials and supplies costing $125,000 are on hand at the end of the fiscal year. Prepare the journal entries made this year using the consumption method and purchases method

Suppose a company has proposed a new 4-year project. The project has an initial outlay of $29,000 and has expected cash flows of $7,000 in year 1, $8,000 in year 2, $11,000 in year 3, and $13,000 in year 4. The required rate of return is 14% for projects at this company. What is the profitability index for this project? (Answer to the nearest hundredth, e.g. 1.23)

Havana, Inc., has identified an investment project with the following cash flows. If the discount rate is 9 percent, what is the future value of these cash flows in Year 5? (Hint: Be careful with the number of periods.) If the picture doesn't load, the cash flows shown in the picture are as follows: 910 in year 1; 1140 in year 2; 1360 in year 3; and 2100 in year 4.

2. A What is the monthly payment amount on a $100,000 home loan if the rate is 8.0% APR, and the loan is made for a 15-year period?

B A four-year investment requires annual deposits of $300 at the beginning of each year. The deposits earn 6% per year. What is the investment’s future value? Remember, the deposits are made at the beginning of each year (annuity due).

A recent edition of The Wall Street Journal reported interest rates of 3.10 percent, 3.45 percent, 3.76 percent, and 3.02 percent for three-year, four-year, five-year, and six-year Treasury notes, respectively. According to the unbiased expectations theory of the term structure of interest rates, what are the expected one-year rates during years 4, 5, and 6?