ou are evaluating two investment choices in order to fund an Indiana University endowment. Choice A is a 25 year annuity that pays $25,000 per year, with the first payment paid at the beginning of year 1. Choice B is a growing perpetuity that pays $20,000 per year & grows at 3% per year forever; The first payment is made at the end of year 2. Assume the required rate of return on both products is 10%? How much more will the growing perpetuity cost to purchase compared to the annuity ? Round your answer to the nearest whole dollar.

1. I have $500,000 in the bank now. I plan to withdraw $30,000 at the end of this year. Each subsequent end of year withdrawal will increase by 7%. If I earn 8% per year on my investments in the first 4 years, then 6% per year in the next 3 years, and 5% per year in the following 4 years,
   1. Determine how much money I will have at the end of 11 years.
   2. Determine the initial withdrawal amount at the end of this year that will leave me with no money at the end of 11 years using either Solver or Goal Seek.

Q2) A firm has a WACC of 14.77% and is deciding between two mutually exclusive projects.

Project A has an initial investment of $61.45. The additional cash flows for project A are: year 1 = $18.85, year 2 = $37.44, year 3 = $48.10.

Project B has an initial investment of $74.40. The cash flows for project B are: year 1 = $51.81, year 2 = $48.58, year 3 = $25.93. Calculate the Following:

a) Payback Period for Project A:

b) Payback Period for Project B:

c) NPV for Project A:

d) NPV for Project B:

Q) A firm has a WACC of 12.87% and is deciding between two mutually exclusive projects.  Project A has an initial investment of $60.18. The additional cash flows for project A are: year 1 = $18.93, year 2 = $36.27, year 3 = $42.07. Project B has an initial investment of $74.47. The cash flows for project B are: year 1 = $51.07, year 2 = $49.52, year 3 = $25.82. Calculate the Following:     

a) Payback Period for Project A:     

b) Payback Period for Project B:    

c) NPV for Project A:     

d) NPV for Project B:

The following information relates to ABC Pty Ltd for the years ended 30 June Year 3 and Year 2: Year 3 $ Year 2 $ Total assets Owners’ equity 6,020,000 3,250,000 5,470,000 3,200,000 Annual sales Net profit (after tax) Weighted average number of ordinary shares issued 6,100,000 810,000 10,234,518 3,154,350 475,200 10,046,430 Required: Calculate the net profit margin, asset turnover, earnings per share and debt to total assets ratios for ABC Ltd for the year ended 30 June Year 3

Q) A firm has a WACC of 10.50% and is deciding between two mutually exclusive projects.  Project A has an initial investment of $61.58. The additional cash flows for project A are: year 1 = $19.92, year 2 = $37.52, year 3 = $50.93. Project B has an initial investment of $71.57. The cash flows for project B are: year 1 = $58.06, year 2 = $38.54, year 3 = $38.53. Calculate the Following:     

a) Payback Period for Project A:  

b) Payback Period for Project B:   

c) NPV for Project A:   

d) NPV for Project B:  

A firm has a WACC of 10.73% and is deciding between two mutually exclusive projects. Project A has an initial investment of $60.37. The additional cash flows for project A are: year 1 = $16.93, year 2 = $36.08, year 3 = $66.38. Project B has an initial investment of $71.10. The cash flows for project B are: year 1 = $58.77, year 2 = $41.33, year 3 = $28.93. Calculate the Following:

a) Payback Period for Project A:

b) Payback Period for Project B:

c) NPV for Project A:

d) NPV for Project B:

SimpsonSimpson ​Company's inventory records for the most recent year contain the following​ data:

Quantity Unit Cost

Beginning inventory 2,000 $8.00

Purchases during year 18,000 $10.00

Simpson Company sold a total of 19,800 units during this year.

The following is a list of prices for zero-coupon bonds with different maturities but same par value of $1,000: the 1-year zero bond sells at $925.15, the 2-year zero bond sells at $862.57, the 3-year zero bond sells at $788.66, and the 4-year zero bond sells at $711.00. You have purchased a 4-year maturity bond with a 9% coupon rate paid annually. The bond has a par value of $1,000. What would be the price of the bond one year from now if the implied forward rates stay the same?