You are promised a nominal return of 13% on a 1-year investment, and expect the rate of inflation to be 4% during that period. The real rate you expect to earn is %
Please enter your answer with TWO decimal points.
In: Finance
You decide to save $7,000 at the end of each year for the next 11 years. If your savings earn an annual interest rate of 4%, how much will you have saved up by the end of 11 years? Round to the nearest cent.
In: Finance
The Blandings Home Construction Company purchased a new crane for $350,000 this year. It sold the old crane for $50,000. At the time it had a net book value of $20,000. Assume any profit on the sale of old equipment is taxed at 21%. These were the only transactions that affected investing activities this year. Construct the Cash Flow from Investing Activities section of the statement of cash flows to concisely convey the maximum information to readers of the company's financial statements. Use a minus sign, to indicate any decreases in cash or cash outflows.
| Cash From Investing Activities | ||
| Investment in new equipment | $ | |
| Sale of surplus equipment after tax | ||
| Net new investment | ||
In: Finance
A 30-year security has a price of $10,860.71. The security pays $600 at the end of each of the next 10 years, $1,200 at the end of years 11-15, and then it pays a different fixed cash flow amount at the end of each of the following 10 years (i.e., years 16-25). Finally, in years 26-30 it again pays $600 per year at year end. Interest rates are 6.0%. What is the annual cash flow amount between years 16 and 25?
In: Finance
Assume that 28 years ago, the average tuition for one year in the MBA program at a university was $3.4 thousand and now it is $36.8 thousand for one year. What is the compound annual growth rate in tuition over this period? Round to the nearest 0.01% (e.g., if your answer is 6.832%, record it as 6.83)
In: Finance
A debtor offers to repay a debt by making a payment of $500 one year from today, $3,000 three years from today, and $4,000 four years from today. The lending agency would rather receive the money in 4 equal end of year payments. Assuming a TVOM of 6%, how much would the debtor need to pay to make these cash flows equivalent?
In: Finance
A $1 payment is to be made each year for 22 years. The effective annual rate of interest is 8.25%. If the first payment is one year from now, the present value of these payments is $10.
In which one of the following ranges is the present value of these payments if the first payment is 22 years from now?
A. <$1.80
B. >=$1.80 and <$1.86
C. >=$1.86 and <$1.92
D. >=$1.92 and <$1.98
E. >=$1.98
In: Finance
You expect to receive $1,000 in one year, and $4,000 in three years. If the interest rate is 12% compounded monthly, what is the present value of all cash flows?
Group of answer choices
$3,739.98
$5,600.00
$6,739.71
$3,683.15
In: Finance
A 5-year bond with a face value of $1000 has a coupon rate of 6%, with semiannual payments. What is the coupon payment for this bond per 6-month period? A. $60 B. not enough information C. $30
In: Finance
Consider a growing perpetuity that will pay $250 in one year. Each year after that, you will receive a payment that is 7% larger than the last payment. This pattern of payments will continue forever. If the interest rate is 10%, then the value of this perpetuity is closest to:
$5561 $8333 $6215 $4000
In: Finance