...How do I see myself 10 years from now? It is a human nature to desire for something beyond ourselves. I may not be a perfect person that wishes for a perfect life. But one thing is for sure, what I wanted is what I really deserved. Dream big. No one can say what we are going to be in our future, we are the drivers of our own lives, whatever road it may be, it’s either a smooth or even rocky road. We are the planners and doers of our own lives. I’m a kind of person that never stops on dreaming, wishing for something that I really wanted to have, material things or even something that will make me and my family happy and satisfied. Back when I was only a child, I keep on saying to myself that I want a big house, a car, and I wanted to be rich so that I can help my family. I want to travel around the world with my family, something that we can’t do before. There’s nothing wrong in dreaming, as long as we have the courage and passion to pursue all of that. Keep on dreaming, but dot forget to make it real. Hard work, perseverance, and faith to God are the key. God is the center of all things; he makes all impossible things possible. And as I see myself 10 years from now, I’m already 28 years old who already graduated from this course BS Math – Business Application. And after I graduated, I applied on a job that is related to my course on a prestigious company. And as my hard work was paid off, I got promoted in a higher position as the CEO...
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...FINA 461 Section 1 | “Tree Values” Case Report | Huong Nguyen | 10/7/2010 | Section 1 – Executive Summary This report analyzes the case “Tree Values” to find an optimal way for Mr. Smith to manage his forestland and harvest the crop trees. The fundamental idea in this report is based on the concept of present value. A number of options are analyzed and the one with highest present value of pay off is considered. Questions 9, 10, and 11 give Mr. Smith 3 options: * Option 1: Harvest all crop trees now and receive $8,160 * Option 2: Let the forest grow without thinning, then harvest all crop trees 60 years from now and receive $537,962.01 at harvesting, equivalent to $28,800.08 now * Option 3: Thin and manage the forest, then harvest all crop trees 50 years from now and receive $670,033.56 at harvesting, equivalent to $58,429.42 now Based on the present value of the money received at harvesting, it is highly recommended that Mr. Smith should choose option 3. Furthermore, provided Mr. Smith decides to thin and manage his forest, in case he needs money soon to use for other purposes, he can harvest all of his crop trees at the 40th year to receive $410,608.68 at harvesting, equivalent to $58,325.19 at present, instead of waiting for 10 more years. This is because the present value of money received at the 40th year is just a little ($104.23) less than that of money received at the 50th year. Section 2 – Analysis Question 1 In order to choose the best offer...
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...$1,000 today at an interest rate of 10% per year, how much will you have 20 years from now, assuming no withdrawals in the interim? Solution: FV PV(1000,10%,20) = 6727.5 $6,727.50 2. If you invest $100 every year for the next 20 years, starting one year from today and you earn interest of 10% per year, how much will you have at the end of the 20 years? How much must you invest each year if you want to have $50,000 at the end of the 20 years? Solution: FV PMT (100, 10%,20) = 5727.50 after 20 years you will have $5,727.50 PMT FV (50000,10%,20) = 872.98 ou must invest, at the end of each year for 20 years, $872.98 3. What is the present value of the following cash flows at an interest rate of 10% per year? . $100 received five years from now. b. $100 received 60 years from now. c. $100 received each year beginning one year from now and ending 10 years from now. d. $100 received each year for 10 years beginning now. e. $100 each year beginning one year from now and continuing forever. Solution: a. PV FV(100, 10%, 5) = $62.09 b. PV FV(100, 10%,60) = $0.33 c. PV PMT(100,10%, 10) = $614.46 d. PV PMT(100,10%, 9) + 100 = 675.90 e. PV PMT(100,10%, Infiniti symbal) = $1000 4. You want to establish a “wasting” fund that will provide you with $1000 per year for four years, at which time the fund will be exhausted. How much must you put in the fund now if you can earn 10% interest per year? Solution: FV PMT (1000, 10%,4) = 3169.87 You need to start with...
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...or From Our Search Bar (http://hwguiders.com/ ) How healthcare has changed in the last 10 years The healthcare industry has made some dramatic changes in the past 10 years, and these changes have impacted patients and healthcare workers. Health care has gone through a major restructuring period. Some of the key changes were moving from hospital based care to care being provided on an outpatient basis and in nursing homes or managed care facilities. Many medical procedures are now being performed in non-hospital settings, like a physician’s office, patient’s homes, or separate outpatient clinics or surgical centers. Most of these changes were implemented to reduce the number of hospital beds needed and the reduce the length of a hospital stay. There changes were considered the first step towards reducing cost in the healthcare field. TO DOWNLOAD COMPLETE TUTORIAL HIT PURCHASE BUTTON HCS 449 Week 2 Individual Assignment Personal Action Plan Get Tutorial by Clicking on the link below or Copy Paste Link in Your Browser https://hwguiders.com/downloads/hcs-449-week-2-individual-assignment-personal-action-plan/ For More Courses and Exams use this form ( http://hwguiders.com/contact-us/ ) Feel Free to Search your Class through Our Product Categories or From Our Search Bar (http://hwguiders.com/ ) How healthcare has changed in the last 10 years The healthcare industry has made some dramatic changes in the past 10 years, and...
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...$1000 each, starting 3 years from now. What is the present value if the discount rate is 10%? 2) If the discount rate is 8% per year, what is the present value of $1500 received every third year forever (the first payment occurs three years from now)? 3) A perpetuity makes payments of $500 every second year, with the first payment coming one year from today. If the discount rate is 5%, what is the present value of the perpetuity? 4) You are the pension manager of a large firm. In 25 years an employee will retire and you must start making yearly pension payments to him of $27,000 (the first payment occurs immediately upon retirement, i.e. exactly 25 years from now). You want to make yearly contributions into the pension fund over the next 24 years so that you will have enough to cover this obligation. What is the yearly contribution needed if the annual interest rate is 6% and the employee is expected to live long enough to get 21 payments in total? 5) You get weekly cheques of $50 from a part time job. If the interest rate is 12% compounded daily: a) What is the present value of one year’s salary (52 cheques)? b) If you deposit each cheque in the bank, how much will you have after one year? c) If you deposit each cheque in the bank, but quit your job after one year (and leave all the accumulated money in the bank), how much will you have in the bank after two years? 6) Bill wants to have $50,000 in 10 years in order to buy a new boat. In each of the 20 years after that he will need...
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... Chapter 5: Financial Management: Principles and Applications 5-1A A. $5,000 invested for 10 years at 10 percent compounded annually: 5,000 10 years @ 10% = 12,968.71 B. $8,000 invested for 7years at 8 percent compounded annually: 8,000 7 yrs. @ 8% = 13,710.59 C. $775 invested for 12 years at 12 percent compounded annually: 775 12 yrs. @ 12% = 3,019.38 D. $21,000 invested for 5 years at 5 percent compounded annually: 21,000 5yrs. @ 5% = 26,801.91 5-4A A. $800 to be received 10yrs from now discounted back to the present at 10% = 308.43 B. $300 to be received 5yrs from now discounted back to the present at 5% = 235.06 C. $1,000 to be received 8yrs from now discounted back to the present at 3% = 789.41 D. $1,000 to be received 8yrs from now discounted back to the present At 20% = 232.57 5-5A A. $500 a yr for 10yrs compounded annually at 5% = 6603.30 B. $100 a yr for 5 yrs compounded annually at 10% = 671.56 C. $35 a yr for 7 yrs compounded annually at7% = 365.26 D. $25 a yr for 3 yrs compounded annually at 2% = 78.04 5-6A A. $2,500 a year for 10 yrs discounted back to the present at 7% = 17,558.95 B. $70 a yr for 3 yrs discounted back to the present at 3 % = 198.00 C. $280 a year for 7yrs discounted back to the present at 7 % = 1,563.07 D. $500 a yr for 10 yrs discounted back to the present at 10% =...
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...interest, total) with simple interest: a) yearly rate 5%, for 6 years and 4 months b) yearly rate 8%, for 7 years, 2 months and 15 days 2) With a starting investment of 3.65 how long does it take to have a final total value of 4.779 with a 5.2% yearly rate, simple interest ? 3) 10 years ago you deposited 15.6 in a bank account paying 5% (yearly compounding). Six years ago you withdraw 8.465 from the same account and reinvested the same amount at 7.25% (yearly) How much is available now (total)? 4) 3 years ago your parents opened a “saving account” in your favour with a bank paying a 10.75% yearly interest rate. How much do you own today for each € deposited? 5) You borrow, as an overdraft on your current account, 50 with an Italian bank charging you a nominal yearly rate of 18%. How much is your debt with the same bank two years later (Italian banks use Nominal Rates convertible quarterly)? 6) You are entitled to receive 100, 3 years from now. What is the present value of your credit discounted at 16% yearly rate? 7) Your bank charges a 16% yearly nominal rate (quarterly compounding) for a loan in your current account; how much will you pay after 3 years for a 400 loan? 8) How much do you have to invest to have 50 after 4 years with a 12% yearly return? 9) An initial bank deposit of 10 is equal to 50 after 10 years, find the yearly interest rate (compound). 10) How much should you invest today in order to have 30 after 5 years if a yearly yield of 18% is expected? 11) If 20 are invested...
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... 2. Incremental-cost approach. 3. Least-cost decisions. F. Uncertain future cash flows. G. Preference rankings. H. Payback period method. I. Simple rate of return method. J. (Appendix 14C) Income taxes in capital budgeting PRESENT VALUE CONCEPTS A dollar today is worth more than a dollar a year from now because a dollar received today can be invested, yielding more than a dollar a year from now. MATHEMATICS OF INTEREST If P dollars are invested today at the annual interest rate r, then in n years you would have Fn dollars computed as follows: Fn = P(1 + r)n EXAMPLE: If $100 is invested today at 8% interest, how much will the investment be worth in two years? F2 = $100(1 + 0.08)2 F2 = $116.64 The $100 investment earns $16.64 in interest over the two years as follows: |Original deposit |$100.00 | |Interest—first year ($100 × 0.08) | 8.00 | |Total |108.00 | |Interest—second year ($108 × 0.08) | 8.64 | |Total |$116.64 | PRESENT AND FUTURE VALUES The value of an investment can be viewed in two ways. It can be viewed either in terms of its value in the future...
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...Chapter 14 Capital Budgeting Decisions Solutions to Questions 14-1 Capital budgeting screening decisions concern whether a proposed investment project passes a preset hurdle, such as a 15% rate of return. Capital budgeting preference decisions are concerned with choosing from among two or more alternative investment projects, each of which has passed the hurdle. 14-2 The “time value of money” refers to the fact that a dollar received today is more valuable than a dollar received in the future. A dollar received today can be invested to yield more than a dollar in the future. 14-3 Discounting is the process of computing the present value of a future cash flow. Discounting gives recognition to the time value of money and makes it possible to meaningfully add together cash flows that occur at different times. 14-4 Accounting net income is based on accruals rather than on cash flows. Both the net present value and internal rate of return methods focus on cash flows. 14-5 Discounted cash flow methods are superior to other methods of making capital budgeting decisions because they give specific recognition to the time value of money. 14-6 Net present value is the present value of cash inflows less the present value of the cash outflows. The net present value can be negative if the present value of the outflows is greater than the present value of the inflows. 14-7 One simplifying assumption is that all cash flows occur at the end of a period. Another is that...
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...value of the following uneven cash flow stream −$50, $100, $75, and $50 at the end of Years 0 through 3? The appropriate interest rate is 10%, compounded annually. In order to calculate the present value of uneven cash fellow, I would like to identify what is the present value for uneven cash flow means? Although the return or the payment of these cash flow is usually regular, the amounts in most cases is different from period to other period .when we need to determine the present value of certain asst, we cannot use the standard formula, Because using the standard formula assumes that the payment is equal in each period and this now a nurture of the cash flow. The present value of an annuity formula assumes equal cash flows at each time period. However, sometimes cash flows are not even. Learn how to use a formula to calculate the present value of uneven future cash flows. An annuity is an asset that will pay equal amounts of money at regular time periods over its life. Essentially, an annuity can be thought of as a security with equal expected cash flows usually paid annually, semi-annually, quarterly, or monthly. The payment of dividends or payments from a lawsuit settlement are typical annuities. However, expected future cash flows from a security with the uncertainty of market and economic conditions rarely follow such a regular schedule. (Garger &Patsalides, 2010). Now after we exposed to different opinion to uneven present cash flows, we will start solving...
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...CHAPTER 1 3. Assume that the inflation-free rate of interest is 3 percent and that the inflation rate is 10 percent with complete certainty and no taxes. Determine the nominal interest rate. i = nominal rate r = inflation-free rate i = r + p + rp p = inflation rate r = 3%; p = 10%; i = ? i = 0.03 + 0.1 + (0.03)(0.1) i = 0.133 = 13.3% 4. In a world of certainty with no taxes, the nominal interest rate is 10 percent and the inflation-free interest rate is 5 percent. What is the inflation rate? i = 10%; r = 5%; p = ? i = r + p + rp 0.1 = 0.05 + p + 0.05p 0.05 = 1.05p p = 0.0476 = 4.76% 5. Assume no taxes. Suppose the inflation-free interest rate is 5 percent. The market forecasts a deflation rate of 15 percent. What is the nominal interest rate? r = 5%; p = -15%; i = ? i = r + p + rp i = 0.05 + (-0.15) + 0.05(-0.15) i = -0.1075 = -10.75% *The nominal interest rate cannot be negative; no one will invest at a negative rate. CHAPTER 2 4. The Treasury announces an auction of $10 billion par value of 52-week Treasury bills. $2 billion of noncompetitive bids are received. The competitive bids are as follows: Price per $1 of par Par value 0.9200 $3 billion 0.9194 $3 billion 0.9188 $4 billion 0.9180 $2 billion 0.9180 $2 billion 0.9178 $6 billion Compute the price per dollar of par paid by noncompetitive...
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...$10,000 with an interest rate of 16% and 4 quarterly periods compounding is $11,698.59. 3. Define an annuity. A series of equal cash flows made or received at regular time intervals. 4. Define an ordinary annuity. A series of payments made or received at the end of each period. 5. Define an annuity due. An annuity with n payments, where the first payment is made at time t = 0, and the last payment is made at time t = n - 1. 6. In the future value annuity table at any interest rate for 1 year, why is the future value interest factor of this annuity equal to 1.00? In a future value annuity table at any interest rate for 1 year, the future value interest factor of the annuity is equal to 1.00 because no interest has been acquired. 7. What is the relationship between the present value of single dollar payment formula and the present value of an ordinary annuity formula for the same number of years and same discount rate? Assume a discount rate of 10% and n value of 5 periods. (Be sure to support your explanation with an example.) The...
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..._____________________ 10 % of total grade Signature / Date: ________________ Guidelines: You may use notes and required reading to answer the questions. Collaboration among students is not allowed. Please answer each problem, print and attach your answers to this document, and bring a signed copy to class on Tuesday September 8, 2015 Problem #1 – 10 points You decide to purchase a $2500 TV at YouBuy, an electronics retailer. You have $2500 cash in your pocket. The bank rate of interest is 10%. The salesman offers you a choice of three ways to pay: i) You can get $300 off the price today, so you would have to pay $2200 today. ii) You can pay nothing today, $1250 in one year, and $1250 in two years. iii) You can pay $2500 in two years plus payment of a $100 financing charge today. Which option should you choose? 1|Page Problem #2 – 20 points (15 points for part a) and 5 points for part b) ) Bill and Jane are married with one child. The current date is the start of the college year. All tuition is paid at the start of the year. They anticipate their child will go to college 7 years from now and will attend for four years at a cost of $50,000 per year. They anticipate that Jane’s mother will give them $100,000 7 years from now to help pay for the college costs. Finally, they also plan to purchase a vacation house in the mountains 10 years from now for $350,000. They can lend and borrow as much as they like at 5% per year from their bank. a) Suppose...
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...Five years at an interest rate of 5% per year. 2000x 1.05^5= 2552.56 B. Ten years at an interest rate of 5% per year. 2000x1.05^10= 3257.79 C. Five years at an interest rate of 10% per year 2000x1.1^5= 3221.02 D. Why is the amount of interest earned in part (a) less than half the amount of interest earned in part (b)? In the last 5 years you gain more interest on the interest already earned in the beginning 5 years and you get interest on the first $2,000. #4 What is the present value of $10,000 received? A. Twelve years from today when the interest rate is 4% per year? PV= 10,000/1.04^12= 6,245.97 B. Twenty years from today when the interest rate is 8% per year? PV= 10,000/1.08^20= 8,879.71 C. Six years from today when the interest rate is 2% per year? PV= 10,000/1.02^6= 8,879.71 #9 You are thinking of retiring. Your retirement plan will pay you either $250,000 immediately on retirement or $350,000 five years after the date of your retirement. Which alternative should you choose if the interest rate is: A. 0% per year? 350,000/1.0^5= 350,000 B. 8% per year? 350,000/1.08^5= 238,204 C. 20% per year? 350,000/1.2^5= 140,657 I would take the 250,000 #14 You have been offered a unique investment opportunity. If you invest $10,000 today you will receive $500 one year from now, $1500 two years from now...
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...would $1, growing at 3.5% per year, be worth after 75 years? a. $12.54 b. $13.20 c. $13.86 d. $14.55 e. $15.28 b 4 - The Morrissey Company's bonds mature in 7 years, have a par value of $1,000, and make an annual coupon payment of $70. The market interest rate for the bonds is 8.5%. What is the bond's price? | | | a. | $923.22 | b. | $946.30 | c. | $969.96 | d. | $994.21 | e. | $1,019.06 | A 7 - One problem with ratio analysis is that relationships can be manipulated. For example, if our current ratio is greater than 1.5, then borrowing on a short-term basis and using the funds to build up our cash account would cause the current ratio to increase. | | a. | True | b. | False | B | | 10 - If the discount (or interest) rate is positive, the future value of an expected series of payments will always exceed the present value of the same series. a. True b. False a 13 - Last year Tempe Corporation's sales were $525 million. If sales grow at 7.5% per year, how large (in millions) will they be 8 years later? a. $845.03 b. $889.51 c. $936.33 d. $983.14 e. $1,032.30 7 - Which of the following investments would have the lowest present value? Assume that the effective annual rate for all investments is the same and is greater than zero. a. Investment A pays $250 at the end of every year for the next 10 years (a total of 10 payments). b. Investment B...
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