Answers digital or in excel please. Thank you!
1. If you invest $1000 at a rate of 5% per year, how much will you have in 30 years 2. You win the lottery: one million dollars paid over twenty equal annual installments starting today. If you require 7% return, what lump sum equivalent would make you indifferent between the lump sum and installments? 3. If you invest $1000 today at a rate of 6% per year, compounded monthly, and ten years later another $1000 at the same rate, how total much will you have in 20 years? 4. If you invest $1000 each month and earn 6% per year compounded monthly, about how many deposits will you have to make to accumulate one million dollars? 5. You take out a 15-year mortgage at a rate of 4.5% APR compounded monthly. You borrow $500,000. If for the first 6 payments you pay $8000 instead of the regular payment, and then make the regular payments after that, how early, in months, will you completely pay off the mortgage compared to the scheduled end date? 6. What is the price of a bond that has 30 years to maturity, pays a coupon rate of 7.4%, and has a yield to maturity of 5.4%? Face value is $1000 7. What is the yield to maturity on a bond that has 17 years to maturity, a coupon rate of 8.5%, and a price that is 108% of par? Answer as a decimal: like 0.085, not 8.5% nor 8.5. 8. What is the price of a stock that just paid a dividend of $5.04 if the required return is 13.4% and the dividend is expected to grow at 3.2% per year? 9. A stock just paid a dividend of $3.31 and is expected to pay dividends of this same amount per year for the next 20 years, after which the dividend will grow by 10% per year indefinitely. The discount rate is 11%. What is the price of the stock today? 10. Compute the NPV for a project that has cash flows of -400,10,100,1000 if the discount rate is 14% per year. 11. At what rate to the following two projects have the same NPV? Enter your answer as a decimal: like 0.085, not 8.5% or 8.5. Time 0 1 2 3 4 5 A -800 600 200 400 600 -500 B -1800 700 700 700 700 700 12. Compute the IRR for a project that has cash flows of -400, 20, 200, 2000 Submit your answer as a decimal: like 0.085, not 8.5% or 8.5 13. Using the following information, calculate operating cash flows for this year, change in NWC, and net capital spending. Assume the tax rate is 40%. Year Last Year This Year Total Revenue 335,480 367,569 Cost of Goods Sold 234,836 257,298 SG&A Expenses 33,548 36,757 Depreciation 23,872 25,208 Pre-tax Profit (EBIT) 43,224 48,306 Cash 3200 3300 Accounts Rec. 26,838 29,406 Inventory 46,967 51,460 Net Fixed Assets 50,048 39,840 Total Assets 127,054 124,005 Accounts Payable 26,838 29,406 14. Essay question: Discuss the pros and cons of using payback rule for making capital budgeting decisions. Under what circumstances does it make the most (and least) sense to incorporate payback rule into the capital budgeting process? (Can be done with bullet points, pros/ cons list, paragraphs). Doesn’t have to be very long.