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investment

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Question

   a.What is the value of your investment two years from now? Multiply $9,000 × .885 (one year’s discount rate at 13 percent). (Round your answer to 2 decimal places.)   Value of investment$      b.What is the value of your investment one year from now? Multiply your rounded answer to part a by .885 (one year’s discount rate at 13 percent). (Round your answer to 2 decimal places.)   Value of investment$      c.What is the value of your investment today? Multiply your rounded answer to part b by .885 (one year’s discount rate at 13 percent). (Round your answer to 2 decimal places.)   Value of investment$      d.Confirm that your answer to part c is correct by going to the link provided below (present value of $1) forn = 3 and i = 13%. Multiply this tabular value by $9,000 and compare your answer to part c. There may be a slight difference due to rounding. Use Appendix B. (Round your answer to 2 decimal places.)   Present value$    e.Now compute the present value of $9,000 for 3 years at 13 percent using the formula and financial calculator methods. (Do not round intermediate calculations. Round your answer to 2 decimal places.)   Present value$

 
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Your grandfather has offered you a choice of one of the three following alternatives

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Question

Your grandfather has offered you a choice of one of the three following alternatives: $9,500 now; $4,000 a year

for seven years; or $51,000 at the end of seven years. Use Appendix B and Appendix D for an approximate answer, but calculate your final answer using the formula and financial calculator methods.

a-1.Assuming you could earn 11 percent annually, compute the present value of each alternative: (Do not round intermediate calculations. Round your final answers to 2 decimal places.)
 Present Value
  $9,500$    
  $4,000$    
  $51,000$    
a-2.Which alternative should you choose?
  
 $51,000 received at end of seven years$4,000 received each year for seven years$9,500 received now
b-1.If you could earn 12 percent annually, compute the present value of each alternative: (Do not round intermediate calculations. Round your final answers to 2 decimal places.)
 Present Value
  $9,500$    
  $4,000$    
  $51,000$    
b-2.Which alternative should you choose?
  
 $51,000 received at end of seven years$4,000 received each year for seven years$9,500 received now
 
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savings account

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Question

Determine the amount of money in a savings account at the end of 5 years, given an initial deposit of $3,500 and

an annual interest rate of 8 percent when interest is compounded: Use Appendix A for an approximate answer, but calculate your final answer using the formula and financial calculator methods. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

 Future value
  a. Annually$   
  b. Semiannually$   
  c. Quarterly
 
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capital structure

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Question

 eactive Industries has the following capital structure. Its corporate tax rate is 40%. SecurityMarket ValueRequired Rate
of Return  Debt$20 million       4%           Preferred stock20 million       6              Common stock40 million       10             What is its WACC? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
   WACC%   

 
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