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Task is to understand how to solve each problem and to be able to explain the solution process used. Show all calculations, step by step, using Excel. Grade will depend on the quality of explanations. 7-1. Manager Paul Smith believes an investment project will have the following yearly cash flows with the associated probabilities throughout

Please reply in “doc” format: 1. Mario’s auto shop plans to buy a new garage in three years to have more space for repairing it’s trucks. The garage cost $400,000. What lump sum amount should the company invest now to have the $400,000 available at the end of the 3 yr period? Assume that the

1 Your younger sister, Jennifer, will start college in five years. She has just informed your parents that she wants to go to Penn State U,. which will cost $18,000 per year for four years (cost assumed to come at teh end of each year). Anticipating Jennifer’s ambitions, your parents started investing #3,000 per year

You have $30,400 to invest, and would like to receive $40,000 in 5 years. What interest rate do you need to accomplish this? a) 8.23% b) 6.87% c) 5.64% d) 10.56 You are purchasing a home. You are scheduled to make 30 annual installments of $12,000 per year, with no required down payment. Given a

1. An investor deposits $50,000 today in an interest bearing account. The account pay 7% interest annually, and the investor expects to withdraw the principal plus interest at the end of 5 years. How much would the investor accumulate by the end of 5 years if interest is compounded monthly? 2. You plan to deposit

Explain whether the following statement is true or false: $100 a year for 10 years is an annuity, but $100 in year 1, $200 in year 2, and $400 in years 3 through 10 does not constitute an annuity. However, the second series contains an annuity.

Find the future value of an annuity if you invest $1,550 annually for 5 years at 11.5% compounded annually.

A company has a capital structure that consists of 50 percent debt and 50 percent equity. Which of the following statements is most correct? a. The cost of equity financing is greater than or equal to the cost of debt financing. b. The WACC exceeds the cost of equity financing. c. The WACC is calculated

1.Jane purchased an annuity contract that pays her $800 per month. The annuity cost her $60,000 and it has an expected return of $100,000. How much of each monthly annuity payment is includible in jane’s gross income? 2. Sam owes Bob $8,000. Bob cancels (forgives) the debt. The cancellation is not a gift and Sam

1) Amstop Company issues $20,000,000 of 10-year, 9% bonds on March 1, 2007 at 97 plus accrued interest. The bonds are dated January 1, 2007, and pay interest on June 30 and December 31. What is the total cash received on the issue date? 2) On January 1, 2007, Bleeker Co. issued eight-year bonds with