### Please show me how to calculate bond duration.

Friday, 12 September 2014

Please show me how to calculate bond duration. I don’t get the formula at all. Bond Duration: \$15,000 Company A Bond Yrs to maturity – 25 Coupon – 9% FMV – \$3,000.47 Cost Basis – \$12,950.00

### Assume you won the lottery for \$7M.

Friday, 12 September 2014

Assume you won the lottery for \$7M. You have the following two choices in how you want to receive your prize: 1. \$350,000 each year for the next 20 years, with the first check received today 2. One lump sum of \$4M in cash today. Which is the better option?

### Initial investment outlay of \$20 million for equipment only

Friday, 12 September 2014

Initial investment outlay of \$20 million for equipment only Project and equipment life: 5 years Sales projected to be \$12 million per for 5 years Assume gross margin of 50% (exclusive of depreciation) Depreciation: straight-line for tax purposes Selling, general and administrative expenses: 10% of sales Tax rate: 35% Solve for NPV and IRR

### Your company is considering a project

Friday, 12 September 2014

Your company is considering a project (expanding its household product division). Your company is a private company and there are no securities issued and traded in public financial markets. Assume that the project will be 100% equity financed. The initial investment would be 10 million dollar and free cash flows (FCF) for next four years

### Briefly discuss the concept of relevant cash flows when evaluating a new project.

Friday, 12 September 2014

b. Briefly discuss the concept of relevant cash flows when evaluating a new project. 1- Explain the relationship between (i) discount rate and present value, and (ii) compound rate and future value. 2- Why is the future value for an annuity due always higher than that of an ordinary annuity? 3- Although the payment made

### Suppose a company has hired you to estimate the cash flows arising from a proposed

Friday, 12 September 2014

Suppose a company has hired you to estimate the cash flows arising from a proposed capital project by replacing old equipment with a \$0 market value and a book value of \$6000, and you have been handed the relevant data below. The project being considered has a 5-year tax life, and at the end of

### Blue Grass Life insurance is trying to sell you an investment

Friday, 12 September 2014

Blue Grass Life insurance is trying to sell you an investment policy that will pay you and your heirs \$10,000 per year forever. If the required return on this investment is 12%, how much will you pay for the policy?

### Determine what payments are required to repay a \$100,000 loan

Friday, 12 September 2014

Determine what payments are required to repay a \$100,000 loan over 20 years in equal monthly installments if interest rates remain at 9% p.a. (compounded monthly)

### Calculate the monthly repayments on a \$20,000 loan if interest rates

Friday, 12 September 2014

### In May 1992, a 60 yr old nurse gambled \$12 in a Reno casino

Friday, 12 September 2014

In May 1992, a 60 yr old nurse gambled \$12 in a Reno casino and walked away with the biggest jackpot in history – \$9.3 million. In reality, the jackpot wasn’t really worth \$9.3 million. The sum was to be paid in 20 annual installments of \$465,000 each. What is the present value of the

TOP
error: Content is protected !!