Asked by user on coursehero.com 1. Toadies, Inc., has identified an investment project with the following cash flows. Year Cash Flow If the discount rate is 8 percent, what is the future value of the cash flows in year 4? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Future value $ If the discount rate is 11 percent, what is
the future value of the cash flows in year 4? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Future value $ If the discount rate is 24 percent, what is the future value of the cash flows in year 4? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Future value $ 2. Present value $ 3.First National Bank charges 13.6 percent compounded monthly on its business loans. First United Bank charges 13.9 percent compounded semiannually. Calculate the EAR for First National Bank and First United Bank. (Do not round intermediate calculations and
round your final answers to 2 decimal places. (e.g., 32.16)) EAR As a potential borrower, which bank would you go to for a new loan? 4. Wainright Co. has identified an investment project with the following cash flows. Year Cash Flow If the discount rate is 10 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Present value $ What is the present value at 20 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Present value $ What is the present value at 30 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Present value $ 5. If the required return is 7 percent, what is the value of the investment? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Present value $ What would the value be if the payments occurred for 45 years? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Present value $ What would the value be if the payments occurred for 70 years? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Present value $ What would the value be if the payments occurred forever? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Present value $ 6. Find the EAR in each of the following cases (Use 365 days a year. Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)): Stated Rate (APR) Number of Times Compounded Effective Rate (EAR) 7. You are planning to make monthly deposits of $390 into a retirement account that pays 8 percent interest compounded monthly. If your first deposit will be made one month from now, how large will your retirement account be in 25 years? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) 8.Investment X offers to pay you $5,000 per year for eight years, whereas Investment Y offers to pay you $7,100 per year for five years. Calculate the present value for Investment X and Y if the discount rate is 5 percent. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) Present value Calculate the present value for Investment X and Y if the discount rate is 15 percent. (Do not round intermediate calculations and round your final answers to 2 decimal places. (e.g., 32.16)) Present value 9. Monthly payment $ What is the effective annual rate on this loan? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Effective annual rate % 10. How many payments will you have made when your account balance reaches $22,000? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Number of payments 11. How much do you have to save each month if you can earn an 11.6 percent annual return? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Savings per month $ How much do you have to save each month if you wait 10 years before you begin your deposits? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Savings per month $ How much do you have to save each month if you wait 20 years before you begin your deposits? (Do not round intermediate calculations and round your final answer to 2 decimal places. (e.g., 32.16)) Savings per month $ Sign up to view the entire interaction Answered by user on coursehero.com um dolor sit amet, consectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellentesque dapibus efficitur laoreet. Nam risus ante, dapib Unlock access to this and over Have an account? Log In |