Question
1. Carla Vista, Inc., management expects the company to earn cash flows of $11,900, $15,100, $19,000, and $19,900 over the next four years. If the
1. Carla Vista, Inc., management expects the company to earn cash flows of $11,900, $15,100, $19,000, and $19,900 over the next four years. If the company uses an 8 percent discount rate, what is the future value of these cash flows at the end of year 4?
2. James Smith is saving for an Australian vacation in three years. He estimates that he will need $4,000 to cover his airfare and all other expenses for a week-long holiday in Australia. If he can invest his money in an S&P 500 equity index fund that is expected to earn an average annual return of 9.0 percent over the next three years, how much will he have to save every year if he starts saving at the end of this year? (Round factor values to 4 decimal places, e.g. 1.5212 and final answer to 2 decimal places, e.g. 15.25.)
3.
Mark Harris bought a Honda Civic for $17,345. He put down $6,000 and financed the rest through the dealer at an APR of 7.4 percent for four years. What is the effective annual interest rate (EAR) if the loan payments are made monthly? (Round answer to 2 decimal places e.g. 15.25%.)
Effective Annual interest rate | enter the effective annual interest rate rounded to 2 decimal places |
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