Question
1)Silver Sun Packaging just bought a new climbing wall. To pay for the climbing wall, the company took out a loan that requires Silver Sun
1)Silver Sun Packaging just bought a new climbing wall. To pay for the climbing wall, the company took out a loan that requires Silver Sun Packaging to pay the bank a special payment of 14,670 dollars in 3 month(s) and also pay the bank regular payments of 4,560 dollars each month forever. The interest rate on the loan is 0.66 percent per month and the first monthly payment of 4,560 dollars will be paid in 1 month. What was the price of the climbing wall?
2) You own a building that is worth 53,500 dollars and is expected to produce quarterly cash flows of 2,300 dollars forever. The first quarterly cash flow is expected in 3 months from today. What is the expected quarterly cost of capital for the building? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098.
3)Quantum Pizza took out a loan from the bank today for 25,300 dollars. The loan requires Quantum Pizza to make a special payment of 13,500 dollars to the bank in 1 years and also make regular, fixed payments of X to the bank each year forever. The interest rate on the loan is 8.62 percent per year and the first regular, fixed annual payment of X will be made to the bank in 1 year. What is X, the amount of the regular, fixed annual payment?
4) Albert has an investment worth 316,526 dollars. The investment will make a special payment of X dollars to Albert in 6 month(s) and the investment also will make regular, fixed monthly payments of 4,790 dollars to Albert forever. The expected return for the investment is 1.57 percent per month and the first regular, fixed monthly payment of 4,790 dollars will be made to Albert in 1 month. What is X, the amount of the special payment that will be made to Albert in 6 month(s)?
5)An investment is expected to generate annual cash flows forever. The first annual cash flow is expected in 1 year and all subsequent annual cash flows are expected to grow at a constant rate annually. We know that the cash flow expected in 2 year(s) from today is expected to be 1,340 dollars and the cash flow expected in 9 years from today is expected to be 2,940 dollars. What is the cash flow expected to be in 5 years from today?
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