Answer the following questions, using spreadsheet financial functions to do the calculations.

FV of a lump sum

1. Wysincos 2020 sales were $250 million. If sales grow at 12% per year, what will be the sales 5 years later, in 2025, in millions?

PV of a Single amount (lump sum)

2. Suppose a government bond will pay $1,000 four years from now. If the going interest rate on 4year government bonds is 8%, how much is the bond worth Interest rate on a simple lump sum investment

3. The Government of Jamaica offers to sell you a financial asset for $1,250. No payments will be made until the asset matures 10 years from now, at which time it will be redeemed for $1,000. What interest rate would you earn if you bought this asset at the offer price?

Number of periods

4. Petrojams 2021 earnings per share (EPS) were $20, and its growth rate during the prior 5 years was 6.0% per year. If that growth rate were maintained, how long would it take for the companys EPS to double?

PV of an ordinary annuity

5. Suppose you have an opportunity to buy an annuity that pays $5,000 at the end of each year for 8 years, at a 9.5% interest rate. What is the most you should pay for the annuity?

FV of an ordinary annuity

6. Simone is saving $800,000 per year in a savings account that is paying an annual compound interest of 5%. She intends to continue this for five years after which she will move it to JMMBs long-term fund which pays interest of 12% per annum compounded semi-annually.

a. How much would Simone be able to transfer to JMMB after 5 years?

b. How much money will Simone have at the end of 8 years from today?

FV of an ordinary annuity due

7. An annuity makes 15 annual payments of $3,500 with the first payment coming today. What is the future value of this as of 15 years from now if the interest rate is 8.5%?

PV of a perpetuity

8. Whats the present value of a perpetuity that pays $3,000 per year if the appropriate

interest rate is 12%?

PV of an uneven cash flow stream

9. At a rate of 5.5%, what is the present value of the following cash flow stream? $0 at Time 0; $2,500 at the end of Year 1; $6,000 at the end of Year 2; $1,000 at the end of Year 3; and $1,700 at the end of Year 4?