& As a finance manager, you have to choose between two options of investment: A and B. Both these options will cam $1000 million as a future value and will require an investment of $500 million today. The returns for A will be camed after 5 years at an interest rate of 10%, whereas returns for B will be camed after years at an interest rate of 12% Which of these two options will the finance manager choose? 7. Future Value Upstate University charges 516,000 a year in graduate tuition Tuition rates are growing a 4.5% cach year. You plan on enrolling in graduate school in five years. What is your expected graduate tuition in five years? 13. Pre Value Prestigious University is officering a new admission and tuition payment plan for all alumni. On the birth of a child,parents can guarantee admission to Prestigious University if they pay the first year's tuition. The university will pay an annual rate of retum of 4.5% on the deposited tuition, and a full refund will be available if the child chooses another university. The tuition is $12,000 per year at Prestigious University and is frozen at that level for the next eighteen years. What would parents pay today if they just gave birth to a new baby and the child will attendcollege in eighteen years How much is the required payment to secure admission for their child in the interest rate falls to 2.5% 18. Interest rate. Two mutual fund managers, Martha and David, have been bragging about whose fund is the top performer. Martha states that investors bought shares in her mutual fund ten years ago for 21.00, and those shares are now worth $65.00. Duvid states that investors bought shares in his mutual fund for only $3.00 six years ago, and now they are worth $7.30. Which mutual fund manager has had the highest growth rate for the management period? Should this comparison be made over different management periods? Why or why not? m & As a finance manager, you have to choose between two options of investment: A and B. Both these options will cam $1000 million as a future value and will require an investment of $500 million today. The returns for A will be camed after 5 years at an interest rate of 10%, whereas returns for B will be camed after years at an interest rate of 12% Which of these two options will the finance manager choose? 7. Future Value Upstate University charges 516,000 a year in graduate tuition Tuition rates are growing a 4.5% cach year. You plan on enrolling in graduate school in five years. What is your expected graduate tuition in five years? 13. Pre Value Prestigious University is officering a new admission and tuition payment plan for all alumni. On the birth of a child,parents can guarantee admission to Prestigious University if they pay the first year's tuition. The university will pay an annual rate of retum of 4.5% on the deposited tuition, and a full refund will be available if the child chooses another university. The tuition is $12,000 per year at Prestigious University and is frozen at that level for the next eighteen years. What would parents pay today if they just gave birth to a new baby and the child will attendcollege in eighteen years How much is the required payment to secure admission for their child in the interest rate falls to 2.5% 18. Interest rate. Two mutual fund managers, Martha and David, have been bragging about whose fund is the top performer. Martha states that investors bought shares in her mutual fund ten years ago for 21.00, and those shares are now worth $65.00. Duvid states that investors bought shares in his mutual fund for only $3.00 six years ago, and now they are worth $7.30. Which mutual fund manager has had the highest growth rate for the management period? Should this comparison be made over different management periods? Why or why not? m
