BUSI 2093 - (Assignment 2) - Unit 4 - Time Value o... (BUSI 2093 Introduction to Managerial Finance)

Hi Shivani, when you submit this form, the owner will be able to see your name and email address.

1.Your company will generate $68,000 in annual revenue each year for the next seven years from a new information database. If the appropriate interest rate is 8.5%, what is the present value of the savings? (Do not round intermediate calculations. Round the final answer to 2 decimal places. Omit any commas, spaces, $ sign in your response.). Single line text.

(1 Point)

2.You are scheduled to receive $20,000 in two years. When you receive it, you will invest it for five more years at 6% per year. How much will you have in seven years? (Do not round intermediate calculations and round your final answer to 2 decimal places. Omit Commas, spaces and $ sign in your response.). Single line text.

(1 Point)

3.Bank of Vancouver pays 7% simple interest on its savings account balances, whereas Bank of Calgary pays 7% interest compounded annually. If you made a $6,000 deposit in each bank, how much more money would you earn from your Bank of Calgary account at the end of 9 years? (Do not round intermediate calculations and round your final answer to 2 decimal places. Omit any commas or spaces or $ sign in your response.). Single line text.

(1 Point)

4.The Sutherland Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $30,000 per year forever. If the required return on this investment is 5.8%, how much will you pay for the policy? (Round the final answer to 2 decimal places. Omit commas, spaces or $ sign in your response.). Single line text.

(1 Point)

5.6-1 Buena Vista Co. has identified an investment project with the following cash flows. Year 1 $720 Year 2 $930 Year 3 $1,190 Year 4 $1,275 If the discount rate is 10%, what is the present value of these cash flows? (Do not round intermediate calculations. Round the final answers to 2 decimal places. Omit commas, spaces & $ sign in your response.). Single line text.

(1 Point)

6.Intercontinental Inc. has an unfunded pension liability of $60,000 that must be paid in 5 years. To assess the value of the firms stock, financial analysts want to discount this liability back to the present. If the relevant discount rate is 6%, what is the present value of this liability? (Do not round intermediate calculations and round your final answer to 2 decimal places. Omit any commas, spaces or $ sign in your response.). Single line text.

(1 Point)