CALCULATION QUESTIONS. Calculate the value requested in each question. Show the parameters

that you used to do the calculation if you do not use the formulas $($PV$,$FV$,$ rate, PMT$,$ #Periods$)$

$1)$ Cash $=$ $$5\mathrm{.}00$

Accounts payable $=$ $$12\mathrm{.}00$

Other current liabilities $=$ $$65\mathrm{.}00$

Accounts receivable $=$ $$20\mathrm{.}00$

Inventory $=$ $$50\mathrm{.}00$

Net fixed assets $=$ $$175\mathrm{.}00$

Long$-$term debt $=$ $$40\mathrm{.}00$

Based on the following information, calculate stockholders' equity:

$2)$ Calculate the future value of $$9,000$ in $2,7$ & $20$ years at the annual interest rates of $6,10$ & $12\%$

respectively. Redo the final calculation assuming the interest is semi$-$annual.

$3)$ Calculate the future value of $6$ payments at the end of the year of $$10,000$ with an annual

interest rate of $8\%.$ Redo this calculation assuming semi$-$annual interest.

$4)$ Calculate the present value of $$9,000$ in $7,5$ & $20$ years at the annual interest rates of $8,10$ &

$6\%$ respectively. Redo the final calculation assuming the interest is semi$-$annual.

$5)$ Calculate the present value of $6$ payments at the end of the year of $$10,000$ with an annual

interest rate of $8\%.$ Redo this calculation assuming semi$-$annual interest.

$6)$ You are considering purchasing an investment that will pay $$80,000$ over ten years beginning at

the end of $2006.$ It is currently the beginning of $2003$ and the interest rate throughout the period will be

$13\%.$ What should you pay for the investment today?

$7)$ What is the net present value of a project that contributes $$25,000$ at the end of the first year and

$$12,000$ at the end of the second year? The initial cost is $$33,000.$ The appropriate interest rate is $7\%$ for

the first year and $10\%$ for the second year.

$1$

$8)$ The government imposed a fine on the Not$-$So$-$Legal Company. The fine calls for a payment of

$$100,000$ today, $$150,000$ one year from today, and $$200,000$ two years from today. The government

will hold the funds until the final payment is collected and then donate the entire amount to charity. The

government has agreed to pay an annual interest of $3$ percent on the held funds. How much will be

donated to charity in two years?

$9)$ What price should I pay today for an investment that will provide a single payment of $$120,000$

in four years. I wish to earn a return of $8\%$ on my investments.

$10)$ For an investment today in the amount of $$16,934,$ I will receive $$30,000$ in six years. Determine

the approximate rate of interest I will earn over that period, assuming that interest is compounded

annually.

$11)$ How many years will it take to accumulate $$20,000$ if I invest a lump sum of $$2,031$ and earn

interest at $10\%$ compounded annually?

$12)$ My usual cost of borrowing is $12\%.$ I have an option to lease equipment for the next three years

for a monthly lease payment of $$250.$ The first payment would be made today. What is the present

value of this series of payments.

$13)$ A bond is purchased on January $1,2013.$ The bond provides payments of $$4,000$ on June $30$ and

December $31$ of each year, and a lump sum payment of $$100,000$ on December $31,2017.$ Determine the

price that should be paid for the bond if a $10\%$ rate of return is required.

$14)$ What is the future value of the following cash flows at the end of year $3$ if the interest rate is

$6\%?$ The cash flows occur at the end of each year.

Year $1$ Year $2$ Year $3$

$$5,180$ $$9,600$ $$2,250$

$15)$ Beatrice invests $$1,000$ in an account that pays $4\%$ simple interest. How much more could she

have earned over a five$-$year period if the interest had compounded annually?

$2$

$16)$ today?

You have a sub$-$contracting job with a local manufacturing firm. Your agreement calls for annual

payments of $$50,000$ for the next five years. At a discount rate of $12\%,$ what is this job worth to you

$17)$ As an excellent student in environmental ecology, you have been awarded the "Clean Effluent

Prize" by a state agency. You $($or your estate$)$ could receive $$300$ forever from the state or $$400$ for the

next $25$ years. Payments are to be received annually. If the market rate of interest is $6\%,$ what is the

value of the two options respectively?

$18)$ You are comparing two investment options. The cost to invest in either option is the same

today. Both options will provide you with $$20,000$ of income. Option A pays five annual payments

starting with $$8,000$ the first year followed by four annual payments of $$3,000$ each. Option B pays five

annual payments of $$4,000$ each. Which one is better?

$19)$ If you have a choice to earn simple interest on $$10,000$ for three years at $8\%$ or compound

interest at $7\mathrm{.}5\%$ for three years which one will pay more and by how much?

$20)11\%?$

What is the end value of investing $$9,000$ for $7$ years at a continuously compounded rate of

$21)$ You are to receive $$75$ per year indefinitely. The market rate of interest for these types of

payments is $8\%.$ The price you would pay for this stream is$?$

$22)$ Luis has a management contract t

upon the completion of his first five years of service. The company wants to set aside an equal amount

of funds each year to cover this an