CAN YOU ANSWER IN 50 MINUTES????? NOTE:forthefollowingproblems,YESallofthem!-youMUSTshowallworkINCLUDINGtheappropriateformulafrompagesOM1-10.Ifyoudon'tshowtheformulathegradeforthatproblemiszero-asinnothing-andIdon'tcareifyoudohavethecorrectanswer-it'sstillzero,younknow,thenumberbetweenoneandminusone.Yes,I'mserious! TOrecaptheformulasandthesearetheonesyoumustuses: FV=PV(FVIFr,n) FVA=CF(FVIFAr,n) PV=FV(PVIFr,n) PVA=CF(PVIFAr,n) Note:CFstandsforcashflow.InthetwoannuityformulasthiswouldbethesameasPMT(orpaymnet).YouimayfindPMTinsometextsratherthanCFbuttheystandforthesamething.Similarly,thesubcriptrinallfourformulasyoumayseesometimesasadfiierentletter,ofteni.Again-meansthesamething. ESSAY11: 11.SomedayyouwanttoretireandbuyasmallcabininMontana(awordtothewisehere:ifyouactuallyarethinkingaboutthismakesureyouvisitMontanainthewinternotthesummeritcangetabitnippyinthewinterIlivedthere5years).Anyway,youarefifteenyearsawayfromretirement.Youicaninvestmoneyannuallyinanaccountthatpays6%(youfiredHarveyandwentwithMerrillLynchgoodmove).Ifyourdreamcabincosts(yourestimate)$500,000(heckitsaverynicecabin)andtheoutbuildingyouwillalsoneedwilltackonanadditional$12,072,howmuchwillyouneedtosaveeachyear? Forthetoolbar,pressALT+F10(PC)orALT+FN+F10(Mac). --Fontfamily--AndaleMonoArialArialBlackBookAntiquaComicSansMSCourierNewGeorgiaHelveticaImpactSymbolTahomaTerminalTimesNewRomanTrebuchetMSVerdanaWebdingsWingdings
Question:
- CAN YOU ANSWER IN 50 MINUTES?????
NOTE:forthefollowingproblems,YESallofthem!-youMUSTshowallworkINCLUDINGtheappropriateformulafrompagesOM1-10.Ifyoudon'tshowtheformulathegradeforthatproblemiszero-asinnothing-andIdon'tcareifyoudohavethe"correctanswer"-it'sstillzero,younknow,thenumberbetweenoneandminusone.Yes,I'mserious!
TOrecaptheformulasandthesearetheonesyoumustuses:
FV=PV(FVIFr,n)
FVA=CF(FVIFAr,n)
PV=FV(PVIFr,n)
PVA=CF(PVIFAr,n)
Note:"CF"standsfor"cashflow".Inthetwoannuityformulasthiswouldbethesameas"PMT"(orpaymnet).YouimayfindPMTinsometextsratherthanCFbuttheystandforthesamething.Similarly,thesubcript"r"inallfourformulasyoumayseesometimesasadfiierentletter,often"i".Again-meansthesamething.
ESSAY11:
11.SomedayyouwanttoretireandbuyasmallcabininMontana(awordtothewisehere:ifyouactuallyarethinkingaboutthismakesureyouvisitMontanainthewinternotthesummeritcangetabitnippyinthewinterIlivedthere5years).Anyway,youarefifteenyearsawayfromretirement.Youicaninvestmoneyannuallyinanaccountthatpays6%(youfiredHarveyandwentwithMerrillLynchgoodmove).Ifyourdreamcabincosts(yourestimate)$500,000(heckitsaverynicecabin)andtheoutbuildingyouwillalsoneedwilltackonanadditional$12,072,howmuchwillyouneedtosaveeachyear?
Forthetoolbar,pressALT+F10(PC)orALT+FN+F10(Mac). --Fontfamily--AndaleMonoArialArialBlackBookAntiquaComicSansMSCourierNewGeorgiaHelveticaImpactSymbolTahomaTerminalTimesNewRomanTrebuchetMSVerdanaWebdingsWingdings --Fontsize--1(8pt)2(10pt)3(12pt)4(14pt)5(18pt)6(24pt)7(36pt) --Format--HeadingSubHeading1SubHeading2ParagraphFormattedCode --Fontfamily-- --Fontsize-- Path:pWords:3
10 points
Question 12
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12.
Inflation can really be a pain how it eats away at the value of a dollar! What costs say $10 today will cost a lot more in 5 or 10 or 15 years. Lets play with that concept a bit. If inflation were to average 4% for the next 20 years and you were to receive $25,000 twenty years from now, how much money would that be worth (in terms of purchasing power) today?
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10 points
Question 13
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13.
Youve been talking with Harvey (remember him?) and hes giving you some financial advice (he said it is for free but you keep paying for the beer). Anyway, hes making a good point that you should put money away each year for that old rainy day. You always get money back from your income taxes, but up until now you always seem to blow it; you cant even remember on what. So heres the plan: from now on you will invest $500 each year with Harvey. He in turn will invest it for you and you will earn 4% interest each year actually Harvey says that 4% will go on forever! Fast forwarding 12 years you have done exactly what Harvey advised, but at the end of the 12thyear you stop the $500 yearly investment you dont take the money out you decide you dont need it yet but three years later you do. How much will you have saved then?
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15 points
Question 14
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14.
I really like the TV show Shark Tank where new entrepreneurs try to convince one (or more) of the sharks to invest in some new idea. The sharks are sharp they ask very specific financial questions. You make it on The Tank and are asking for $150,000 in exchange for 10% equity in your company. One of the sharks, Mr. Wonderful, asks what you need the money for. You tell him you need to buy a new, faster machine to scale your business. Next question for you: that seems like a lot of money for a widget machine how do you justify that? You reply, well, I estimate that the net profit from the machine will be $20,000 per year and the production line will run for 10 years so thats $200,000, a lot more than the $150,000 the machine costs!. But the shark isnt buying your calculation and with a steely gaze says, but you didnt take into account the time value of money discount that cash flow at 10% and does it still make sense?. Hummm good question! Does it? Show the calculation to answer that question.
For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac). -- Font family --Andale MonoArialArial BlackBook AntiquaComic Sans MSCourier NewGeorgiaHelveticaImpactSymbolTahomaTerminalTimes New RomanTrebuchet MSVerdanaWebdingsWingdings -- Font size --1 (8pt)2 (10pt)3 (12pt)4 (14pt)5 (18pt)6 (24pt)7 (36pt) -- Format --HeadingSub Heading 1Sub Heading 2ParagraphFormatted Code -- Font family -- -- Font size -- Path:p Words:0
15 points
Question 15
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15.
OMIT
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0 points
Question 16
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16.
In the first problem you saved money each year and thats good. But what would happen if old Harvey (remember he pays 6% interest) paid interest semi-annually? You like that even better! So you decide to invest an additional $200 every six months in Harveys new investment. If you do this for 10 years, how much will you have with this investment at the end of that time?
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