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Corporate finance You invest $20000 today, $5000 at the end of year 1, 3000 at the end of year 2, and $5000 at the end

image text in transcribedCorporate finance
You invest $20000 today, $5000 at the end of year 1, 3000 at the end of year 2, and $5000 at the end of year 5. The interest rate 8% per year. How much money will you have at the end of year 20? You should plot the time-line. You bought a $5000 bond that pays annually 6% in an account for your graduate school, which costs $40000. Assuming no other investments how long you will have to wait before you go to school (assume the graduate school cost won't change) Use the rule of 72 You bought Wells Fargo bank at $51 5 on 10/1/2015, you received 4 dividends of $.38 cents since but since you are worried about the recent turmoil you sold it on 9/30/2016 for $44.42. Cash return Annual percentage return You are buying your first house (cost $400,000) and the bank gives you the following alternatives. 30 year fixed 4.25% with two points (upfront fee= 2% of the mortgage)20% down payment required 30 year fixed 4.75% (with no points) 20% down payment required Calculate your monthly payment on both (assume you have outside funds for the upfront fee). Which option is cheaper assuming a 4.25% discount rate? You bought $1000 worth of RS Pharma 5 years ago and the annual returns were as follows: + 20%, + 10%, - 5%, - -10%, + 2%. What was the return you got from the investment? What would you expect as a return for next year? If the risk free rate were 4% would this investment make sense

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