Question
Hello, please assist. 1. The fair rate is 8%. What is 100 per year, forever, worth now? 2. What is the same 100 per year
Hello, please assist.
1. The fair rate is 8%. What is 100 per year, forever, worth now?
2. What is the same 100 per year in number 1 worth if it only lasts for 15 years? Same rate.
3. What if the 100 in number 1 was the past cash flow and we expect it to grow at 5% forever? Same rate.
4. What if we only get the 100 from number 1 once at the end of this year? Same rate.
5. What if it we get the 100 from number 1 once, at the end of ten years? Same rate.
6. If we get the 100 from number 1 each year for ten years and invest each payment in an account that earns 8% how much will be there at the end?
7. Put 1200 in an account earning 6%. How long until it grows to 2000?
8. Buy a new calculator for 400. Leave it in the original wrapping for six years. Sell it to a finance nerd for 600 at that point. What is your rate of return?
9. Castle Black Camping is twice as risky as the average stock. The market should earn 11% and the risk free rate is 2%. What is a fair return for CBC?
10. Harlan County Safety Co. has a beta of 1.2. Form a portfolio that is half HCSC and half CBC (from number 9). What is a fair return?
11. Analyze the performance of the following firm:
Blank This Year Last Year
Assets 500 478
Liabilities 100 100
Sales 480 478
EBIT 140 149
Interest 10 10
Taxes 65 70
Net Income 65 69
(This year's ratios: ROE .163, GROA .28, FE .581, GPM .292, ATO .96, EM 1.25, IR .929, TR .5) Find last years and tell the story.
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