Question
Homework help, will rate after 1. Penny bought a new truck today from Middlefield Motors. She will receive a cash rebate of 4,500 dollars from
Homework help, will rate after
1. Penny bought a new truck today from Middlefield Motors. She will receive a cash rebate of 4,500 dollars from Middlefield Motors today, pay 27,400 dollars to Middlefield Motors in 1 year(s), receive a cash rebate of 7,500 dollars from Middlefield Motors in 4 year(s), and pay 22,400 dollars to Middlefield Motors in 7 year(s). If the discount rate is 15.37 percent, then what is the present value of the cash flows associated with this transaction? Note: the correct answer is less than zero.
2.Preeti has an investment that is worth 77,900 dollars and has an expected return of 5.67 percent. The investment is expected to pay her 24,800 dollars in 5 year(s) from today and X dollars in 4 year(s) from today. What is X?
3.Red Royal Health just bought a new food truck. To pay for the food truck, the company took out a loan that requires Red Royal Health to pay the bank a special payment of 15,210 dollars in 5 month(s) and also pay the bank regular payments of 3,120 dollars each month forever. The interest rate on the loan is 1.61 percent per month and the first monthly payment of 3,120 dollars will be paid in 1 month. What was the price of the food truck?
4. You own a building that is worth 53,100 dollars and is expected to produce quarterly cash flows of 2,450 dollars forever. The first quarterly cash flow is expected in 3 months from today. What is the expected quarterly cost of capital for the building? Answer as a rate in decimal format so that 12.34% would be entered as .1234 and 0.98% would be entered as .0098
5.An investment, which is worth 37,600 dollars and has an expected return of 3.72 percent, is expected to pay fixed annual cash flows forever with the next annual cash flow expected in 1 year. What is the present value of the annual cash flow that is expected in 7 years from today?
6. Quantum Pizza took out a loan from the bank today for 22,000 dollars. The loan requires Quantum Pizza to make a special payment of 11,600 dollars to the bank in 5 years and also make regular, fixed payments of X to the bank each year forever. The interest rate on the loan is 5.9 percent per year and the first regular, fixed annual payment of X will be made to the bank in 1 year. What is X, the amount of the regular, fixed annual payment?
7. Sang has an investment worth 169,570 dollars. The investment will make a special payment of X dollars to Sang in 4 month(s) and the investment also will make regular, fixed monthly payments of 2,360 dollars to Sang forever. The expected return for the investment is 1.41 percent per month and the first regular, fixed monthly payment of 2,360 dollars will be made to Sang in 1 month. What is X, the amount of the special payment that will be made to Sang in 4 month(s)?
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