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I have some homework question about MSF 503 , my questions are attached on the files, could you please help me to solve this problem?

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I have some homework question about MSF 503 , my questions are attached on the files, could you please help me to solve this problem?

image text in transcribed MSF 503 Assignment #1 1. You are offered an asset costing $600 that has cash flows of $100 at the end of each of the next 10 years. a. If the appropriate discount rate for the asset is 8%, should you purchase it? b. What is the IRR of the asset? 2. You have just taken a car loan of $15,000. The loan is for 48 months at an annual interest rate of 15% (which the bank translates to a monthly rate of 15%/12 = 1.25%). The 48 payments (to be made at the end of each of the next 48 months) are all equal. a. Calculate the monthly payment on the loan. b. In a loan table calculate, for each month: the principal remaining on the loan at the beginning of the month and the split of that month's payment between interest and repayment of principal. c. Show that the principal at the beginning of each month is the present value of the remaining loan payments at the loan interest rate (use either NPV or the PV functions). 3. You are considering buying a car from a local auto dealer. The dealer offers you one of two payment options: You can pay $30,000 cash. The \"deferred payment plan\": you can pay the dealer $5,000 cash today and payment of $1,050 at the end of each of the next 30 months. As an alternative to the dealer financing, you have approached a local bank, which is willing to give you a car loan of $25,000 at the rate of 1.25% per month. a. Assuming that 1.25% is the opportunity cost, calculate the present value of all the payments on the dealer's deferred payment plan. b. What is the effective interest rate being charged by the dealer? Do this calculation by preparing a spreadsheet like this (only part of the spreadsheet is shown-you have to do this calculation for all 30 months): Now calculate the IRR of the difference column; this is the monthly effective interest rate on the deferred payment plan. 4. Use Data|Table to graph the function f(x) = 3 x2 -2x-15, as illustrated below: MSF 503 Assignment #1 5. The spreadsheet fragment below shows a net present value and internal rate of return calculation for a project. Use Data Table to do a sensitivity analysis on the NPV of the project, varying the discount rates from 0%, 3%, 6%,...,21% and varying the growth rates from 0%,3%,...,12%. 6. Write a VBA function for f(x) = x2 3. 7. Suppose a share was priced at price P 0 at time 0, and suppose that at time 1 it will be priced P 1. Then the continuously compounded return is defined as return =ln( P1 ). Implement this function P0 in VBA. There are two ways to do this: You can use Worksheetfunction.Ln or the VBA function Log. 8. An investment company offers a bond linked to the FT100 index. On redemption the bond pays the face value plus the largest of A: the face value times the change in the index. Or B: 5% yearly interest compounded monthly. Thus, for example, 100 invested when the index was 110 and redeemed a year later when the index was 125 will pay A: 100 + 100*(125 110)/110 = 113.636 and not B: 100*(1 + 0.05/12) 12 = 105.116. Implement a VBA function Bond (Deposit, Years, FT0, FT1). (36-6) 9. A bank offers different interest rates on deposit accounts. The rate is based on MSF 503 Assignment #1 the size the periodical deposit (CF) and the following table. (a) Write a future value function BankFV(CF, r, n). of (b) Another bank offers 1% increase in interest rate to savings accounts with a balance of more than 10,000.00. Write a future value function Bank1FV(CF, r, n) that reflects this policy

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