Question
In your answers, you should properly show your work by writing down your entries into the calculator. For instance, if you use the TVM worksheet
In your answers, you should properly show your work by writing down your entries into the calculator. For instance, if you use the TVM worksheet of your financial calculator to compute how long it takes to double your account balance given 5% annual interest rate, you should write down your entries as: I/Y=5, PV=-1, PMT=0, FV=2, CPT N=? --- the question mark here stands for your answer to the question.
Question 1 TVM, Finding I/Y [2 points]: Martell Corporations 2012 sales were $10 million. Sales were $6 million five years earlier. To the nearest percentage point, at what rate have sales grown?
Question 2 PV, Ordinary Annuity [2 points]: Find the present value of the following ordinary annuities:
Question 3 PV, Annuity Due [2 points]: Find the present value of the following annuities due:
Question 4 Uneven Cash Flow [2 points]: Express Airlines is considering the purchase of an aircraft to supplement its current fleet. In estimating the impact of adding this aircraft to the fleet, management has developed the following expected cash flows:
Year Cash Flow
1 - $ 1,000
2 $10,000
3 $10,000
4 $10,000
5 $20,000
6 $20,000
7 - $30,000
If the discount rate is 10 percent, what is the present value of these estimated flows?
Question 5 PV, Lump Sum, Compounding [2 points]: Find the present value of $600 due in five years under each of the following conditions:
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