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Need help! I don't understand how to complete the problems. SPB570 - Financial Aspects of Sport Module 2 Assignment Document how you arrived at your
Need help! I don't understand how to complete the problems.
SPB570 - Financial Aspects of Sport Module 2 Assignment Document how you arrived at your calculations. 1. Saint Leo Athletics has invested $2.5 million in endowment money, for one year at 6%. If the inflation rate is 2.8% what is the real increase in value of the endowment fund? 2. What is the future value of $2.5 million invested at 7%, compounded annually for 10 years? A=P (1+r) n*t A=2,500,000 (1+0.07/1) 1*10 A=2,500,000 *1.0710 A=2,500,000*1.9672 A=4,918,000 3. After some long-range planning, Saint Leo University has decided to build a new recreation facility in five years. They have received estimates that the facility will cost $14.5 million dollars at that time. They have an investment opportunity that will return 8%. How much do they need to invest today to have $14.5 million at that time? 4. Your star player has previously negotiated a payment of $25 million 5 years from now. They would like to receive payment today? What is the present value of that money if it discounted at 3%, 7%, and 0%? 5. You have deposited $10,000 at your local savings and loan and have been offered an annual interest rate of 3% and the option of annual, semi-annual, or quarterly compounding. Which one will you choose and what is the dollar difference between the three options? 6. Your athletic department needs to purchase three passenger vans in three years. They project the cost at that time to be $120,000. Currently you have $98,000 set aside for the vans. What return on your money must you receive to be able to purchase the vans in three years? 7. To entice a new coaching hire, you have promised her that you would deposit $10,000 each year for the next thirty years in a retirement account that will pay 6% interest. How much will be waiting for the coach at the end of thirty years? 8. You have decided to build a new strength and conditioning center. The total cost of the project is $4 million. You have $1.5 million and will be borrowing the balance for ten years at 6% interest. What are your MONTHLY payments? 9. A prominent athletic booster has promised you a $500,000 gift in five years. You were informed by your local bank that they would be willing to give you that $500,000, discounted at 8% today. How much will they give you? 10. Assume that the risk free rate is 6% and the expected return on the market is 13%. What is the required rate of return on a stock that has a beta of 0.7Step by Step Solution
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